Asked at an industry conference on Tuesday whether strategic oil reserves (SPR) will be released in the future, senior White House adviser John Podesta (John Podesta) said that US President Joe Biden will do his best to ensure that gasoline prices are reasonable.

The Biden administration sold 180 million barrels of oil from strategic oil reserves in about six months in 2022, the largest SPR sale in history to lower gasoline prices after the Russian-Ukrainian conflict.

The massive SPR sale drew heavy criticism from the Republican Party, as the move caused SPR inventories to drop to their lowest level in about 40 years.

At the New York summit hosted by Bloomberg New Energy Finance (BNEF), Podesta said, “The president has done this before (releasing SPR). I think he wants gasoline prices to stay within an affordable range, and he will do everything he can to ensure that.” He didn't say whether he would do this anytime soon.

Meanwhile, due to high oil prices, the US Department of Energy suspended oil buybacks this month to replenish SPR stocks. The US Department of Energy has previously stated that it plans to buy back oil at a price of $79 or less per barrel, which is lower than the average price of about $95 per barrel when SPR is urgently sold in 2022.

Energy Secretary Granholme said at a Senate hearing on Tuesday that the Biden administration still wants to make up the SPR and said “we want to buy back at a speed beneficial to taxpayers.”

Oil prices have risen well above $79 per barrel due to fears that the war between Israel and the Palestinian radical organization Hamas might expand.

As the peak of summer travel approaches, gasoline prices in the US are likely to soar further. Vikas Dwivedi (Vikas Dwivedi), a global oil and gas strategist at Macquarie Group (Macquarie Group), predicts that car demand is expected to reach a new post-pandemic high at that time, which may force the Biden administration to release SPR.

“The government must vigorously release SPR in order to control oil prices,” Dewi Vidi said in a telephone interview. There aren't many tools available, and it's one of the most effective.”

Since this year, gasoline prices in the US have soared 17%, driven by rising international oil prices. International oil prices rose 18% over the same period as supply disruptions caused a deficit in the global balance. Increased geopolitical tension in the Middle East region, which accounts for one-third of global oil production, combined with OPEC+ production cuts and Mexico's decision to cut oil exports, are putting pressure on the market.

US gasoline prices have risen 17% this year

Several factors will affect oil demand and cause supply constraints this summer.

DwV pointed out that high mortgage interest rates prevent potential buyers from entering the market during the peak home buying season, which indicates that Americans will spend more on entertainment and travel, so fuel demand is expected to rise. However, fuel production may fall short of expectations, as delays in refinery maintenance over the years may cause supply shortages. Texas also warned that this week's hot weather could lead to a power emergency, which is reminiscent of last year's record heat when refineries cut fuel production due to extreme heat.