The future of the nation’s strategic oil reserve and Iran sanctions will come into stark focus on Tuesday at a rare Senate Energy Committee hearing on oil prices, according to aides.
The Energy and Natural Resources Committee hearing comes as President Trump and Iran have sparred on Twitter on the ramifications of applying oil sanctions, while recent reports show Trump is considering tapping the Strategic Petroleum Reserve to keep gasoline prices low going into the midterm elections.
“The purpose of the hearing is to examine factors that are impacting global oil prices,” the official hearing notice reads, providing little else in the way of details.
Gasoline prices are more than 50 cents higher than where they were a year ago, marking a continuing increase in fuel prices as OPEC has curtailed its production to drive up the price of oil, a key determinant in the price of gasoline at the pump.
Broadly, the hearing will examine the causes of recent volatility in global oil prices, particularly supply, demand, inventories, and geopolitical forces, according to a congressional source. OPEC, strong economic growth, growing demand, and supply outages are all to blame for higher prices this year, the source said.
Although the oil cartel and Russia have reversed that track in recent weeks by agreeing to increase production, governments continue to voice concern that oil supplies remain very tight. That could raise oil prices in the coming months, according to the Energy Information Administration, especially as the U.S. levels sanctions against Iranian oil.
These issues and more are expected to come up during the hearing, according to aides, which will feature a panel of analyst and experts, including the director of markets and security for the International Energy Agency, Keisuke Sadamori.
The international agency, of which the U.S. is a member, recently warned about the risk of a tighter oil market raising prices due to a lack of countries’ spare oil reserves, as well as losses from Iran and other OPEC members like Venezuela.
“Potential losses from Venezuela and Iran could require others to produce more,” the agency said earlier this month. The monthly oil report warned of an emerging “supply gap” without significant increases in output from OPEC producers.
Other experts at Tuesday’s Senate hearing include John Auers, executive vice president at Turner, Mason & Company, along with Robert McNally of the Rapidian Energy Group.
Jason Bordoff, founder of Columbia University’s Center on Global Energy Policy, will also be testifying before the energy committee. In a recent essay in Foreign Policy, Bordoff reflected on his visit last month to Vienna to observe the meeting between OPEC and Russia on increasing production.
“The decision … to provide oil price relief, reflecting newfound oil policy partnership between Saudi Arabia and Russia, marks a potential turning point in the global oil order and a reminder that despite the [U.S.] shale boom or a possible energy transition, oil geopolitics is alive and well,” he wrote.
The hearing will examine how U.S. shale oil production has somewhat restrained prices and insulated the U.S. economy, say aides. However, the past two decades have been characterized by significant changes in oil prices, oil supply, oil demand, and global inventories, so the hearing will allow the committee to put everything happening on a global scale into context, the sources said.
E. Russell Braziel, CEO of the market analytics firm RBN Energy, will also be testifying before the panel. Braziel was recently appointed to serve on the National Petroleum Council, a federal advisory board, by Energy Secretary Rick Perry.
“The challenges facing today’s energy markets have never been greater, and I look forward to collaborating with other NPC members to address the important issues facing our industry,” Braziel said.
