The White House says releasing more oil from reserves is ‘on the table.’
The United States is prepared to release oil from the its Strategic Petroleum Reserve as the Russia-Ukraine crisis helps drive up prices.
Russia is the No. 3 producer of oil, after the United States and Saudi Arabia, and it pumps about 10 percent of the world’s demand. Little of that goes to the United States, but the escalating tensions between Russia and the West have helped fuel a global increase in prices, which already were the highest since 2014.
Jen Psaki, the White House press secretary, said on Wednesday that a release of reserves was “certainly an option on the table.”
America’s emergency stockpile, which has about 580 million barrels of oil, has already been tapped recently: President Biden ordered a release of 50 million barrels in November as he sought to drive down gas prices that have contributed to high inflation and pushed OPEC Plus, the cartel of oil producers that includes the Organization of the Petroleum Exporting Countries, Russia and others, to pump more oil. The United States consumes roughly 20 million barrels of oil a day.
That release had little, if any, effect. Oil prices, which had been around $76 before the announcement, actually rose after it — analysts had been expecting a larger release. Prices eventually fell after the announcement of the highly contagious Omicron variant of the coronavirus, which stoked fears of another slowdown in travel.
But the price for a barrel of U.S. crude has since jumped. Brent crude, the global benchmark, neared $100 a barrel on Tuesday, and West Texas Intermediate crude, the U.S. benchmark, has topped $95 a barrel. Both have since fallen in price slightly. Prices at the pump have ticked up, too.
The pain from any disruption could be most acute in Europe. Russia supplies a large portion of the region’s natural gas, which has been soaring in price over the past year. The region’s stockpiles are low, and relief is unlikely to come soon — on Tuesday, Germany said it was stopping regulatory progress on Nord Stream 2, a new natural gas pipeline connecting it with Russia, part of a set of coordinated sanctions after President Vladimir V. Putin of Russia ordered troops into breakaway regions of Ukraine. There is also concern Mr. Putin could cut off or limit supplies in retaliation.
So far, sanctions have not directly targeted Russia’s energy industry and there has not been any direct impact to supplies. And prices have been steadied by reports last week of progress on talks to revive a nuclear deal between the U.S. and Iran, a development that could allow tens of millions of barrels of oil onto the market.