WASHINGTON (Pakistan Point News / Sputnik - 07th October, 2021) The United States is considering banning crude exports and drawing down reserves from its national stockpile to deal with an undersupplied and overpriced oil market, Energy Secretary Jennifer Granholm was quoted as saying by the Financial Times on Wednesday.
"That's a tool that we have not used, but it is a tool as well," Granholm said at the FT Energy Transition Strategies Summit on Wednesday when asked if Washington would consider reintroducing an embargo on US crude exports which were banned previously for four decades until 2015.
Exports of US crude oil have been unfettered since Congress lifted Federal shipment restrictions in 2015, with the country sending out anywhere between 2.0 million and 3.0 million barrels per day to China and other locations.
Granholm also raised the prospect of releasing crude from the government's Strategic Petroleum Reserve, declaring that "all tools are on the table" as the Biden administration confronts a politically perilous surge in the price of gasoline, the Times reported.
"It's a tool that's under consideration," Granholm said of the planned supply from the so-called SPR, which energy industry experts have said could help calm oil markets and bring prices down.
The SPR, located near the US 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 from the reverse was in 2011, when the Obama administration worked with other International Energy Agency members to tap emergency stocks to bring down soaring prices then. The US Congress has also authorized periodic sales from the SPR to raise government revenue.
The average price of petrol at US pumps is hovering at $3.19 a gallon - the highest in seven years - with the White House fearing that the rise in fuel costs could damage the administration's political prospects ahead of the midterm elections next year.
Global crude prices themselves are up about 60% this year, with US crude fetching about $77 a barrel and global benchmark Brent about $81.
This week, crude prices initially jumped another 5% after oil producers in the OPEC+ cartel ignored White House pleas to increase output more quickly than planned by the group. OPEC+ said it will stick with plans to release an additional 400,000 barrels a day onto the market from November through April, as part of a gradual unwinding of historic supply cuts in place since the COVID-19 outbreak last year.
Both US crude and Brent, however, fell about 2% in Wednesday's trading, with declines accelerating after the headlines on Granholm's response to the crisis.
