Geithner: We can tap oil reserves if we need them

By Jennifer Liberto, senior writer


WASHINGTON (CNNMoney.com) -- Treasury Secretary Tim Geithner told lawmakers Thursday that the U.S. and other nations are prepared to tap back-up oil reserves if Libya unrest continues and severely disrupts oil supplies.

Libya is the first oil exporting nation to be engulfed in the political upheaval spreading across North Africa and the Middle East, and investors have been worried that chaos in the region will drive crude prices even higher.

Price spikes have followed increasingly violent protests in Libya that have claimed more than 1,000 lives, according to the United Nations. Libya's ambassador to the United States has estimated the death toll at 2,000.

Geithner said Treasury is monitoring oil prices and a potential supply disruption and is prepared to act.

"It's important to note that there is considerable spare oil production capacity globally, and we and other major economies possess substantial strategic reserves of oil," he said in prepared remarks. "If necessary, those reserves could be mobilized to help mitigate the effect of a severe, sustained supply disruption."

The Treasury secretary reassured lawmakers that underlying inflation remains low nationwide. And he said the U.S. has "considerable spare oil production capacity" it could consider tapping in the event of a "major" supply disruption.

When asked how long Americans can expect prolonged oil price hikes and whether longer-term hikes would slow economic growth, Geithner said that was "not something we can know for certain today."

"Most investors regard this as a temporary increase and expect prices to come down gradually over the rest of this year," he said. "That would give us more confidence, if that was right, that it will have modest effects on growth and inflation."

Geithner also talked about U.S. sanctions against Libya. He said that federal officials have frozen $32 billion in assets under U.S. control, up from $30 billion last week. It's the largest amount of frozen assets of any U.S. sanctions programs so far. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,103.94 5.49 0.03%
Nasdaq 4,595.38 15.11 0.33%
S&P 500 2,004.77 1.40 0.07%
Treasuries 2.41 0.07 2.86%
Data as of 10:56am ET
Company Price Change % Change
Apple Inc 103.58 1.08 1.05%
Bank of America Corp... 16.14 0.05 0.31%
Staples Inc 12.44 0.77 6.55%
Facebook Inc 75.73 0.91 1.22%
General Electric Co 26.00 0.02 0.06%
Data as of 10:41am ET

Sections

Online flower peddler is buying fruit gift basket retailers for $142.5 million. More

Gas prices are falling to nearly $3 a gallon in some parts of South Carolina, and that will soon be common in much of the country. More

Microsoft is expected to begin showing off Windows 9's features later this month. Here are the expected changes you should be thrilled about. More

The Coolest Cooler is the most successful Kickstarter campaign in the site's history, raising $13.3 million from over 62,000 backers. More

A scam where fraudsters impersonate IRS agents has now stolen $5 million from taxpayers, and this woman - who lost her entire life savings -- is just one of its victims. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.