Trump is not afraid of oil prices? Reports say the United States is not considering releasing strategic oil reserves while OPEC+ is considering increasing production.

The US launches a military strike against Iran, causing tension in the global energy market. Washington remains silent and shows confidence by not using strategic reserves, while OPEC+ may take proactive measures to stabilize the market by increasing production more than expected. According to foreign media reports, a US Energy Department official stated that the US government has "not discussed" using the Strategic Petroleum Reserve (SPR) to address the potential oil price increase caused by the military action. This statement implies that Washington believes the impact of this conflict on oil prices will be manageable. Meanwhile, according to Bloomberg, two representatives of OPEC+ revealed that the organization's meeting scheduled for Sunday will discuss options for significantly increasing production. The biggest uncertainty lies in the Strait of Hormuz. According to Xinhua News Agency, Iranian media reported on Saturday that the Islamic Revolutionary Guard Corps has warned that some ships passing through the strait are unsafe, and the strait has been "effectively" closed. This narrow waterway carries about 20% of global oil supply, and if closed, any reserves released would be difficult to make up for the shortfall. Strategic reserves: Instruments in hand, waiting for the right time The US Strategic Petroleum Reserve currently holds approximately 415 million barrels. Historically, the SPR has been used multiple times to stabilize oil prices during crises after the outbreak of the Russia-Ukraine war in 2022, the US released reserves on a large scale. However, this time, an Energy Department official made it clear that there have been no discussions on the issue. Kevin Book, director of research at the Washington think tank ClearView Energy Partners, pointed out that while the SPR still has ample supply in emergencies, "when it comes to strategic reserves, duration and scale are important. The impact of a full-scale Hormuz crisis may exceed the cushion provided by the strategic reserves of the US and other members of the International Energy Agency. The limitations of the SPR are in addressing short-term shocks but may be less effective in prolonged or larger crises. This also explains why analysts are focusing more on the actions of OPEC+. Emergency OPEC+ meeting: Production increase beyond expectations Bloomberg reported that OPEC+ was originally scheduled to approve an increase of 137,000 barrels per day for April maintaining the pace of growth seen in the fourth quarter of last year. However, the situation changed dramatically after the military conflict. An informed source revealed that member countries may approve a production increase plan three to four times the above-mentioned scale. Saudi Arabia has reportedly accelerated crude oil exports in recent times in preparation for possible emergency supplies. During last year's US airstrikes on Iranian nuclear facilities, Saudi Arabia also temporarily increased supply. However, there are substantial constraints on production increases. According to data from the International Energy Agency, Saudi Arabia has the largest surplus production capacity in the world, allowing for an additional increase of approximately 1.8 million barrels per day; the United Arab Emirates is reportedly planning for emergencies with a capacity to deploy at least 1 million barrels per day in increments. Helima Croft, Head of Commodity Market Strategy at RBC Capital Markets, warned that "no matter how large the scale of the production increase announced by OPEC+, they may need to use inventory to fulfill their commitments, as the remaining production capacity is extremely limited and almost entirely concentrated in Saudi Arabia." In addition, Jeff Currie, Chief Energy Strategist at Carlyle Group, pointed out that there is a misconception in the market's expectation of oversupply. He stated, "The market's pricing is based on an assumption of 'oversupply,' which is proving to be mostly fictitious. With no room for error, this means there is a significant upside potential." Hormuz: Central variable of systemic risk The greatest threat to the energy market from this conflict comes from the Strait of Hormuz. According to Xinhua News Agency, the Iranian Revolutionary Guards have issued warnings about the safety of passage, and Iranian media has said the strait has been "effectively" closed. MarineTraffic data on ship transponders shows a decline in the passage of large commercial vessels, especially those heading west into the Gulf. At the same time, Yemen's Houthi rebels an armed organization closely associated with Iran have announced a resumption of attacks on ships in the Red Sea, further exacerbating the risks of energy transportation in the region. According to Iran's semi-official Mehr news agency, there was an explosion at the important oil export hub of Kharg Island in Iran, but details were not provided. Analysts: Difficulty in achieving a $100 oil price Despite rising market tensions, most analysts believe the probability of oil prices exceeding $100 remains relatively low. Michael Alfaro, Chief Investment Officer of Gallo Partners hedge fund, stated that oil prices will see a brief surge, "but will not exceed $100, because OPEC+ may announce emergency production increases." Kevin Book also pointed out that this conflict may prompt the eight OPEC+ countries that were planning for production increases to increase the scale of production further at the meeting on Sunday, "Today's hostile actions may trigger a larger scale of supply increase." Currently, negotiation channels have not been completely closed off. Just two days before the military action, Iran and the US had just completed the third round of nuclear talks in Switzerland. However, Trump expressed dissatisfaction with the progress of the negotiations on Friday, while Iran claimed to have retaliated against US military bases in the UAE, Bahrain, Qatar, and Kuwait. The outcome of the conflict remains highly uncertain and will be a key variable affecting market trends. This article is translated from "Wall Street View" by author Xu Chao; GMTEight editor: Liu Jiayin.