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Oil

US could tap emergency petroleum reserve for first time since 2011: Energy secretary

Granholm also said banning crude oil exports was also an option to help drive gas prices down.

Published: Updated:

The United States is considering tapping its “strategic petroleum reserve” for the first time since 2011, Energy Secretary Jennifer Granholm said Wednesday, in an effort to drive gas prices back down.

Speaking to the Financial Times Energy Transition Strategies Summit, the US official also refused to rule out banning exports of crude oil. “That’s a tool that we have not used, but it is a tool as well,” Granholm was quoted as saying.

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Brent crude hit $83.47 a barrel, its highest since October 2018, but by 1653 GMT, it was down $1.62, or 2 percent, to $80.94.

US crude climbed to $79.78, its highest since November 2014, before retreating to $77.42 with a $1.51 or 1.9 percent loss on the day.

Gas prices have skyrocketed in recent months due to several factors, including the refusal of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to increase output. The US has urged OPEC+ to do so, but the group has chosen to stick to an agreed plan of slowly increasing output.

Asked if the US would tap into its reserve of the “world’s largest emergency stockpile of crude oil,” as reported by FT, Granholm said it was “a tool that’s under consideration.”

The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen over Freeport, Texas, April 27, 2020. (Reuters)
The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen over Freeport, Texas, April 27, 2020. (Reuters)

During a trip to Saudi Arabia last week by White House National Security Advisor Jake Sullivan, the most senior US official under President Joe Biden to do so, he reportedly asked Saudi Arabia to push for an increase.

According to FT, Sullivan was turned down.

In her comments Wednesday, the US energy secretary said Washington was doing all it could to help with the shortage of natural gas around the world, “including looking into accusations of ‘manipulation of the market’ by Russia.”

- Additional reporting from Reuters

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