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Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

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Oil Prices Fall Further On Possible Emergency Reserve Release And Export Ban

  • A release of crude oil from the U.S. emergency reserve is one option the Department of Energy is considering in a bid to tame prices at the gas pump.
  • Another, more radical option is a ban on U.S. crude oil exports
  • U.S. prices at the pump are at seven-year highs thanks to a strong rebound in demand coinciding with higher international oil prices

A release of crude oil from the U.S. emergency reserve is one option the Department of Energy is considering in a bid to tame prices at the gas pump. Another is a ban on oil exports, Energy Secretary Jennifer Granholm said, as quoted by the Financial Times.

Granholm called the emergency reserve release and the export ban tools, saying “all tools are on the table” as the administration tries to bring gasoline prices under control.

U.S. prices at the pump are at seven-year highs thanks to a strong rebound in demand coinciding with higher international oil prices, according to the AAA, which earlier this month reported that the U.S. average stood at $3.20 per gallon, which was $1.02 more than the average this time last year.

“Global economic uncertainty and supply chain concerns caused by the lingering COVID-19 pandemic could be playing a role in keeping crude oil prices elevated,” AAA spokesperson Andrew Gross said in a statement earlier this week.

The Biden administration has, since its entry into office, signaled that it would wage war on the U.S. oil and gas industry as it seeks to implement an ambitious energy transition agenda leaning heavily on the electrification of transport. However, this agenda has clashed with the political realities of gas prices and ruling party popularity just a year before midterms.

It was this clash and the eventual prevailing of political realities that had the White House reach out to OPEC and ask it to boost production as a way of taming U.S. retail gasoline prices. OPEC, however, dug its heels in and refused to cooperate, forcing the Biden administration to consider alternative measures.

“SPR [releases] came on the table a nanosecond after Jake Sullivan was rebuffed in Riyadh and the administration realized shale producers wouldn’t be able to increase production quickly enough,” Bob McNally, president of Rapidan Energy Group, told the FT.

By Charles Kennedy for Oilprice.com

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Leave a comment
  • Jason on October 07 2021 said:
    When governments panic over lack of supply, it signals to the market that the commodity is undervalued. This is going to be incredibly bullish for oil.???????
  • William Peterseim on October 07 2021 said:
    Lest we forget, this situation was all triggered by inept policies enacted by Pres. Biden and his Administration. Under Pres. Trump, the U.S. had gained energy independence and become one of, if not the largest exporter of oil globally, for the first time since, likely the late 1950's. But Biden's hatred of all things "not green" pushed by Kamala and AOC and such leftist radicals within the Democratic Party today, reversed all of that. As the Lemings throughout Europe are learning (the hard way right now) the world is NOT in a position at this time, or likely in the near future, to turn its back on fossil fuels. China is not only shutting down industries but blacking out cities and freezing its northern population over their short-sightedness. The whole energy system is in rapid reverse: natural gas now too high, reverting to oil now short and coal, which Biden really targeted to destroy and wind and solar are too undependable Shouldn't use Reserve. Grant drilling rights to vast areas Democrats have placed off limits, starting w Clinton.

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