U.S. to release oil from reserves

By Sridhar Krishnaswami

WASHINGTON, SEPT. 23. A day after the Vice-President and Democratic nominee, Mr. Albert Gore, called for the release of oil from the Strategic Reserves, the Clinton administration moved in that direction saying that about 5 per cent, or 30 million barrels, would be made available in the market. The Bush campaign has alleged that it was politics and not policy that prompted the decision.

``This is not political. The President wants to help the American people get home heating oil,'' the Energy Secretary, Mr. Bill Richardson said. Mr. Richardson is said to have been one of the officials to have argued for flooding the market with oil from the Strategic Reserves so as to bring down the prices.

Others like the Treasury Secretary, Mr. Lawrence Summers, had apparently argued against the idea saying it would have a marginal impact on the prices. Mr. Summers has since changed his position and backed the Vice President's call. Unnamed senior administration officials have been quoted as saying that while the final decision was taken by the President, Mr. Bill Clinton, it was not as though the Vice-President or some of his top aides had nothing to do with the move.

The administration's move to release oil from the Strategic Reserves is primarily intended to keep people living in the North East or the New England States from paying higher prices for heating oil.

Administration officials are being cautious on the decision. A point has been made in the last two days that the administration was not ``selling'' oil from the reserves, rather it is being ``exchanged'' for oil in the future.

At a time when the Vice-President was lashing out at the oil industry and its supporters for the rising prices, the Bush campaign, led by the Texas Governor, wasted no time in criticising the decision to dip into the Strategic Petroleum Reserves saying the Vice-President last winter had opposed the idea of using the reserves to offset price rises. ``I believe the Vice-President has made this decision with the support of the President for short-term political gains,'' Mr. Bush said.

The Clinton administration may be trying to make the point that its decision had nothing to do with politics, but not many seem to be taking this at its face value. Newspaper reports here say that prior to making a public call for leaning on the Strategic Reserves, Mr. Gore had called the President to inform him that he was going to make a campaign speech to this effect. Electorally, the East Coast is critical for the Democrats and the Vice- President appears to have a solid lock in the area.

Prices fall

Reuters reports from London:

Oil prices slumped as U.S. Energy Secretary, Mr. Bill Richardson, prepared to announce plans to release 30 million barrels of crude oil over 30 days from government reserves.

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