By Jarrett Renshaw and Marianna Parraga
HOUSTON, March 23 (Reuters) – Global oil prices have not climbed enough to cause demand destruction, U.S. Energy Secretary Chris Wright said on Monday at the CERAWeek energy conference in Houston, Texas, even as markets continued to gyrate and global oil prices remained near $100 a barrel due to the U.S.-Israeli war on Iran.
The world is enduring one of the worst energy crises in decades following the closure of a key shipping channel and attacks on energy infrastructure in the Middle East that have caused long-term damage. Oil prices have climbed to multi-year highs and fuel prices in the U.S. are surging, creating potential trouble for President Donald Trump’s Republican Party ahead of the November midterm elections.
The Trump administration is taking steps to pacify markets, including releasing oil from the U.S. Strategic Petroleum Reserve in conjunction with other members of the International Energy Agency. Wright on Monday said the U.S. was going to release between a million and a million-and-a-half barrels per day of oil, eventually getting to 3 million bpd.
Abu Dhabi state oil giant ADNOC’s CEO Sultan Al Jaber, speaking shortly after Wright, said the rise in oil prices was slowing global economic growth and added that no country should be able to close the Strait of Hormuz. That chokepoint, which Iran has effectively shut, accounts for some 20% of the world’s oil consumption.
Asked whether a U.S. victory in Iran meant the country would no longer have control over the strait, Wright told CNBC in an interview on the sidelines of the conference: “We need to be in a position where their ability to threaten the Strait of Hormuz is either gone or dramatically reduced from where it’s been the last few years, the last several decades.”
Wright said Asia has been most intensely affected by the market shocks and supplying refineries there was a priority for the Trump administration.
“We want to get oil into Asian refineries and have as little refining downturn as possible,” he said.
Wright said Venezuela is “meaningfully better” than it was months ago, following the capture of President Nicolas Maduro in January and the U.S. takeover of the OPEC country’s oil exports, with some 200,000 bpd of crude output restored so far.
Following a trip to Caracas last month when he met interim President Delcy Rodriguez and visited oilfields, Wright said there will be an election in Venezuela “eventually,” without providing further details.
U.S. NUCLEAR POWER
The U.S. is on track to see three next-generation nuclear reactors producing heat – a precursor to delivering electricity to the grid – by July 4, Wright said.
Several so-called small modular reactors, and other forms of advanced nuclear, are in development in the country, but none are currently commercially operable.
Wright said new nuclear energy will be a critical supplier of electrons to the U.S. electrical grid, which is struggling to keep up with demand from data centers and the electrification of industries like transportation.
(Reporting by Jarrett Renshaw, Marianna Parraga, Nathan Crooks and Laila Kearney in Houston and Timothy Gardner in Washington, D.C.; Writing by Liz Hampton; Editing by Nia Williams)
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