Commodities NewsNews

Trump is reportedly thinking about making a rare move to try and lower gas prices

but history shows it might actually make things worse

Trump is reportedly thinking about making a rare move to try and lower gas prices

President Donald Trump is reportedly considering tapping emergency oil reserves ahead of the November midterm elections.
But some analysts doubt a release would be effective.
They see it as a way to shift the conversation away from Trump’s decision to withdraw the US from the Iran deal.
As the Trump administration reportedly considers turning to emergency oil reserves, some experts see it as more of a distraction from foreign policy decisions that have faced blame for rising gas prices than a meaningful effort to address supply concerns in the energy market
The federal stockpile under consideration, called the Strategic Petroleum Reserve, is mainly intended to be a safety net the US can turn to during war or natural disaster. But non-emergency releases can be authorized by the president.
“The reason [Trump] brought up an SPR release is because he wants to change the conversation,” Helima Croft, head of global commodities research at RBC, told Business Insider.

Through his tweets, Trump has appeared increasingly anxious about oil prices ahead of the November midterm elections. A favorite of his to fault is OPEC, which in 2016 struck a deal to coordinate output cuts amid a global oil glut.

“The OPEC Monopoly must remember that gas prices are up & they are doing little to help,” he wrote on Twitter earlier this month. “If anything, they are driving prices higher as the United States defends many of their members for very little $’s.”

But Democrats have been quick blame gas prices — which recently hit four-year highs — on the president’s decision to withdraw the US from the Iran deal, a 2015 agreement that lifts sanctions on the country in exchange for restraints on its nuclear weapons program. As part of that move, the State Department last month ordered all countries to cut off all Iranian barrels by November.

“According to energy analysts and experts, President Trump’s reckless decision to pull out of the Iran deal has led to higher oil prices,” Senate Minority Leader Chuck Schumer said at a press conference outside an Exxon facility in May. “These higher oil prices are translating directly to soaring gas prices, something we know disproportionately hurts middle- and lower-income people.”

To be sure, there is a multitude of other factors that drive oil prices. But analysts see cutting off barrels from Iran, the third-largest member of the Organization of Petroleum Exporting Countries, at the top of the list. The country exported about 2.7 million barrels per day in June.

Prior to the Iran deal, the Obama administration asked companies to reduce oil purchases from the Islamic Republic by about 20% every 180 days. But that is a stark contrast to the Trump administration’s intentions of cutting off all Iranian barrel…

This news has been published originally on Business Insider .

You can read the full article: 

Show More

Related Articles

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.