Trump TACO again: it only took two hours to go from firm opposition to a crazy reserve release!

Amid the tense global focus on the Strait of Hormuz and the “oil tanker ban,” Washington staged a shocking spectacle for its allies. In just two hours, the U.S. government’s energy policy did a 180-degree turn, shifting from a stance of “too early to intervene” to becoming the behind-the-scenes driver of the world’s largest-ever release of oil reserves.

Is this a carefully calculated move or a frantic response to the aftermath of war?

1. “Too early” remarks, then a sudden U-turn at the White House

● On the morning of March 11, local time, at the G7 Energy Ministers’ Meeting, U.S. Energy Secretary Chris Wight conveyed the White House’s clear stance: since oil prices had fallen below $90 per barrel, discussing large-scale market intervention was “too early.” This statement aligns with the typical approach of the Trump administration—avoiding strategic moves unless absolutely necessary.

● However, less than two hours later, the atmosphere changed dramatically. U.S. representatives suddenly shifted gears, actively lobbying and even pressuring allies to immediately proceed with an unprecedented release of oil reserves. According to insiders, European officials were “shocked” by this sudden change, but to avoid triggering greater market turmoil during a sensitive time, they ultimately went along with the U.S. pace.

● This hurried coordination even broke the usual 48-hour review period that the International Energy Agency (IEA) grants its members. 32 member countries quickly reached an agreement to jointly release 400 million barrels of strategic oil reserves. This figure more than doubles the previous record of 182 million barrels released after the Russia-Ukraine conflict in 2022.

● What caused Trump to change his mind in just two hours? The answer points directly to the painful impact of the ongoing war.

2. The “recoil” of war: the Strait of Hormuz choking the U.S.

● The immediate trigger for this policy U-turn was the massive economic backlash caused by what appeared to be a tough military action. Since late February, after the U.S. and Israel launched airstrikes against Iran, the situation rapidly escalated. In retaliation, Iran effectively took control of the Strait of Hormuz, explicitly banning oil tankers from the U.S., Israel, and their allies from passing through.

● This narrow waterway is a vital “throat” for about one-fifth of global oil trade. Once blocked, the consequences far exceeded White House expectations. Data shows that since the conflict began, oil exports through the strait plummeted to less than a quarter of normal levels, with global daily oil supply losses potentially reaching 15 million barrels.

● Without crude oil “in the pot,” gasoline prices in the U.S. surged. As of March 11, the national average for regular gasoline hit $3.578 per gallon, the highest in over 20 months, a 20% increase since late February.

● For Trump, who has long regarded low oil prices and economic well-being as political achievements, the rising numbers at the pump are far more damaging than battlefield gains or losses. A senior White House official revealed that it was Trump himself, persuaded by advisors, who realized the need to suppress oil price volatility at all costs, leading him to personally order this “total assault” on the energy market.

3. The “big gamble” of releasing 400 million barrels: a gamble with resources and reputation

This release plan resembles a desperate gamble.

● As the “big brother” of the IEA, the U.S. shoulders the largest share—over 100 million barrels. But this means the U.S. strategic reserves will fall below half, reaching the lowest point since at least 2008. This contradicts Trump’s earlier promise to “fill reserves to the top” during his inauguration and exposes a serious misjudgment of the energy market impact before the war.

● Other member countries reluctantly followed suit, but their attitudes are nuanced. Japan announced it would release reserves equivalent to 15 days of domestic consumption and a month’s worth of national reserves; the Netherlands contributed about 5.36 million barrels, roughly 20% of its reserves; Germany and other European powers participated but remained skeptical, believing that with the Strait still blocked, large-scale intervention might not be effective.

● Interestingly, market reactions defied expectations. Normally, such a massive release of oil should cause prices to fall. Instead, the announcement was met with a sharp rally: international oil prices rose over 5%, with U.S. crude returning above $88, and Brent surpassing $93.

4. Why the market isn’t convinced? Because 400 million barrels “aren’t enough to make a difference”

● While 400 million barrels sounds huge, in terms of time, it only covers about 20 days of normal transit through the Strait of Hormuz. Currently, due to forced production cuts and exhausted storage capacity, actual daily supply losses are staggering.

● Bison Interests’ chief investment officer noted that over the past ten days, global oil supply may have already lost about 175 million barrels. The reserves released by the IEA “are only enough to sustain a little over three weeks of war,” which, while better than doing nothing, cannot fill the supply gap for weeks or longer.

● More critically, there’s a psychological game at play. Michael Lynch, president of Strategic Economics and Energy Research, said that while using strategic reserves can prevent panic in the short term, it also sends a dangerous signal to the market: officials believe supply disruptions will last a long time and see no better solution. If reserves are exhausted and conflict continues, markets could surge even more wildly.

● Meanwhile, Iran’s stance has hardened. Its armed forces spokesperson announced that the previous “tit-for-tat” retaliation is over, and they will now implement “chain strikes.” This suggests that the war will not be quickly resolved, and oil tankers may not return to the strait anytime soon.

5. Trump’s worries and the harsh reality

● This two-hour policy reversal is essentially a clumsy lesson for the Trump administration in war economics.

● Previously, Trump boasted that there were “hardly any targets left” in Iran to strike, implying the military phase was ending. But the reality is, the energy crisis triggered by the war has just begun. Every cent increase in gasoline prices fuels public dissatisfaction. To soothe domestic unrest, Trump had to break his campaign promise and, with reserves nearly depleted, reluctantly authorize a “slight” release.

● Yet, market reactions have been brutally clear: in the face of real supply disruptions, government reserves are limited, and the uncontrollability of war is infinite. If the blockade of the Strait of Hormuz lasts for weeks, even the IEA’s efforts may not prevent oil prices from soaring past $120 or even $150.

● For Trump, what’s more worrying than battlefield wins or losses are the rising numbers at the pump and the potential economic recession and political upheaval they could trigger. Whether this 180-degree policy shift is a masterstroke or a panic-driven mistake will soon be revealed by time.