High fuel prices have been “a substantial burden on American households,” U.S. Treasury Secretary Janet Yellen said. A fuel tax holiday that temporarily eliminates such taxes, “while not perfect, it is something that should be under consideration.”
Russia, for example, could retaliate by holding oil from the market. That could immediately drive prices higher as the world’s oil producers have very little spare capacity after years of underinvestment in oil fields and refineries.
Despite its ban, the EU remained the main destination for Russian oil exports last month, making up 43% of Russian flows followed by just over a quarter to China.
At its last meeting on June 2, OPEC+ brought forward oil production rises to offset Russian losses and smooth the way for a visit to Saudi Arabia by U.S. President Joe Biden.
The U.S. has banned imports of Russian fossil fuels but Washington has allowed bank transactions on Russian oil and gas sent to European countries to continue.
The SPR release was meant to help control oil prices that spiked after Russia invaded Ukraine. However, oil prices have marched higher since the March 31 announcement.
But a windfall tax would kill the incentive to drill more, said oil executives, and take away some of the earnings that fund new technology advances that led to the U.S. shale revolution.
The 20-year plan between Iran and Venezuela includes cooperation in the fields of oil, petrochemicals, defense, agriculture, tourism and culture plus the repair of Venezuelan refineries and the export of technical and engineering services.
The U.S. solar industry sees the positive from Biden’s tariff pause but wonders what’s around the corner.
Analysts and diplomats say the oil shutdown has been largely instigated by the main factions in eastern Libya including commander Khalifa Haftar and his Libyan National Army.