White House: No decision made on tapping emergency oil stockpiles

The Obama administration is “coordinating” with world nations to respond to volatile energy markets, but has made no decisions on whether to tap emergency oil reserves, a White House spokesman said Wednesday.

The comments come amid news reports that the United States has approached French and British officials about releasing the reserves.

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The White House has consistently said tapping the U.S. Strategic Petroleum Reserve, a 696-million-barrel oil stockpile along the Gulf Coast, is one option to deal with soaring oil prices and potential supply losses.

“We are coordinating with our partners around the globe to confront the global phenomenon that is the volatility in the energy markets right now. But I don't have any specific guidance for you on the Strategic Petroleum Reserve, other than to tell you something that we've said many times, which is that it's an option on the table,” White House spokesman Josh Earnest told reporters Wednesday.

“But anybody who tries to convince you, in this government or any other government, frankly, that specific decisions have been made or actions had been proposed is not speaking accurately.”

Bloomberg and others reported Wednesday that U.S. officials had approached French officials about a coordinated oil release. French Industry Minister Eric Besson said the country “welcomed the proposal,” according to Bloomberg.

Reuters reported earlier this month that U.S. and British officials informally agreed to release their country’s strategic oil.

The consulting firm ClearView Energy Partners, in a note Wednesday afternoon, says events are leading toward another SPR release within the next three months.
 
“We reiterate our better-than-even odds for a second SPR draw before the second tranche of U.S. sanctions on countries buying Iranian petroleum begins June 28, 2012 and the E.U. embargo on Iranian oil fully phases in on July 1,” they write.

Talk of tapping the SPR comes as President Obama is facing increasing pressure to rein in soaring gas prices, which reached a national average of $3.91 per gallon Wednesday, according to AAA.

Republicans have sought to pin the blame for high gas prices on Obama, arguing that the president has not done enough to expand domestic drilling.

Energy analysts say the federal policymakers can do little to lower gas prices in the short term, as they are tethered to oil prices, which are set on world markets. Even a dramatic expansion of domestic oil-and-gas leasing would have little effect on prices, they say.

Obama tapped the SPR last summer, releasing 30 million barrels of oil in coordination with other International Energy Agency member countries.

Liberal Democrats have ramped up pressure on Obama to release oil from the SPR again, amid growing tensions with Iran and high oil prices.

But Republicans have preemptively bashed any efforts to tap the SPR, arguing it is a ploy to score political points going into the election.