Rep. Chris Van Hollen (D-Md.) on Thursday called on President Obama to signal that the United States is willing to release oil from the Strategic Petroleum Reserve (SPR), in order to limit Iran's ability to manipulate oil prices by taking "aggressive actions," such as recent missile tests.
"As you know, yesterday Iran test-fired several ballistic missiles, including some that could strike Israel or U.S. bases in the region," Van Hollen wrote. "These actions, coupled with Iranian threats to close the Strait of Hormuz, have already contributed to a spike in crude oil prices."
Van Hollen noted that the United States and the European Union imposed an embargo on the purchase of Iranian oil, which could also reduce oil supplies and lead to increased prices.
Van Hollen did not call for any specific amount of oil to be released, and indicated that for now, just indicating a willingness to release some oil is a good first step. He said this first step could "preempt a rise in oil prices based on fears and speculation about any conflict in the Gulf."
"In my judgment, that signal should include an explicit declaration that we are prepared to use our Strategic Petroleum Reserve (SPR) to offset any significant supply disruption from the Persian Gulf," he wrote.
Van Hollen noted that under current law, a limited drawdown is allowed in the event of circumstances that could lead to a domestic or international oil shortage.
"There is no doubt that an effective embargo of Iranian oil, coupled with ongoing threats from Iran, could result in an international supply shortage, and that the release of oil from the SPR could assist directly or significantly prevent the adverse economic impacts of such a shortage," he wrote.
In June, the Republican-led House approved a bill that would require the government to expand domestic oil leasing in the event that it decides to draw down oil from the SPR.
— This story was corrected on July 9 to note that Van Hollen is not proposing the release of oil now, but is proposing that the U.S. indicate a willingness to take that step.