US energy secretary Jennifer Granholm has raised the prospect of releasing crude oil from the government’s strategic petroleum reserve, declaring that “all tools are on the table” as the Biden administration confronts a politically perilous surge in the price of gasoline.
With the average price of petrol at the pump hovering at $3.19 a gallon — the highest in seven years — the White House fears that the rise in fuel costs could damage its political prospects ahead of the midterm elections next year.
“It’s a tool that’s under consideration,” Granholm said of a release of crude supplies from the national strategic petroleum reserve, which analysts say could calm oil markets and bring prices down.
Granholm also did not rule out a ban on crude oil exports. “That’s a tool that we have not used, but it is a tool as well,” she told the FT Energy Transition Strategies Summit on Wednesday.
The strategic petroleum reserve, located near the Gulf of Mexico, is the world’s largest emergency stockpile of crude oil. Managed by the US Department of Energy, the reserve contained 617.8m barrels of oil last week — equal to about a month of US petroleum products demand.
The last big release was in 2011, when the Obama administration worked with other International Energy Agency members to tap emergency stocks to bring down soaring prices. Congress has also authorised periodic sales to raise government revenue.
Exports of US crude oil have been unfettered since Congress lifted federal restrictions in 2015.
The price of US crude stood at about $77.60 a barrel on Wednesday afternoon, hovering at its highest level since 2014. It has risen in tandem with other commodity prices, prompting fears that energy inflation could stall a post-pandemic global economic recovery.
Read more
Energy crisis: Gas markets swung sharply on Wednesday after Russia president Vladimir Putin said his country was prepared to stabilise the soaring global energy prices that are threatening to curb industrial activity and sharply raise inflation.
Thanks for reading FirstFT Asia. Here’s the rest of today’s news — Leart
Five more stories in the news
1. Dubai’s billionaire ruler targeted ex-wife with spyware Sheikh Mohammed bin Rashid al-Maktoum targeted the phone of his estranged wife Princess Haya with a military-grade spyware tool during a London court battle over their two children, a High Court judge has found.
2. Taiwan warns that China will be able to invade by 2025 Chiu Kuo-cheng, Taiwan’s defence minister, has warned that China will be fully capable of invading the island within five years, in the government’s first clear message to the public that the country faces a threat of war.
3. Nato expels 8 Russians for spying Nato has expelled eight “undeclared intelligence officers” from the Russian delegation to the military alliance, and halved the total size of Moscow’s representation, in a move that will further deteriorate relations between western militaries and the Kremlin.
4. Amazon wins record US tax breaks Amazon has won a record amount of tax breaks this year as local officials try to lure the online shopping giant to expand its one-day or same-day delivery networks in their areas. According to data from Good Jobs First, Amazon has so far secured about $650m in sweeteners from local and state governments in 2021.
5. Mitch McConnell offers compromise to stave off US debt ceiling crisis The Senate’s top Republican has offered Democrats two pathways to avoid a debt limit crisis, a rare olive branch in a long-running stand-off that has spooked investors and corporate America.
Coronavirus digest
The Biden administration will invest a further $1bn in Covid-19 testing in its continued effort to keep the pandemic under control.
New Zealand has raised interest rates for the first time in seven years as concerns over rising property prices and inflation outweigh the importance of the Pacific nation’s battle to control the spread of coronavirus.
Janan Ganesh: Acceptance of vaccinations and mandates shows that even in populist times voters want to be led.
The day ahead
BoC governor speech Tiff Macklem, governor of the Bank of Canada, will speak before the Council on Foreign Relations on Thursday.
Who will win the Nobel Peace prize for literature? Sweden is expected to announce the winner on Thursday, followed by peace on Friday and economics on Monday.
Whanetft else we’re reading and listening to
The economic threats from China’s real estate bubble China’s population is ageing and 60% of it is already urbanised. All these signal that the property boom must end, writes Martin Wolf.
We need to talk about Squid Game The hit Korean series is on track to be Netflix’s most popular show but it exposes hard truths about human behaviour, writes Fani Papageorgiou.
Trading or gambling? Troubled day traders are increasingly turning to gambling helplines as mobile brokerage applications blur the line between investing and online sports betting — an issue that has drawn the attention of the US Securities and Exchange Commission.
From Panama to the Pandora papers This week’s exposé on the financial affairs of the rich and powerful, dubbed the Pandora Papers, highlights the progress that has been made since the world began to clamp down on offshore tax evasion in 2008. Global tax correspondent Emma Agyemang explains why.
Will American drivers go electric? For the past four decades Ford’s F-150 pick-up truck has been the best-selling auto in the US. America’s most iconic vehicle is now going electric but will drivers in the US embrace the new technology like consumers in Asia and Europe? This is the latest part of our electric vehicle revolution series.
Would you buy an electric vehicle? Do you already have one? Tell us in our latest poll.
The tiny fund that took on a US giant and won In the third episode of our special five-part series on sustainable or ESG investing, Charlie Penner of Engine No 1 talks about the public proxy campaign he launched against ExxonMobil which forced the oil major to prepare for a future free of fossil fuels.
Travel
Greenland, the Baffin Base Camp and Georgia are three of the most adventurous destinations ski enthusiasts are heading to this winter. Oh, and there’s Uzbekistan. Could this Central Asian country be skiing’s next big thing?
Source: Economy - ft.com
