As Gas Prices Surge, U.S. Eyes Oil Reserve Release: Chu

The United States is considering a release of oil from its strategic reserves in an attempt to stem the surging price of gasoline, Energy Secretary Steven Chu told reporters on Tuesday.

No final decision has been made on releasing oil from the U.S. Strategic Petroleum Reserve (SPR), Chu said, noting the reserves are intended to be used during times of oil supply disruptions.

The United States last tapped into its reserves in 2011 in coordination with other Western nations when Libya's oil production dropped because of war and prices surged, threatening the shaky global economy.

The Obama administration is now under pressure to release stocks again because tensions around Iran's nuclear program have propelled oil markets -- and the price of gasoline -- higher ahead of the 2012 presidential elections.

"We're very concerned about what's happening in Iran. So we're working with the IEA," Chu said outside a hearing on Capitol Hill, referring to the International Energy Agency.

The U.S. government is working with the IEA to monitor global oil supplies and demand "in our normal course of business," Energy Department spokeswoman Jen Stutsman clarified. "The Secretary was not implying that we are working specifically with the IEA on a potential release from the SPR."

The United States and other members of the IEA coordinated a release of a total of 60 million barrels of oil stocks last year in response to the Libyan disruption.

Asked whether the Obama administration would make its decision based on prices or supplies, Chu said "there are many factors" in deliberations.

"But remember that the fundamental reason why we have an SPR is to deal with an interruption in supply," he said.