President Obama is keeping open the option of drawing oil out of the U.S. Strategic Petroleum Reserve to drive down gasoline and other fuel prices that economists say have slowed economic growth, the White House said.
Tapping the oil reserve could quickly knock down fuel prices, based on precedent during the Clinton and George W. Bush administrations. That could quickly curb operating costs for truckers, railroads, ship operators and airlines.
A number of industry officials and economists blame high fuel prices this spring for taking momentum away from the economic recovery.
“We believe that we are in a situation where supply is not meeting demand, and there are a variety of reasons for that, including disruption caused by the situation in Libya, which has removed 1.5 million barrels a day from the market,” White House Press Secretary Jay Carney said in his daily press briefing on June 8. He said U.S. officials had been talking with officials from oil-exporting nations along those lines, ahead of Wednesday’s OPEC meeting that failed to reach agreement to increase production.
Separately, the Huffington Post reports that Obama hinted to some personal finance reporters Wednesday that an SPR tap could be coming. “My general view has been that the strategic petroleum reserve is to be used when you don’t have just short term fluctuations in the market, but where you have a disruption,” the Huffington Post quoted Obama as saying. “Libya has taken 125 million barrels off the market. We’re examining broadly what that means in terms of the oil market.”
The White House has not released the text of those remarks, but Carney in his briefing said, “As for the Strategic Petroleum Reserve, the president considers that an option, hasn’t made a decision about that, but as you know it is designed — the reserve is designed to deal with disruptions in oil supplies. And the president considers that an option going forward.”
Reuters also reported that the White House and the International Energy Agency were making “unusually blunt references” to reserve drawdowns after the OPEC meeting.