US gas price rises are pushing the White House to explore a ban on US exports as midterms get close, report says




  • In Politics
  • 2022-10-05 13:46:02Z
  • By Business Insider
US President Joe Biden at a Cabinet Meeting at the White House.Kevin Dietsch / Getty Images
US President Joe Biden at a Cabinet Meeting at the White House.Kevin Dietsch / Getty Images  
  • The White House is eyeing a ban on exports of US gas to bring down rising prices at the pump.

  • Biden has faced off with the oil industry over high gas prices, a key focus for his administration.

  • The move comes with midterm elections just five weeks away, as oil leaders resist Biden's urging.

As US gas prices tick higher, the White House has reportedly asked the Energy Department to look into whether a ban on exports of gasoline would pull down costs at the pump for American drivers.

The move is a sign the idea of a ban is gaining support in the Biden administration, in the face of fervent opposition from the oil industry, Bloomberg reported Tuesday, citing a person familiar with the matter.

The measure would cover US exports of diesel and other refined petroleum products, as well as gas, the report said.

There have been heated discussions between White House officials and oil industry bosses over the need to lower gas prices, according to Bloomberg. Last week, President Joe Biden slammed energy giants and gas stations for raking in hefty profits and called on them to cut gas prices immediately.

The issue is a hot one for his administration with the November 8 US midterm elections only five weeks away. Biden has focused on keeping a lid on gas prices, which have contributed to near 40-year high inflation in the US economy.

US gas prices hit a record high above $5 a gallon in June, as oil prices soared thanks to Russia's war with Ukraine and an energy crisis in Europe. They dropped gradually after that in line with falling oil prices, as the Biden administration started releasing record amounts of crude from the US's Strategic Petroleum Reserve.

But in late September, the US average gas price began rising again for the first time in 99 days. It stands at $3.831 as of Wednesday, according to AAA data.

By comparison, US benchmark WTI crude futures have shed about 12% in the past three months, though they are trending higher off a low hit in late September. The international benchmark Brent crude futures have fallen over 8% in the same timeframe, also rising recently.

With an export ban in place, gas prices could then fall as the move would protect domestic supply. But oil industry trade groups have criticised the move, warning it could disrupt global energy markets in a Tuesday letter to Energy Secretary Jennifer Granholm.

"Banning or limiting the export of refined products would likely decrease inventory levels, reduce domestic refining capacity, put upward pressure on consumer fuel prices and alienate US allies during a time of war," the heads of the American Petroleum Institute and American Fuel & Petrochemical Manufacturers wrote.

Meanwhile, the Biden administration is also scrambling to persuade OPEC and its allies not to make deep cuts to their oil output targets at a meeting Wednesday. Reduced supply to the oil market would likely drive up prices, which could then feed into higher prices for US gas.

Crude prices could hit $100 a barrel if OPEC+ cuts production as expected, Kpler energy analyst Viktor Katona told Insider Monday.

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    (2022-10-23 14:09:42Z)

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