Senate Majority Leader Chuck Schumer has called on President Biden to release oil from the strategic petroleum reserve in order to bring retail fuel prices down ahead of the holidays.
"We're here today because we need immediate relief at the gas pump and the place to look is the Strategic Petroleum Reserve," Schumer told media, as quoted by Reuters.
Several experts have weighed in on the idea of releasing crude from the SPR with their opinion unanimous that it won't help bring prices at the pump down in any consistent way.
For one thing, an emergency release from the SRP would do nothing for the regular supply of oil in the country, which depends on local production and imports. For another, the type of oil stored in the SPR is not one favored by refiners, so even if a few million barrels are released, they may not necessarily lead to an increase in the production of fuels.
Schumer's call comes after a group of Democratic Senators wrote a letter to President Biden urging him to ban exports of crude as a way of reducing prices at the pump.
"In light of these pressing concerns, we ask that you consider all tools available at your disposal to lower US gasoline prices. This includes a release from the Strategic Petroleum Reserve and a ban on crude oil exports," the legislators, led by Sen. Elizabeth Warren, Sen. Sherrod Brown, and Sen. Jack Reed, among others, said in the letter.
"As the United States work[s] to boost the development of clean and renewable energy over the long-term, we must ensure that Americans are able to afford to fill up their cars at the pump in the meantime," the authors of the letter also wrote.
This prompted an immediate response from the oil and gas industry.
"That proposal does absolutely nothing to alleviate higher prices or to make prices lower than in any sort of relative sense," petroleum economist Karr Ingham from the Texas Alliance of Energy Producers and creator of the Texas Petroleum Index told Fox News last week.
By Charles Kennedy for Oilprice.com
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Comments
Even banning exports of US crude oil estimated at 3.0 million barrels a day (mbd) will have no impact on gasoline prices inside the US. Moreover, the United States will continue to import heavier crudes for its refineries.
All in all the United States has no alternative but to let the market determine the level of gasoline prices. After all, the rise in US gasoline prices is the result of rising oil demand in both the world and also the United States.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London