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U.S. not ready for oil shock, Lugar says

March 21, 2012 at 8:19 AM   |   Comments

WASHINGTON, March 21 (UPI) -- The White House is called on to take action to ensure the United States can handle any potential oil supply disruption, a U.S. Senate leader said.

Crude oil prices on the global market are rising in part because of tensions with Iran, one of the top oil-producing countries among members of the Organization of the Petroleum Exporting Countries.

U.S. Sen. Dick Lugar, R-Ind., ranking member of the Senate Foreign Relations Committee, said oil markets are in "a precarious position" because of sanctions on Iran's oil sector.

Saudi Arabia has given assurances that it could increase oil production to offset market concerns but Lugar said "going hat-in-hand to Riyadh" isn't good policy.

"Emergency planning must not wait for the emergency to arrive," he said in a statement.

Erik Milito, upstream and industry operations director for the American Petroleum Institute, said more domestic oil and natural gas production would provide some cushion to overseas tensions.

"This would strengthen our energy security and help put downward pressure on prices while also providing many thousands of new jobs for Americans and billions of dollars in additional revenue for our government," he said in a statement.

U.S. President Barack Obama starts a tour of western U.S. states Wednesday meant to advocate his "all-of-the-above" domestic energy policy.

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