Senate Democrats Requests Biden to tap Emergency Reserves or ban oil Exports to Help with High gas Prices

On Monday, nearly a dozen Senate Democrats urged President Joe Biden to consider releasing emergency oil reserves or even banning oil exports to overcome high gas prices.

Senator Elizabeth Warren, Sherrod Brown, Jack Reed and others said that the seven-year high in prices has “placed an undue burden on families and small businesses trying to make ends meet.”

“In light of these pressing concerns, we ask that you consider all tools available at your disposal to lower US gasoline prices. This includes a release from the Strategic Petroleum Reserve and a ban on crude oil exports,” they said in the letter.

It’s questionable that tapping the Strategic Petroleum Reserve (SPR) will have an impact on gas prices, and experts have warned that a ban on oil exports could backfire on the American public.

Fuel prices went up to $3.42 per gallon across the country on Monday, up from $2.11 a year earlier, according to AAA.

The Democrats expressed concern that OPEC and others’ decision to “purposefully manipulate gas prices by constraining supply, as well as the choice of domestic leaseholders and producers to continue to export US petroleum, threaten to send already record prices even high.”

According to oil analysts, tapping the SPR will not resolve the underlying issue: supply is unable to keep up with demand. Goldman Sachs previously estimated that an SPR would provide only “modest assistance,” lowering the bank’s year-end forecast for Brent oil — the global benchmark — by just $3 a barrel.

Additionally, some argue that prohibiting US oil exports would have a bounce effect on US drivers.

The issue is that oil is a globally traded commodity — and Brent sets US gas prices. If the world suddenly lost access to US oil, Brent crude prices would almost certainly rise as global supply became depleted. Also, US oil refiners require foreign oil in order to manufacture gasoline, jet fuel, and diesel. They cannot rely entirely on US oil.

Robert McNally, president of consulting firm Rapidan Energy Group, agreed that prohibiting oil exports would be counterproductive, adding that the abrupt change in policy would frighten investors and further depress investment in domestic shale in the United States. “Banning oil exports would be a macro, not just energy, own-goal,”

Original source material for this article taken from here