Sen. Ruben Gallego (D-Ariz.) is pressing the Energy Department for details on its approach to using the Strategic Petroleum Reserve (SPR) to mitigate the situation.
Gallego has written to Energy Secretary Chris Wright, concerned that the SPR release may not benefit all Americans equally, noting a lack of transparency and “No detail” provided about where the fuel will go and how it will be allocated. The letter not only seeks clarification on the impact of the SPR initiative on gas prices and supply in Arizona, but also questions the planning process as fuel prices continue to rise.
Gallego, a potential Democratic presidential candidate for 2028, mentioned April 6 as the deadline for providing the answers.
Congress Raises Alarm Over Energy Impact
The letter reflects the increasing worry in Congress about the energy repercussions of the Iran war.
At 4:17 AM ET, WTI crude oil was trading 3.12% lower at $93.87 per barrel. Meanwhile, the national gas prices stood at $3.79 per gallon while diesel prices crossed $5 per gallon, as per the Energy Information Administration (EIA).
On Friday, the Energy Department announced plans to release 172 million barrels from its SPR in phases as part of a broader 400 million-barrel effort by IEA countries, using an exchange system where companies must return the oil with extra barrels as a “premium,” with an initial proposal issued for 86 million barrels.
The department said the move will boost the SPR while helping stabilize markets at no cost to taxpayers.
Meanwhile, Chris Wright said gas prices could decline by summer, expressing optimism that they may drop below $3 per gallon.
Oil Rally Fuels Recession Fears Worldwide
The global oil market has been under strain due to the ongoing Iran war, with JPMorgan estimating that the strategic oil reserve release will only slightly alleviate the crude oil supply shock. According to their estimates, a coordinated release from the G7’s SPR would yield approximately 1.2 million barrels of oil daily.
Furthermore, the rising oil prices, which broke above $100 a barrel this month for the first time since 2022, have sparked fears of a potential recession. Fidelity Investments suggests that a full-blown recession could occur if oil prices reach $135 a barrel.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
Image via Shutterstock
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