Femi Ashekun/
The US government is considering the possibilty of releasing crude oil from its strategic petroleum reserve to curtail the surge in the pump price of petrol, which currently hovers at $3.19 per gallon (a little under $1 per litre).
According to Financial Times, the US energy secretary, Jennifer Granholm, declared today that “all tools are on the table,” including a potential ban on crude oil exports.
The Biden administration reportedly fears that the rise in fuel costs could damage its political prospects ahead of the midterm elections next year.
“It’s a tool that’s under consideration,” Granholm said of a release of crude supplies from the national strategic petroleum reserve, which analysts say could calm oil markets and bring prices down.
Granholm while speaking at the FT Energy Transition Strategies Summit today also said a ban on crude oil exports is “a tool that we have not used, but it is a tool as well”.
The strategic petroleum reserve, located near the Gulf of Mexico, is the world’s largest emergency stockpile of crude oil. Managed by the US Department of Energy, the reserve contained 617.8m barrels of oil last week — equal to about a month of US petroleum products demand.
The last big release was in 2011, when the Obama administration worked with other International Energy Agency members to tap emergency stocks to bring down soaring prices. Congress has also authorised periodic sales to raise government revenue.
The price of US crude stood at about $77.60 a barrel this afternoon, hovering at its highest level since 2014.
On Monday, the Opec+ group of oil producers ignored pleas from the US government to increase output more quickly than the group had already planned. Instead, it stuck with plans to release an additional 400,000 barrels a day on to the market in November, part of a gradual unwinding of last year’s historic supply cuts.
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