The Trump administration is actively considering tapping into the nation’s emergency supply of crude oil as political pressure grows to rein in rising gasoline prices before congressional elections in November, two people familiar with the situation said.
No decision has been made to release crude from the 660-million-barrel stockpile, known as the Strategic Petroleum Reserve, but options under review range from a five-million-barrel test sale to a larger release of 30 million barrels, said the people who requested anonymity to discuss non-public deliberations.
An even larger release is possible it it were to be coordinated with other nations.
The national unleaded average gasoline price rose to $2.89 Friday, an increase of 63 cents from where it was a year ago, according to data from AAA.
The U.S. gasoline price average is expected to range between $2.85 per gallon and $3.05 per gallon through Labor Day, according to the group.
And as prices close in on $3 a gallon, Trump hasn’t been shy about voicing his displeasure.
“Oil prices are too high, OPEC is at it again. Not good!” he said on Twitter last month. On the Fourth of July, Trump tweeted: “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!”
Analysts remain split on the effect such a release would have and how long it it last. Depending on its size and timing, an oil sale might leave the market unmoved, or have a real, if fleeting, impact on prices.
“I think a SPR release would have a psychological impact on the market, it may not translate into lower gasoline prices, but it would immediately bring down crude prices at least temporarily until the market adjusts,” said Joe McMonigle, senior energy analyst at Hedgeye Risk Management.
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A release of crude oil in September or October could cut gasoline prices for consumers ahead of November mid-term elections.