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The high price of oil is pushing gasoline prices up as the Iran war continues to block traffic through the crucial Strait of Hormuz. The U.S. and other countries have been trying to make up for this missing oil, and there are lots of strategies. At least a half dozen of them are in play. But as NPR's Camila Domonoske reports, even pulling on all these levers just won't be enough to bring real relief at the pump.
CAMILA DOMONOSKE, BYLINE: Dagmawi Yacob (ph), who drives for Uber, was filling up at a gas station in Washington, D.C., this week.
(SOUNDBITE OF TRAFFIC)
DAGMAWI YACOB: It's too high. I'm getting gas every two or three days 'cause I can't fill up my gas. I'm looking for the cheapest gas station.
(SOUNDBITE OF HORN HONKING)
YACOB: Even then it doesn't feel like it's cheap at all.
DOMONOSKE: This week, the government pulled one lever to help with gas prices. The Trump administration is temporarily waiving the Jones Act. That law requires that ships traveling between U.S. ports need to be American made, American crude and sailing under the American flag. Putting it on hold makes it a little easier to move gasoline from where it's made to where it's needed. Bob McNally, the founder of the research firm Rapidan Energy, says sure, that'll help U.S. prices a little.
BOB MCNALLY: But we're talking, you know, slowing the ascent of pump prices by, you know, pennies or tenths of a penny. It's a good step, but it's not a game changer for the Strait of Hormuz problem we have.
DOMONOSKE: OK, so that's not a game changer. What other options does the world have? Well, for instance, when the world is suddenly short on oil, one obvious lever to pull would be to produce more of the stuff, right? Now, drilling new wells takes time - months at best. But members of the oil cartel OPEC, led by Saudi Arabia, often have wells lying around unused that they could turn on right away. Ellen Wald is the author of the book, "Saudi, Inc."
ELLEN WALD: It's production that's basically ready to go that they're just not using, mostly because OPEC has agreed that they're not going to produce that much.
DOMONOSKE: The problem is this spare capacity, it's in Saudi Arabia and the United Arab Emirates on the Persian Gulf. That oil would also be trapped on the wrong side of the Strait of Hormuz.
WALD: So spare capacity is only as good as the ability to get the oil out of where it's being produced.
DOMONOSKE: OK, so that lever is out. Here's another one. If your crude can't be shipped through the strait, OK, send it over land through pipelines. But they can only carry so much. Normally, about 20 million barrels a day passes through the strait. Experts guess about 5 million barrels are getting around it. If you're doing the math, that is still a 15-million-barrel hole.
The next lever is to tap into the oil stockpiles that countries like the U.S. have built up in case of emergency. And that is happening, too. Last week, the 32 countries that belonged to the International Energy Agency agreed to open those spigots. Bob McNally again.
MCNALLY: Indeed, we saw the largest-ever announced release from those reserves. That's a good thing. But they will not solve the brutal math problem.
DOMONOSKE: Reserves can only be tapped so fast. Maybe the world can manage 2 million barrels a day, McNally says. That's a lot smaller than 15 million. There are some other levers being pulled too, like lifting U.S. sanctions on oil from Russia and maybe even Iran. But none of these levers are a game changer, not even all of them together. Dan Pickering is the chief investment officer with Pickering Energy Partners.
DAN PICKERING: Fifteen million barrels a day isn't easy to offset anywhere. That's the total production of the United States and we're the biggest producer in the world. There is no easy fix.
DOMONOSKE: If this problem is so hard to solve, why aren't oil and gasoline prices even higher than they are today? Well, simply put, it's because traders continue to hope that the conflict will be over soon. As Bob McNally puts it...
MCNALLY: There is a reservoir of hope and confidence that the U.S. just simply won't permit this to go on much longer.
DOMONOSKE: But he notes that reservoir of hope is being drained. Camila Domonoske, NPR News.
CHANG: And NPR's Ava Berger contributed to this report. Transcript provided by NPR, Copyright NPR.
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