House Democrat prods Obama 
to tap oil reserves

Rep. Chris Van Hollen (D-Md.) on Thursday called on President Obama to release oil from the Strategic Petroleum Reserve (SPR) in order to limit Iran's ability to manipulate oil prices by taking "aggressive actions," such as recent missile tests.

"As you know, yesterday Iran test-fired several ballistic missiles, including some that could strike Israel or U.S. bases in the region," Van Hollen wrote. "These actions, coupled with Iranian threats to close the Strait of Hormuz, have already contributed to a spike in crude oil prices."

Van Hollen noted that the United States and the European Union imposed an embargo on the purchase of Iranian oil, which could also reduce oil supplies and lead to increased prices.

"The Iranians know they can exploit this uncertainty by taking actions — like their recent missile test — to further roil the oil markets and weaken already fragile Western economies," Van Hollen wrote. "We can deprive the Iranians of using the price of oil as a political weapon by making clear that we are prepared to counter Iranian action with releases from the SPR."

He also said releasing some oil in the SPR would "preempt a rise in oil prices based on fears and speculation about any conflict in the Gulf."

Van Hollen did not suggest how much oil to release, but said that under current law, a limited drawdown is allowed in the event of circumstances that could lead to a domestic or international oil shortage.

"There is no doubt that an effective embargo of Iranian oil, coupled with ongoing threats from Iran, could result in an international supply shortage, and that the release of oil from the SPR could assist directly or significantly prevent the adverse economic impacts of such a shortage," he wrote.

In June, the Republican-led House approved a bill that would require the government to expand domestic oil leasing in the event that it decides to draw down oil from the SPR.

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