U-Turn: Trump Administration Abandons Crude Oil Futures Intervention Plan

TradingKey - On March 6, Bloomberg reported that the Trump administration had discussed authorizing the Treasury Department to enter the market to trade crude oil futures, but latest reports indicate that the proposal has now been shelved.

Previously, crude oil prices surged dramatically. Brent crude recorded a 17% weekly gain, marking its largest weekly increase since 2022. At one point on March 5 ET, WTI crude oil futures rose above $82, an intraday gain of approximately 10%.

Analysts believe that the proposal for the Treasury to directly participate in crude oil futures trading to curb price spikes may have limited actual impact. Amid current geopolitical conflicts, the surge in intraday trading volume for crude oil futures would significantly dilute the effectiveness of such intervention.

Meanwhile, the Trump administration's backup option—curbing rising oil prices by releasing the Strategic Petroleum Reserve (SPR)—is also facing hurdles. Large-scale withdrawals during the Biden administration to address energy price volatility triggered by the Russia-Ukraine conflict have reduced inventories to approximately 60% of design capacity. This, combined with equipment wear and deferred maintenance backlogs from frequent use, increases the operational complexity of further reserve releases.

During Friday's Asian trading session, international oil prices retreated slightly, with WTI crude falling 0.4% and Brent crude dropping 0.18% intraday.

According to Bloomberg, the White House is still weighing alternative options, including providing insurance guarantees for tankers transiting the Strait of Hormuz, organizing naval escorts, and temporary waivers for fuel-blending requirements.