Gas prices have hit record highs but don't expect Biden to lower them: 'They already used their biggest bullet'

The cost of gas is going up across the US, but drivers shouldn't expect any action from the administration of President Joe Biden to bring down the price at the pump.

The White House is staring down a global energy crunch sparked by Russia's invasion of Ukraine as well as domestic supply strains across energy commodities.

There are few tools the US administration has because the biggest drivers for gasoline prices are driven by global fundamentals, according to Matt Smith, lead oil analyst, Americas at Kpler.

Gas prices have gone past records in recent weeks. The average price of a gallon of gas in the US hit $4.799 on Friday, roughly 50% higher than a year ago.

Supply was tight before the war in Ukraine.

US inventories were low compared to historical benchmarks for crude, gas and diesel before February.

At the end of March, President Biden ordered the release of 1 million barrels a day from the Strategic Petroleum Reserves to compensate for the loss of Russian supply.

The price of gas at the pump comes from the cost of crude in global markets, but the additional release of barrels, or even increases in US production, would only add to that drop.

According to Smith, there is little else Biden can do.

Smith said that the strategic petroleum release was the best way to keep prices down.

The White House reached out to the oil industry to inquire about firing up shuttered refineries in order to bring down prices. Smith said there was a meager chance that it would come to fruition.

He said that companies had already assessed the cost of restarting and running the refineries and that there was little the US administration could do to change that.

The US Energy Secretary said Tuesday that Biden has not ruled out using export restrictions to ease fuel costs. She told CNN that the President is obsessed with lowering prices.

Oil producers don't like potential curbs.

Frank Macchiarola of the American Petroleum Institute said that restricting US energy exports would only cause more instability in the marketplace and diminish American energy leadership.

Ethanol and a tax holiday

Smith said that the government has two more levers it could use to bring prices down.

The US Environmental Protection Agency granted an emergency waiver for higher-ethanol gasoline blends. This temporarily allows more gasoline to enter the market and expands the available volume of fuel, but Biden could move to allow the blend for the duration of the summer, and also lift anti-smog regulations.

It makes it cheaper, but it creates smog.

The governor of Georgia has already suspended the state's 29.1 cents-a-gallon motor fuel tax in order to implement a federal tax holiday on gasoline for the summer.

Smith said that a tax holiday would not cause a significant drop in prices because of the low energy inventories.

Even though they've given it their best shot, Biden can't really control global oil prices. It may be difficult.