Oil and gas prices: Senate Democrats urge Biden to consider tapping emergency oil reserves or even ban oil exports to fight high prices

In the letter, Senators Elizabeth Warren, Sherrod Brown, Jack Reed and others warned that the high price of gasoline for seven years has “placed an undue burden on families and small businesses trying to make ends meet. “.

“In light of these pressing concerns, we ask you to consider all the tools available to you to lower gasoline prices in the United States. This includes a release of the strategic petroleum reserve and a ban on exports of gasoline. crude oil, ”the lawmakers wrote.

Industry experts are skeptical that operating the SPR would deal a lasting blow to gas prices, and they have warned that the ban on oil exports could backfire on U.S. consumers.

The national average price of gasoline rose to $ 3.42 per gallon on Monday, from $ 2.11 a year ago, according to AAA.

Democrats said they shared the Biden administration’s concerns that the decision by OPEC and others to “deliberately manipulate gas prices by limiting supply, as well as the choice of tenants and producers. nationals to continue to export US oil, threaten to send even high already record prices. “

“Continued US exports and collusion in overseas sourcing could be devastating for many in our states,” the Democrats wrote.

Energy Secretary Jennifer Granholm confirmed to CNN’s Dana Bash over the weekend that the SPR is “one of the tools” Biden has and “he’s looking into this.” Granholm suggested action could be taken as early as Tuesday, when a new government forecast on energy supply and demand is expected to be released.

Still, oil watchers have said that operating the SPR will not solve the underlying problem: supply is struggling to keep up with demand. Goldman Sachs previously estimated that an SPR release would be only “modest help,” lowering the bank’s year-end forecast for Brent oil – the global benchmark – by just $ 3 a barrel.

“It will have a minor impact on prices, unless they make a massive, massive exit,” Francisco Blanch, head of global commodities at Bank of America, told CNN. “It won’t kill the rally.”

And some argue that the ban on U.S. oil exports would impact U.S. drivers.

The problem is that oil is a globally traded commodity and US gas prices are set by Brent. If the world suddenly lost access to U.S. oil, Brent crude prices would likely rise due to lower global supply. And American oil refiners need access to foreign oil to produce gasoline, jet fuel, and diesel. They can’t just rely on American oil.

That’s why Goldman Sachs told customers last month that an export ban would likely be “counterproductive” and have a “likely upward impact” on retail fuel prices.

Robert McNally, chairman of consultancy firm Rapidan Energy Group, agreed the ban on oil exports would be counterproductive, and added that the abrupt change in policy would scare off investors and further reduce investment in US domestic shale. .

“Banning oil exports would be a macro goal, not just energy,” McNally told CNN in an email.

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