The United States and other major economies can tap strategic oil reserves if need be to keep soaring oil prices from derailing a global recovery, Treasury Secretary Timothy Geithner said Thursday.

Testifying before the Senate Foreign Relations Committee, Geithner played down risks that political unrest in the Middle East was a major threat and said there was a lot of spare oil production capacity in addition to reserves.

If necessary, those reserves could be mobilized to help mitigate the effect of a severe, sustained supply disruption, he said.

Geithner said the Obama administration was monitoring Middle East developments closely and acknowledged that rising commodity prices -- for both food and oil -- were causing hardship in many parts of the world by pushing prices up.

But he said Americans were feeling less impact.

In the United States, rising gasoline prices have left consumers with less money to spend, but underlying inflation across all goods and services is modest, Geithner said.

In wide-ranging remarks, he said European leaders need to make absolutely clear that markets know they will take whatever actions are necessary to help countries most affected by a debt crisis work their way out of it.

Geithner didn't name any countries but Greece and Ireland are among those struggling to get their fiscal affairs in order and to deal with crisis conditions.

He repeated a call for global agreement on stronger norms for exchange rate policies to ensure that some countries don't use an artificially low currency rate to benefit their own economies at the expense of other nations.

There is broad consensus that the major economies -- not just Europe, Japan and the United States, but also the large emerging economies -- need to allow their exchange rates to adjust in response to market forces, Geithner said.

He said China's yuan currency remains substantially undervalued and said there has been limited progress in getting Beijing to let it rise in value more rapidly.

(Reporting by Glenn Somerville, editing by Andrea Ricci)