The US is looking into releasing emergency oil reserves in order to address gas prices at seven-year highs in the country, the energy secretary said on Wednesday.
“It’s a tool that’s under consideration,” Jennifer Granholm said at a Financial Times energy summit on the possibility of President Joe Biden opening up the US Strategic Petroleum Reserve.
With Americans increasingly hitting the road for work and travel as nationwide coronavirus cases are on the decline, US gasoline prices are currently averaging around $3.20 a gallon.
At a Monday meeting this week, Opec+ oil producing countries decided to continue their planned market output of an additional 400,000 barrels per day for November, neglecting to meet Biden administration requests to increase output. Oil prices are up 60 per cent since the start of the year.
Brent, the international benchmark which more than half of the world's oil trades under, was trading above $80 a barrel at 12pm UAE time on Thursday. West Texas Intermediate, which tracks US crude, was trading above $76 a barrel.
"Everybody was hoping that there would be additional supply made available so that prices would not be jacked up," Ms Granholm said.
Oil prices increased after the Opec+ announcement and closed at the highest since 2014, fuelling concerns over limited energy supplies as the northern hemisphere heads into the winter months.
"All tools are on the table," Ms Granholm added.
She also did not rule out enacting a crude oil export ban, the Financial Times reported.
“The consideration of tapping reserves in the US is likely to signal that we are not going to see oil prices get out of hand,” Ed Moya, senior market analyst at Oanda Corporation, told Bloomberg News.
The US Strategic Petroleum Reserve is the world's largest supply of emergency crude oil with caverns located in the Gulf of Mexico. A July 2021 document from the US Energy Department says it currently holds 622 million barrels of crude oil.
The last time a US president tapped into the reserve was under Barack Obama, who sold over 30 million barrels to address supply issues during the height of the Libyan conflict in 2011.
Last month, the world's second largest economy after the US and biggest importer of crude, sold oil from its strategic reserves for the first time on September 24 in a bid to lower prices.