Lowering oil prices will require a long-term approach to exploration and production, though tapping domestic reserves is not out of the question, Treasury Secretary Timothy Geithner told CNBC.
Geithner attributed the rise in crude prices, which have sent gasoline above $4 a gallon in some parts of the country to two factors: Better growth expectations, along with "saber rattling" from Iran over its desire to advance its nuclear program.
Getting gas prices under control this year is critical for President Obama as he prepares for a contentious re-election campaign ahead.
"There's no quick fix to this, no short-term fix," Geithner said. "The best strategy for the country is to continue to make some long-term investments, to expand production in the United States, to reduce our dependence on foreign oil, to encourage Americans to use more efficient clean sources of energy, to encourage Americans to be more efficient in how they use energy."
At the same time, Geithner would not rule out tapping some of the U.S. strategic petroleum reserve to help bring down oil, which has surged past $105 a barrel.
"There's a case for the use of the (reserves) in some circumstances and we'll continue to look at that and evaluate that carefully," he said.
Rising oil prices are considered one of two key elements that could derail the U.S. economic recovery.
The other is Europe, where a sovereign debt crisis has played havoc with markets during the past year over concerns that troubles in Greece, Portugal and elsewhere could spread through Europe and ultimately make their way to the U.S. banking system.
Geithner repeatedly mentioned a "firewall" that will be necessary from the affected European governments. If the firewall is strong enough to prevent contamination, the U.S. will lend its support to the International Monetary Fund in an effort to help guide Europe, he said.
"Europe has made a lot of progress...that they are doing to do what is necessary to reduce the risk of a catastrophic failure in Europe," he said. "They've got some more work do, of course. The critical next step for them...is to build a stronger firewall that helps support the broader reforms that are necessary for growth over the long run."
Closer to home, the administration is grappling with ways to close a likely $1.3 trillion budget deficit and a national debt zooming towards $16 trillion.
Geithner asserted that the White House has proposals that cut at least $3 trillion from the debt and are targeted at addressing the housing sector, which remains the biggest drag on U.S. economic growth.
As such, he turned the onus on Congress to approve the administration's proposals.
"If Congress were to enact those proposals then it would put us much closer to a sustainable fiscal position for the next decade, and that would make broader confidence in the American economy stronger," Geithner said.
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