Full Breakdown
Trump Faces Limited Levers as Oil Prices Hover Near $100
7/25/2026, 11:27:20 AM
Trump’s Limited Levers Amid Rising Oil Prices
President Donald Trump is confronting a narrow set of policy options after oil prices again approached the $100-per-barrel “psychological” threshold. Analysts note that the United States has exhausted most emergency measures, including a gas-tax holiday and a waiver of the Jones Act, and that further action would require either a military escalation in the Red Sea and Strait of Hormuz or a concession that allows Iran to control tolls in the Hormuz corridor.
Background: Market Pressures and Regional Conflict
The price surge followed Houthi attacks on two Saudi tankers in the Bab el-Mandeb strait, prompting fears of a de-facto closure of both that passage and the Strait of Hormuz. Dan Pickering, founder of Pickering Energy Partners, warned that simultaneous disruptions could push oil back toward the late-April high of $124 per barrel, while U.S. gasoline averages have risen above $4.10 per gallon. Iran, according to analysts, appears intent to maintain leverage by refusing to reopen Hormuz without a favorable deal.
Data & Statistics: Strategic Petroleum Reserve and Price Signals
The Strategic Petroleum Reserve (SPR) fell from its 2009 peak of more than 726 million barrels to roughly 311 million barrels—its lowest level since early 1983. Trump authorized a release of up to 172 million barrels, which would bring the SPR near the operational minimum of about 250 million barrels, a point where extraction from underground salt caverns becomes technically challenging. Pickering emphasized that the market is now concerned with “tens of millions of barrels” rather than “hundreds of millions.”
Official Statements & Responses
The U.S. Department of Energy asserted that cavern mechanics could technically allow the SPR to be drawn down to as low as 70 million barrels, though experts note that operating below 250 million barrels would markedly increase extraction difficulty. Trump’s administration has already implemented the Jones Act waiver and other measures from the first phase of the response, leaving few additional demand levers.
Verbatim Quotes
- “You either ‘TACO’ or you turn up the heat—and things get worse before they get better,” — Dan Pickering, founder
- “Most of these things have already been put in place in round one,” — Dan Pickering, founder
- “If we wind up with a de-facto closure of the strait and this Houthi threat shuts down the Red Sea, then I think it gets bad pretty fast during August,” — Dan Pickering, founder
- “It’s unlikely Iran is going to open the strait—at least for now, under current conditions—unless the U.S. agrees to let [Iran] control it and toll it,” — Andy Laperriere, head of U
- “We’re no longer talking about hundreds of millions of barrels; we’re talking about tens of millions of barrels,” — Dan Pickering, founder
