U.S. energy secretary urges refiners not to increase fuel exports

U.S. Secretary of Vitality Jennifer Granholm speaks throughout a briefing in regards to the bipartisan infrastructure regulation on the White Home in Washington, U.S., Could 16, 2022. REUTERS/Elizabeth Frantz/File Picture

WASHINGTON, Aug 27 (Reuters) – The U.S. Vitality Secretary urged home oil refiners this month to not additional improve exports of fuels like gasoline and diesel, including that the Biden administration might have to contemplate taking motion if the crops don’t construct inventories.

U.S. refiners have boosted oil product exports this month as home crude oil manufacturing rose and international gas demand continued to get better.

Vitality Secretary Jennifer Granholm, in a letter despatched Aug. 18, urged seven refiners together with Valero (VLO.N), ExxonMobil (XOM.N) and Chevron (CVX.N), to construct provides of fuels as the US enters peak hurricane season.

“Given the historic degree of U.S. refined product exports, I once more urge you to focus within the close to time period on constructing inventories in the US, quite than promoting down present shares and additional growing exports,” Granholm stated within the letter despatched to refiners, a duplicate of which was seen by Reuters.

Excessive U.S. oil product exports have been a priority for the administration of President Joe Biden this summer season as gasoline costs briefly hit a document of $5 a gallon, serving to drive inflation to 40-year highs. Gasoline costs have since fallen to about $3.86 per gallon.

Federal climate forecasters have projected an above-average Atlantic hurricane season, which could be a perilous time for refineries. Nonetheless-high gasoline costs stay a risk to Biden’s fellow Democrats forward of the Nov. 8 midterm elections, after they hope to retain management of each chambers of Congress.

Granholm stated the administration is speaking with state officers alongside the East Coast, the place gasoline ranges are at their lowest in practically a decade. It’s placing the gasoline and heating oil reserves within the U.S. Northeast, which maintain 2 million barrels of gas, on “lively standby” for potential launch, and getting ready different emergency contingency actions, she stated.

The administration hopes that corporations will “proactively deal with this want” of constructing inventories, she stated. If that doesn’t occur, the administration “might want to think about further federal necessities or different emergency measures,” Granholm added, with out offering particulars.

In a wide-ranging assembly with the identical refiners in June, Granholm backed off a plan to ban U.S. gas exports, however the thought has by no means totally left the desk.

Refiners have stated a ban may swamp home markets with gas and trigger some crops to chop output, which may lower provide and put upward strain on costs.

As well as, Northeast refiners import crude and fuels, commerce that could possibly be affected by an export ban.

“The export discuss is at greatest a distraction; at worst, counterproductive to cost and provide,” stated a supply conversant in Granholm’s talks with refiners.

Reporting by Timothy Gardner
Enhancing by Invoice Berkrot

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