US Vice-President Dick Cheney said yesterday the nation's Strategic Petroleum Reserve should be used to offset major oil supply disruptions and not to try to rein in soaring crude prices.
In an interview on CNBC, Cheney said the role of the emergency stockpile is "to deal with an interruption of supply" and not "to try to manage prices."
Cheney said if there is any unrest in the Middle East that disrupts oil supplies, the US could use its oil reserve in response.
"Our reliance on foreign sources of energy creates a certain vulnerability. The best short-term response we have to do is the Strategic Petroleum Reserve," he told CNBC's Larry Kudlow.
The stockpile, created by Congress after the 1973-1974 Arab oil embargo, now holds 694 million barrels of crude at four underground storage sites in Texas and Louisiana.
Cheney would not say whether the Bush administration's new sanctions on Iran could make it difficult for the Mideast country to export oil. "They do sell oil into the international market. It's an important consideration, but from our perspective, it's very important that if you're going to do business with Iran, you're going to have problems doing business in the US," he said.
Separately, Cheney refused to say how high oil prices would have to rise before the US was pushed into a recession.
"I couldn't forecast the break-even point on that," Cheney said. "So I'm not here today to forecast that we're going to have an oil-driven recession."
Cheney said the US economy "has been amazingly resilient" to high oil prices, which on Friday traded at a record $92.22 barrel at the New York Mercantile Exchange.
"Certainly there's been a major increase in oil prices and the economy has adapted to it and adjusted very well," he said. ( Gulf )