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Democrats Press Biden to Consider Oil Export Ban, SPR Release -Breaking

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© Bloomberg. On Thursday, October 21, 2021, a driver fills up a minivan with gasoline at La Jolla Shell station, California. American motorists will face high fuel costs as the gasoline demand soared to its highest level in over a decade. Photographer: Bing Guan/Bloomberg

(Bloomberg) — President Joe Biden faces growing pressure from fellow Democrats to address rising gasoline prices by taking steps that include a possible ban on oil exports and the release of crude from the nation’s strategic reserves.

In a letter to Biden this week, eleven Democratic senators, many of whom are known for being concerned about climate change, asked him to quickly act on the rising national average gasoline price. This is the highest since 2014. The senators invoked the “undue burden” on families and small businesses and pressed for the release of oil from the nation’s strategic reserve or even the more drastic step of banning export of .

“As the United States works to boost the development of clean and renewable energy over the long-term, we must ensure that Americans are able to afford to fill up their cars at the pump in the meantime,” said the letter, which was signed by climate hawks such as Elizabeth Warren of Massachusetts and Green New Deal author Ed Markey. 

Biden may use this letter as political cover for millions of barrels to be released from the Strategic Petroleum Reserve while the administration is taking part in international climate talks in Scotland.

Bob McNally of Rapidan Energy Group, a consultant, stated that the most probable course of action would be to release oil from Strategic Petroleum Reserve. He is also a former White House official.

“The administration, by all counts is looking hardest at an SPR release, which the market has come to expect,” McNally said. “I still believe the market is expecting an SPR release later this week and I think that’s the likeliest option.”

As it would cause disruption to the global flow of oil, a ban seems less likely. Six years ago, Congress removed a ban of 40 years on U.S. crude oil exports. This has had a profound impact on global crude markets and geopolitical power shifts as well as destroying entire economies. The U.S. has emerged as the world’s largest oil producer and its oil has reached more than 50 countries, with shipments often surpassing those of any OPEC nation aside from Saudi Arabia.

Energy Information Administration data shows that the U.S. imported nearly three million barrels per day of crude oil in August.

The White House has said it is considering “all tools available” to it as increasing oil and gasoline prices threaten the economic rebound and pose a political risk for the president. His options to control the rise in oil prices are very limited and would either be short-lived, or interfere with his climate change agenda. 

Crude dropped 1.6% to $82.84/barrel at 11:16 in New York.

©2021 Bloomberg L.P.

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