Trump to Invoke Emergency Law for Offshore Oil Company Sable To Tamp Down Oil Prices

President Donald Trump is preparing to invoke Cold War-era powers to pave the way for renewed oil production off the southern California coast, a long-shot bid to help ease the global crude supply crunch spurred by his war with Iran.

Trump is set to soon summon authorities under the Defense Production Act to preempt state laws and ease permitting for Sable Offshore Corp., a Houston-based company looking to restart significant production from a cluster of offshore platforms in California. The plan was described by a persorn familiar with the matter who asked not to be named because it’s not yet public.

The planned order comes as Trump faces heavy political pressure to tackle rising fuel prices ahead of the November midterm elections, which will be decided in large part by Americans’ attitudes toward the cost of living.

Atlantic Council senior fellow Ellen Wald discusses with hosts Carol Massar and Tim Stenovec. - The Iran war is causing unprecedented turmoil in oil markets, hitting 7.5% of global supply and an even bigger swath of exports, the International Energy Agency said.

“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” the IEA said in its monthly report on Thursday. The previous day, its members agreed to release an unprecedented 400 million barrels from emergency reserves to counteract the chaos. The most immediate impact of the war on energy markets is the closure of the Strait of Hormuz, choking off oil and gas flows through the trade artery. With Gulf producer giants forced to cut output because they can’t export from the region, the conflict is eroding a global oil supply glut. It also means the effects will be felt well beyond when the waterway is reopened.

The IEA estimates that the war will slash global oil supply by 8 million barrels a day this month, or almost 250 million barrels in total. Flows through the strait, through which 20 million barrels of crude and products passed last year, are down by more than 90%, the IEA estimates.

READ: Gulf Oil Giants Deepen Cuts as Hormuz Halt Chokes Exports

The resulting price surge, flight cancellations and economic uncertainty are also taking a toll on demand, the agency said, cutting its estimates for global consumption growth this year by roughly 25% to 640,000 barrels a day. That’s the lowest since it introduced forecasts for 2026 last April.

Brent crude climbed back above $100 a barrel in London on Thursday as two crude tankers were hit in Iraqi waters and Oman’s evacuated its key oil export terminal. There have been ongoing attacks on commercial shipping in the region since the war began. Rivals Boost

While Saudi Arabia and the United Arab Emirates can divert some of their barrels on alternative routes, the effective closure of the strait has forced producers around the Gulf to collectively shutter roughly 10 millions of daily production, according to the agency.

The supply shock has pared the IEA’s projections for a global surplus in 2026 by just over a third to about 2.4 million barrels a day.

Before the crisis, the IEA projected a record oil glut for this year as swelling supply from across the Americas — driven the US, Canada, Guyana and Brazil — exceeded growth in consumption.

Output losses in the Middle East are being tempered by higher output from producers outside of the Organization of the Petroleum Exporting Countries and its partners, as well as increases by OPEC+ members Kazakhstan and Russia, the IEA said.

The effective closure of Hormuz also jeopardizes about 4 million barrels a day of regional refining capacity, the agency said. Constraints on the availability of feedstock limits the ability of other regions to offset the squeeze, posing particular risks for supplies of diesel and jet fuel.

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