U.S. Energy Secretary Jennifer Granholm highlighted the possibility of releasing crude oil from the government’s strategic petroleum reserves and announced that “all equipment is on the table” because the Biden administration is facing a politically dangerous geopolitical price of gasoline.
The average price of gasoline at the pump is .. 3.119 per gallon – the highest in seven years – and the White House fears that rising fuel costs could hurt its political prospects before next year’s midterm elections.
“This is a tool under consideration, which analysts say could calm the oil market and bring down prices.
Granholm also did not deny a ban on crude oil exports. “It’s a tool we haven’t used, but it’s also a tool,” he told the FT Energy Transition Strategy Summit on Wednesday.
The Strategic Petroleum Reserve, located near the Gulf of Mexico, is the world’s largest emergency stockpile of crude oil. Operated by the U.S. Department of Energy, reserves last week stood at 171.8.m million barrels of oil – about a month’s worth of U.S. petroleum product demand.
The last major release was in 2011, when the Obama administration worked with members of other international energy companies to raise prices by tapping emergency stocks. Congress has also approved phased sales to increase government revenue.
US crude oil exports have been unfettered since Congress lifted federal restrictions in 2015.
On Wednesday afternoon, the price of US crude stood at about. 77.60 a barrel, the highest level since 2014. It has risen in line with the prices of other commodities, raising fears that fuel inflation could hamper the post-epidemic global economic recovery.
On Monday, oil producers OPEC + Group ignored a request from the U.S. government to increase production faster than the group’s plans. Instead, it stuck with plans to release an additional 400,000 barrels to the market in November, part of a gradually uncertain increase in last year’s historic supply reduction.
The OPEC + decision was a push for the White House, which wanted rapid growth. Biden’s national security adviser, Jack Sullivan, recently raised the issue during an OPEC lynching pin visit to Saudi Arabia.
“SPR [releases] After Riyadh rejected Jack Sullivan, a nanosecond came on the table and the administration realized that shell producers could not increase production fast enough. Home.
Granholm said the United States was disappointed and “everyone was hoping that additional supplies would be provided so that prices would not rise”.
He added that the United States was doing “what it can” to counter the harsh natural gas supplies that have skyrocketed in Europe and Asia, including allegations of “market manipulation” by Russia.
In the UK, record gas prices rose in the bond market this week as traders hurt the British economy from rising fuel prices.
In Asia, the price of liquefied natural gas cargoes on the spot market on Wednesday sent more than 50 per million to British thermal units due to a bidding war with European buyers, the all-time high and dramatic contrast to the record low in May last year.