Exxon Mobil execs will visit the White House next week to meet with President Trump as the administration considers a plan to tap into America’s oil reserves to stabilize prices.
The Energy Department is expected to send a recommendation to Trump for a policy that would allow the administration to tap oil stockpiles to provide relief to drivers.
The Energy Department is awaiting the outcome of a rulemaking process and then will act on the recommendation, a senior administration official told CNN. The official did not say how much oil reserves could be tapped.
The move could be historic because the Trump administration would be taking a historic step that has never been done before.
The use of gasoline has been on the rise due to rising crude oil costs and falling production from the U.S. during recent months.
Thanks to the mandated use of biofuels, blending the biofuels and gasoline has become more difficult. The biofuels helped drop the price of gasoline below $1 per gallon in 2015 for the first time in nearly a decade.
But after three consecutive years of ethanol mandates, prices climbed during the winter. Drivers have seen the cost for fuel climb since as high as $2 per gallon, according to GasBuddy.
Trump could take action at any time but given the high market volatility that has contributed to volatility in oil prices and gasoline prices, the administration may act after the International Energy Agency releases its report next week.
The announcement that oil will be released in the international markets is likely to shock the market and send prices surging because the release will be so big, analysts said.
The White House’s decision on whether to use the reserves is expected in the coming weeks.
The reserves were established after oil prices spiked in 1973 and the Strategic Petroleum Reserve was created to stave off future price spikes.
The level of stockpiles isn’t large enough to provide price relief immediately.
The nonpartisan Congressional Research Service estimated the production and consumption of oil would have to rise in the U.S. for one to two months in order for the reserves to have an impact on prices.
The U.S. has 112 million barrels of oil stored at 39 sites, a level that has been maintained since early 2009.
The Obama administration sought to increase the amount of oil held in the reserves by drawing down stocks as part of its market intervention efforts.
But a proposal to sell half a million barrels in 2008 and more in 2009 was blocked by Congress after concerns were raised about drawing down reserves after Hurricane Katrina and concerns about price spikes stemming from a general increase in prices.
However, previous Republican administrations including George W. Bush and Barack Obama approved tapping reserves from time to time.
CNN’s Kyung Lah contributed to this report.