A customer fills up at a Shell gas station in Hercules, California, United States, Tuesday, May 23, 2023.
David Paul Morris | Bloomberg | Getty Images
President Joe Biden’s top economic adviser said Thursday the White House would “ensure gas prices remain affordable” when asked whether the administration would consider tapping the Strategic Oil Reserve.
“There are of course things that have been done in the past and we will continue to monitor very closely, to ensure that gas prices remain affordable for so many American families as we head into the summer season.” , declared national economic advisor Lael Brainard. Semafor Global Economy Summit.
Gasoline futures have risen nearly 29% this year, with prices at the pump currently averaging $3.67 per gallon, according to the AAA motorists association. U.S. crude has gained 15% year-to-date due to stronger demand, tighter supplies due to OPEC+ production cuts and rising geopolitical risks in the Middle East. Orient and Eastern Europe.
“We are very attentive to international oil markets and domestic gas prices. We will continue to monitor them closely and want to ensure that these gas prices remain within current ranges,” Brainard said. U.S. crude oil hit a high of $87.67 a barrel this year before falling to around $83 per barrel.
Iran unprecedented weekend air assault on Israel has raised fears that an Israeli counterattack could trigger a wider war in the region that would impact crude oil supplies. The White House is closely monitoring “geostrategic risk” in the Middle East, Brainard said.
And repeated Ukrainian drone strikes on Russian oil refineries also have the Biden administration concerned about their effect on prices. Defense Secretary Lloyd Austin told Congress last week that the attacks could have “impacts on the global energy situation.”
White House climate advisor John Podesta said Tuesday that Biden “will do what he can to make sure” gasoline is affordable, noting that the administration has in the past tapped the Strategic Oil Reserve to drive down prices at the pump.
The White House released 180 million barrels from the SPR in 2022 as oil and gas prices soared following Russia’s invasion of Ukraine. Reserves currently stand at around 365 million barrels, the lowest level in decades, a point of contention with congressional Republicans.
Russia’s decision to deepen its cuts by 470,000 barrels per day to meet its OPEC+ commitments could prove particularly problematic, according to a March research note from JPMorgan. The price of Brent crude oil, a global benchmark, could approach $100 by September – just two months before the November presidential election – without countermeasures, according to the company.
The chances of another SPR release will increase if gasoline prices move closer to $4 a gallon, which could happen as early as May, according to JPMorgan. Despite the low SPR levels, the Biden administration has room to release an additional 60 million barrels of crude oil, according to the bank.
Oil prices fell more than 3% this week on easing war fears and Israel’s decision not to immediately retaliate against Iran, but the situation remains highly uncertain. Daniel Yergin, vice president of S&P Global, said oil prices above $90 a barrel are a problem for the market as a whole.
“It’s also a problem for inflation in general, and it’s a real problem if you’re an incumbent running for re-election,” Yergin told CNBC.Scream box” earlier this month.
