The U.S. has no plans to tap the nation’s emergency oil stockpile to offset supply losses from Iran, according to U.S. Energy Secretary Rick Perry.
Selling oil from the Strategic Petroleum Reserve would have “a fairly minor and short-term impact,” Perry told reporters in Washington on Wednesday. Following his remarks, oil jumped higher to erase most of the day’s losses.
Analysts have speculated that President Donald Trump could release oil from the reserve to temper the market effects of U.S. sanctions on Iran’s crude exports, which will take effect Nov. 4. Shipments from the Islamic republic have already fallen 35 percent since April, raising concerns about dwindling global supply. After a meeting this past weekend between OPEC and its allies ended without any pledge to raise production, the international oil benchmark rose above $82 a barrel to the highest in almost four years.
Perry’s remarks come a day after Trump blamed OPEC for high crude prices. “OPEC nations are, as usual, ripping off the rest of the world and I don’t like it,” he said in a speech to the United Nations General Assembly in New York on Tuesday.
Perry on Wednesday downplayed the supply risks, saying other producers can offset losses from Iran.
“The market has already adjusted,” he said. “We got some opportunities to fill the void as sanctions go into place in November.”
The U.S. in August announced it would release 11 million barrels of oil from the reserve in October and November as part of a regular drawdown schedule to raise money for government programs. But that likely won’t do much to mitigate the impact of sanctions, which the administration estimates will remove 700,000 to 1 million barrels a day of Iranian crude from the global market by early November.
Rising oil prices in the runup to U.S. midterm elections in November may boost congressional support for proposed legislation that would open up the cartel to antitrust lawsuits. The House of Representatives introduced a version of the “ No Oil Producing and Exporting Cartels Act” bill in May. The Senate has also revived a bill which would amend the Sherman Antitrust Act of 1890. That’s the law used more than a century ago to break up the oil empire of John Rockefeller.