Biden seeks to control oil prices if Middle East conflict causes them to skyrocket | ET REALITY

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Biden administration officials, concerned that a growing conflict in the Middle East could send global oil prices soaring, are looking for ways to keep U.S. gasoline prices low if such a jump occurs.

Those efforts include talks with big oil-producing nations like Saudi Arabia that are curbing supply and with U.S. oil producers that have the capacity to pump more than they already produce, administration officials say.

A senior administration official said in an interview that it was also possible that the president would authorize a new round of releases from the country’s authorities. Strategic Petroleum Reserve, an emergency reserve of crude oil that is stored in underground salt caverns near the Gulf of Mexico. President Biden aggressively tapped into the reserve last year after Russia’s invasion of Ukraine sent oil prices soaring, leaving the amount of oil in those reserves at historically low levels.

The conflict in the Middle East has not yet caused oil prices to rise. TO barrel of Brent crude oil On Wednesday it was trading at around $88 on global markets. That figure is up from $84 a barrel earlier this month, shortly before Hamas attacked Israel and shook markets. But analysts and administration officials fear that prices could rise significantly further if the conflict in Israel spreads, restricting the flow of oil out of Iran or other major producers in the region.

So far, American drivers have not experienced any problems. The average price of gasoline nationwide was $3.54 a gallon on Wednesday, according to AAA. That was about 30 cents less than a month ago and 25 cents less than the same day last year.

Administration officials are wary of the possibility of prices rising again above $5 a gallon, a level they briefly reached in the spring of 2022. Biden made extraordinary efforts then to help lower prices, but it is These measures are likely to be much smaller. effective in the event of a new oil crisis.

“They did it last year in the second half, but this year I think they’ve run out of bullets,” said Amrita Sen, research director at Energy Aspects.

In part, that’s because the administration didn’t replenish the strategic reserve more aggressively when prices were lower, Sen said. That could undermine its ability to counter the current price increase. “They got a little confident that prices would stay low,” she said. “In a way, they’ve missed the boat.”

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