Amid the recent spike in oil prices, following the Iran war, US President Donald Trump is expected to review a set of options related to taming the hike. The prices have reportedly spiked more than $100 a barrel due to the ongoing conflict between Israel, the US and Iran.
US officials, along with their counterparts from the Group of Seven major economies, are discussing a possible joint release of crude oil from the strategic reserves.
This is one of the measures under consideration. Other options include restricting US exports, intervening in oil futures markets or waiving some federal taxes. US is also considering lifting requirements under the Jones Act, which is a law requiring domestic fuel to move only on US-flagged ships.
The surge in oil prices is likely to hurt US businesses and consumers ahead of the November midterm elections, when Trump’s fellow Republicans are hoping to retain control of Congress.
White House says ‘have strong game plan’
Speaking on the matter, White House spokesperson Taylor Rogers said that the administration is in coordination with the relevant agencies. “
President Trump and his entire energy team have had a strong game plan to keep the energy markets stable well before Operation Epic Fury began, and they will continue to review all credible options,” he added.
Global prices of crude oil have taken a hit, not seen since mid-2022, briefly touching $119 a barrel, with gasoline and other fuel costs surging.
Meanwhile, the White House last week asked federal agencies to assemble proposals that could help ease pressure on crude and gasoline prices. The talks involved top White House officials.
Analysts say US policy will have little effect
As per the report, analysts have said that US policy options will have little effect on the global oil markets as long as the conflict blocks Middle East oil exports. The oil exports have been blocked due to the restricted movement in the Strait of Hormuz, used by Middle Eastern producers to export oil.
Industry officials have stressed that White House only have few tools unless authorities can restore the flow of tankers through the Strait of Hormuz.
“The problem is options range from marginal through symbolic to deeply unwise,” an official source engaged in the efforts told Reuters.
The energy market crisis comes at a time when Trump has sought to keep fuel prices low as a cornerstone of his economic message to voters. A prolonged spike in oil and gasoline costs could ripple through the broader economy, raising transportation and consumer prices.
A White House proposal to offer naval escorts and insurance support for tankers passing through the Strait of Hormuz has so far done little to increase shipping through the key waterway.
(With input from Reuters)