WASHINGTON, March 28: The US could use its large Strategic Petroleum Reserve to counter a short-term disruption in Middle East Gulf oil shipments caused by tensions with Iran, the head of the US Energy Information Administration said on Wednesday.

“We have substantial emergency supplies” of oil to offset problems in Gulf shipping,” EIA's Guy Caruso told reporters.

Oil prices shot up this week as traders worried that a dispute the West has with Iran's nuclear programme and Iran's continued holding of UK Royal Navy personnel could escalate and result in disruptions to shipping through the Strait of Hormuz, which handles about a third of the world's seaborne oil shipments.

“There is no need to panic” among oil traders over possible Gulf oil shipping disruptions, Caruso said.

The US emergency oil stockpile, which was created by Congress in 1975 in response to the Arab oil embargo, holds about 689 million barrels of crude at four storage sites in Texas and Louisiana.

About 4 million barrels of oil a day can be taken out of the emergency reserve, double the average 2 million barrels of crude a day that is bound for the US market from the Gulf, Caruso said.

Separately, Caruso said he expects more US refineries will come back online in the weeks ahead and draw down crude oil inventories as they ramp up gasoline production for the busy spring driving season.—Reuters