The United States may be exporting crude oil released from the strategic petroleum reserve in a bid by the federal government to lower prices at the pump.
This is according to a report by ZeroHedge, citing information from Bloomberg that the author of this article could not locate on Bloomberg’s website.
According to the information, tanker tracking data showed that at least one tanker, the Advantage Spring Suezmax, received light, sweet U.S. crude from the SPR at the start of April and is currently en route to Rotterdam, the Netherlands.
If the information is confirmed, it would not be the first instance of the U.S. exporting oil supposedly released to alleviate tight supply on the local market. A Bloomberg report from November last year noted that in the previous month, exports of SPR crude released to tame prices had hit a record high of some 1.6 million barrels.
“Given the ongoing pace of the current SPR release -- 12 million barrels in the last two months and the biggest weekly release so far last week at 3.1 million barrels -- it’s fair to assume more SPR barrels are going to leave U.S. shores in the weeks ahead,” said Matt Smith, an oil analyst from Kpler.
If the new information is confirmed, the Biden administration’s decision to release a record 180 million barrels from the strategic reserve over six months might well blow up in its face.
The White House announced the release plan at the beginning of the month, and oil prices reacted accordingly, with WTI slipping below $100. However, the drop was only temporary, and by this week, WTI had recouped its losses.
Meanwhile, the national average price per gallon of regular gasoline remains above $4. The national average is slightly lower than the $4.274 price per gallon of regular a month ago but significantly higher than the $2.87 per gallon that drivers paid on average a year ago.
By Charles Kennedy for Oilprice.com
ADVERTISEMENT
More Top Reads From Oilprice.com:
- U.S. Natural Gas Prices To Spike As Exports Boom
- Mid-Cap Energy Stocks Are Outperforming Supermajors
- The Odds Of A Nuclear Deal With Iran Are Shrinking Every Day
Moreover, their impact on global prices will be short-lived and negligible. The reason is that the global oil market has already factored them in the minute they were announced. Another reason is that the market knows that they will have to be eventually replaced.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London