If you really want to reduce oil prices, the United States has "almost only one way": the Strait of Hormuz.

As the US military action in Iran caused oil prices to soar, the policy toolbox is nearly empty. Experts warn that if the Strait of Hormuz cannot be reopened quickly, all other measures implemented by Washington will be futile. This week, the Trump administration announced measures to provide insurance and escort for oil tankers passing through, temporarily relax sanctions on Russian oil, and discussed options to boost Venezuela's oil production. However, the consensus among most experts is that only by swiftly restoring the passage through the Strait of Hormuz can the trend in oil prices be fundamentally reversed. Brent crude closed this week at $93 per barrel, with a 28% increase in a single week, reaching a new high since 2023; the US benchmark West Texas Intermediate crude oil surged 36% to $91 per barrel, marking the largest weekly increase since 1983. According to a report by the Wall Street Journal, Goldman Sachs warned that if there is no sign of resolution before the end of this week, oil prices could surpass $100 per barrel next week; if the situation of blocked passage through the strait continues throughout March, prices could exceed the historical peak values of 2008 and 2022 ($147). The strait is the core issue, other options have limited marginal impact Mike Sommers, the CEO of the American Petroleum Institute, said, "The real focus must be on opening the Strait of Hormuz, because all the other measures, even if used in combination, cannot provide the stability that the world economy needs." He added, "The impact of other options on prices is only marginal." The Strait of Hormuz is a crucial passage for about one-fifth of the world's oil supply. Currently, traffic through the strait has sharply decreased, with less than 50 ships passing through in the past week, while about 500 oil and gas tankers remain stranded in the surrounding waters. Ship owners have stated that they will not send ships through the strait until they have received security assurances. Escorting, easing sanctions, increasing production: Multiple measures may not solve the pressing issue The Trump administration has implemented multiple emergency measures this week. On the insurance front, a development finance company announced a $20 billion reinsurance scheme for oil tankers passing through; however, insurance industry experts have questioned whether the institution can provide effective coverage sufficient to rebuild ship owners' confidence. On the supply side, the US Treasury Department temporarily relaxed sanctions on Russian oil exports to India on Thursday, hinting at a possible expansion of the exemptions. Treasury Secretary Benson stated, "We may lift sanctions on more Russian oil, a large amount of sanctioned oil is floating at sea. In essence, by lifting sanctions, the Treasury Department can create supply." Additionally, officials mentioned the possibility of increasing Venezuelan oil production. After the Maduro regime was overthrown in January, the US has taken over local production operations. However, the market remains skeptical about whether these measures can create effective supply in time. Strategic oil reserves are in crisis, policy buffers significantly narrowed Washington's ability to respond to this crisis is also limited by the severe depletion of the Strategic Petroleum Reserve (SPR). In 2022, then-President Biden mobilized the reserves on a large scale to suppress oil price increases caused by the Russia-Ukraine conflict, resulting in a substantial decrease in stocks. Trump had promised to replenish the reserves after taking office, but did not fulfill the promise when oil prices were low last year. Kevin Hassett, the Director of the National Economic Council, said on Friday that utilizing the Strategic Petroleum Reserve is not currently under consideration. Congressman August Pfluger, a Republican representative from western Texas, criticized the depletion of reserves, stating that it has left the US "in an extremely vulnerable position." He told the Financial Times, "I have been warning for years that using strategic reserves for short-term political purposes weakens long-term energy security. Now, at a time when this emergency buffer is truly needed, the reserves are far below the levels they should be. This is a serious national security issue." Market pressure has reached a critical point, and the credibility of policies is being questioned Some experts have criticized the Trump administration's handling of the crisis. Michael Alfaro, Chief Investment Officer of Gallo Partners, a hedge fund for energy and industry, said, "Many policy decisions made or leaked by the government in the past 48 hours show a hasty attempt to appease the oil market." He warned that if there is no signal of the imminent reopening of the Strait of Hormuz by Monday, commodity prices will see a new round of soaring. However, some have defended the White House's strategy. Dan Brouillette, who served as Energy Secretary during Trump's first term, told the Financial Times that the government has a longer-term perspective than the financial markets. "High oil prices are only temporary. Now is the time to remove this regime and completely end its decades-long extortion through the strait." This article is from Wall Street news, edited by GMTEight: Li Fo.