A customer fills up gas at a Shell gas station in Hercules, California, United States, on Tuesday, May 23, 2023.
David Paul Morris | Bloomberg | beautiful images
President Joe Biden’s top economic adviser said Thursday that the White House will “ensure gas prices remain affordable” when asked whether the administration would consider tapping the Strategic Petroleum Reserve .
“Of course there are things that have been done in the past that we will continue to monitor closely, ensuring that gas prices remain affordable for so many families,” said National Economic Advisor Lael Brainard. The US is about to enter the summer driving season. Semafor World Economic Summit.
Gas futures prices have increased nearly 29% this year, with prices at the gas station now averaging $3.67 per gallon, according to the AAA motorists association. US crude is up 15% year-to-date thanks to stronger demand, tighter supply due to OPEC+ production cuts and rising geopolitical risks in the Middle East and Eastern Europe.
“We pay close attention to international oil markets and domestic gas prices,” Brainard said. We will continue to monitor closely and want to ensure that those gas prices remain at their current levels.” US crude oil reached a high of 87.67 USD/barrel this year returning to about $83 a barrel.
of Iran Unprecedented weekend airstrikes about Israel have raised concerns that an Israeli counteroffensive could spark a wider war in the region, affecting crude oil supplies. Brainard said the White House is closely monitoring “geostrategic risks” in the Middle East.
And Ukraine’s repeated drone attacks on Russian oil refineries have also left the Biden administration concerned about their effect on prices. Defense Secretary Lloyd Austin told Congress last week that those attacks could have “a knock-on effect on the global energy situation.”
White House climate advisor John Podesta said Tuesday that Biden “will do what he can to ensure” gasoline is affordable, noting that the previous administration tapped the Strategic Petroleum Reserve to reduce prices at the pump .
The White House released 180 million barrels from the SPR in 2022 as oil and gas prices surged following Russia’s invasion of Ukraine. Reserves are now at about 365 million barrels, their lowest in decades, a point of contention with Republicans in Congress.
According to a March research note from JPMorgan, Russia’s decision to increase cuts by an additional 470,000 barrels per day to meet its OPEC+ commitments could be particularly problematic. According to the company, the global benchmark Brent crude oil price could reach $100 in September – just two months before the November presidential election – without countermeasures.
According to JPMorgan, the chances of another release from the SPR will increase if gasoline prices move closer to $4/gallon, which could happen as soon as May. According to the bank, despite the low SPR, the The Biden administration still has room to release an additional 60 million barrels of crude oil.
Oil prices have fallen more than 3% this week as war fears eased along with Israel’s decision not to strike back immediately against Iran, but the situation remains highly volatile. Daniel Yergin, vice president at S&P Global, said oil prices above $90 a barrel are a problem for the broader market.
“It’s also a problem for inflation in general, and it’s a real problem if you’re an incumbent running for office,” Yergin told CNBC.Squawk Box” in the first day of this month.
