Even though oil prices are bound to jump after the US re-imposes sanctions on Iran, Washington won’t tap its own oil reserves as the country is confident that increased production from Saudi Arabia and Russia will meet the supply gap, Energy Secretary Rick Perry said.
"The Strategic Petroleum Reserve is in place for emergency natural disasters. So I would not recommend [tapping it], and I don't think the president would either," Perry was quoted by Platts energy news services as telling reporters at the World Gas Conference in Washington on Thursday.
"We look at this as an opportunity for OPEC members to fill this gap, if you will," he added.
S&P Global Platts Analytics expects a loss of more than one million barrels a day by November if the US manages to force buyers of Iranian crude to wind down their imports.
According to Bank of America Merrill Lynch experts, disruption to oil supplies from Iran as a result of US sanctions could see crude prices soar to around $90 a barrel.
Oil prices spiked this week after Washington said it would offer no extensions or waivers to Iran's oil buyers when sanctions return in November.
The re-imposition of sanctions on Iran, which US President Donald Trump threatened in May, includes a universal ban on Iran buying or acquiring US dollars as well as restrictions over purchases of crude oil from the country and investing in its oil projects.
Iran’s Oil Minister Bijan Namdar Zaganeh said on Friday that the US could not have imposed sanctions on the country’s oil sector if Iranian crude exports had reached 4 million barrels a day.
He added that in this case “a disruption in Iranian oil supplies would be too painful for the Americans."
According to the Iranian Oil Ministry, the country is currently exporting 2.5 million barrels of oil a day.