Geithner says oil reserves can be tapped if needed

Treasury Secretary Timothy Geithner told lawmakers Thursday that the United States and other nations can tap oil reserves if they're needed to restrain prices and keep the global economic recovery moving forward. 

Geithner downplayed the risks that political unrest in the Middle East and North Africa was posing a major threat to the nation's economic recovery or could cause a long-term spike in inflation during testimony before the Senate Foreign Relations Committee.

"It's important to note that there is considerable spare oil production capacity globally, and we and other major economies possess substantial strategic reserves of oil," he said. "If necessary, those reserves could be mobilized to help mitigate the effect of a severe, sustained supply disruption."

His views that rising oil prices will boost inflation are similar to those held by Federal Reserve Chairman Ben Bernanke, who told lawmakers this week that they would probably have a short-term effect and wouldn't require action from the central bank. 

"Oil prices alone, with nothing else moving, would probably not be enough to make us respond," Bernanke told a House panel on Wednesday. 

The Treasury and the Obama administration are monitoring oil prices and a potential supply disruption, and will act if the risks escalate, Geithner said. 

"In the United States, rising gasoline prices have left consumers with less money to spend, but underlying inflation across all goods and services is modest," he said.

Geithner also talked about U.S. sanctions against Libya and said that federal officials have frozen $32 billion in assets under U.S. control, up from $30 billion last week. He said the government has found another $1.9 billion in assets in the past couple of days.