How the limitations set by last year's Big Beautiful Bill Act have reduced Trump's ability to respond to rising oil prices now

Trump Administration Faces Hurdles in Rebuilding Oil Reserves

When President Trump and fellow Republicans took office last year, they criticized former President Joe Biden’s management of the nation’s emergency oil reserves and vowed to take a new direction.

In his second inaugural speech, Trump promised to fully restore the Strategic Petroleum Reserve (SPR), which inspired the early version of the GOP’s Big Beautiful Bill Act. This legislation initially set aside over $1 billion to restock the SPR.

However, by the time the bill was finalized, that funding had been slashed by more than 80% to reduce overall costs. Meanwhile, required withdrawals from the reserve continued, further lowering available supplies.

These developments have slowed the administration’s efforts to quickly rebuild the SPR, leaving Trump with fewer tools to address surging oil prices as US and Israeli military actions against Iran disrupt global markets.

According to government statistics, the SPR held about 413 million barrels as of December. For comparison, the reserve contained over 600 million barrels under Biden before the Russia-Ukraine conflict triggered major releases.

Despite the recent spike in oil prices, Trump has downplayed the likelihood of tapping the reserves, telling reporters on Saturday, “We’ve got a lot of oil.” He indicated his priority is to add to the reserves “when the timing is right.”

Still, with oil prices briefly exceeding $110 a barrel before easing, many expect that further releases from the reserve may become necessary.

Claudio Galimberti, chief economist at Rystad Energy, stated that if the Strait of Hormuz remains closed for several more months, oil could reach $135 per barrel. “We are now in the midst of one of the most significant energy crises I’ve witnessed,” Galimberti remarked.

On Monday, G7 economic ministers met to discuss a coordinated release of emergency oil reserves, but the talks ended with France indicating the group was not ready to act.

With both Brent crude (BZ=F) and West Texas Intermediate (CL=F) up over 40% in the past month, pressure to release reserves is expected to persist.

Decades of Declining Oil Reserves

The Strategic Petroleum Reserve, created after the 1973–1974 Arab oil embargo, reached its peak in 2010, storing over 726 million barrels in underground caverns managed by the Department of Energy in Texas and Louisiana.

Afterward, reserve levels began to fall, dropping below 600 million barrels by late 2021 as tensions between Russia and Ukraine escalated. Following Russia’s invasion, Biden authorized significant withdrawals, reducing the SPR to a 40-year low of about 347 million barrels by June 2023.

Since then, the reserve has slowly recovered, with modest increases during the remainder of Biden’s presidency and into Trump’s current term. However, the pace of replenishment remains insufficient to restore the SPR quickly.

Political disagreements have complicated efforts to rebuild the reserve. Republicans criticized Biden for drawing down the SPR but have only supported limited funding to restore it.

Over the weekend, Trump accused Biden of using the reserves for political gain and wrote on social media that higher oil prices are “a very small price to pay” for the broader objectives of the conflict in Iran.

President Trump speaks to reporters on Air Force One while heading to Miami on March 7. (Roberto Schmidt/Getty Images)

Congressional Setbacks and Legislative Challenges

After Trump’s second inauguration, where he pledged to refill the reserves and restore national prosperity, the SPR became a focal point in congressional negotiations over a major budget package.

Senator Markwayne Mullin of Oklahoma, who participated in those discussions, announced that the final bill, passed with only Republican support, allocated $389 million for the reserve—$171 million for oil purchases and $218 million for maintenance. He described this as a step toward rebuilding the supply, though earlier drafts of the bill had proposed much higher funding.

The original proposal included $1.3 billion for crude oil purchases, but Republicans reduced this amount to cut costs in the final legislation.

The Department of Energy continues efforts to restock the reserve, but progress remains slow and is unlikely to restore full capacity before the end of Trump’s term.

The Strategic Petroleum Reserve storage facility at the Bryan Mound site is seen in October 2022 in Freeport, Texas. (Brandon Bell/Getty Images)

The Big Beautiful Bill Act did cancel some scheduled SPR sales, which helped stabilize reserve levels, but left other mandated sales in place.

Energy Secretary Chris Wright, who oversees the SPR, has also played down the likelihood of using the reserve during the current crisis. In interviews on Sunday, Wright told CNN that elevated oil prices are likely to be a short-term problem, saying, “Worst case, that’s a few weeks. That’s not months.”

On CBS, Wright said the US would be “more than happy” to use the reserve if needed, but noted that doing so would not resolve the “logistics issue” of crude shortages for refineries in Europe and Asia.

Meanwhile, Democrats are urging immediate action. Senate Minority Leader Chuck Schumer has called for tapping the reserve, arguing that it exists for situations just like this.

Ben Werschkul reports from Washington for Yahoo Finance.