Stopgap measures won't solve global oil crisis amid war in Iran

Global leaders have been scrambling to contain the rising cost of oil and gasoline since the start of the Iran war, which took a record amount of oil off the market when tankers full of crude were stranded in the Persian Gulf and military strikes damaged refineries, pipelines and export terminals.

- BY CATHY BUSSEWITZ

THE PRICES for a gallon of fuel are displayed at a Chevron gas station in downtown Los Angeles on Tuesday.

(JAE C. HONG Associated Press)

Hoping to ease some pain for consumers, President Trump and other heads of state have been pulling on various levers, launching more oil on the market in a bid to calm the chaos.

A group of 32 nations that are members of the International Energy Agency began releasing the largest volume of emergency oil reserves in its history: 400 million barrels. Trump is tapping into oil from the Strategic Petroleum Reserve while lifting sanctions on Russian and Iranian crude and temporarily waiving the Jones Act, a maritime law that requires ships carrying goods between U.S. ports to be U.S.-flagged.

But despite those maneuvers, crude oil surpassed $100 a barrel and gasoline is selling for $4.06 a gallon on average in the U.S. While the stopgaps are helping, they’re not adding up to enough oil to replace what’s stranded, experts say.

"They're all incremental,” said Mark Barteau, professor of chemical engineering and chemistry at Texas A & M University. “You're talking about these different patches being at the level of maybe 1 [million] to 2 million barrels a day each, and you've got to get to 20, so it's hard to see those actually adding up to the numbers that are needed. And then the question is, how long can you sustain those?”

Trapped oil inside the Persian Gulf

Before the war began, roughly 15 million barrels of crude oil and 5 million barrels of oil products passed daily through the Strait of Hormuz, the narrow mouth of the Persian Gulf, amounting to about 20% of global oil consumption, according to the International Energy Agency.