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Why Is The U.S. Sending Its Emergency Oil Reserves To China?

  • The United States is exporting millions of barrels of oil from its emergency oil reserves to Europe and Asia.
  • "The SPR remains a critical energy security tool to address global crude oil supply disruptions," a Department of Energy spokesperson said. 
  • The drain means SPR inventories fell to the lowest since 1986.

U.S. SPR release were exported to Europe and Asia last month, including top US geopolitical nemesis in the global arena, China, even as U.S. gasoline and diesel prices hit record highs.

The export of crude and fuel is blunting the impact of the moves by U.S. President Joe Biden to lower record pump prices. In a call, Biden on Saturday renewed a call for gasoline suppliers to cut their prices, drawing rightful criticism from Amazon founder Jeff Bezos, because going after mom and pop gas stores merely demonstrates just how clueless the handlers of the senile presidential puppet truly are.

About 1 million barrels per day have been drained from the Strategic Petroleum Reserve through October, at an unprecedented pace. The drain means SPR inventories fell to the lowest since 1986. US crude futures are above $100 per barrel and gasoline and diesel prices above $5 a gallon in one-fifth of the nation. US officials have said oil prices could be higher if the SPR had not been tapped, and for once they are right. Still, the question looms of what happens to oil prices when the US can no longer sell the SPR amid concerns of a real emergency: we know the answer and the Biden admin won't like it.

Related: Is Biden Really Responsible For High Oil Prices?

"The SPR remains a critical energy security tool to address global crude oil supply disruptions," a Department of Energy spokesperson said, adding that the emergency releases helped ensure stable supply of crude oil.

Citing customs data, Reuters traced that the fourth-largest U.S. oil refiner, Phillips 66 shipped about 470,000 barrels of sour crude from the Big Hill SPR storage site in Texas to Trieste, Italy. Trieste is home to a pipeline that sends oil to refineries in central Europe. Meanwhile, Atlantic Trading & Marketing (ATMI), an arm of French oil major TotalEnergies, exported 2 cargoes of 560,000 barrels each. Cargoes of SPR crude were also headed to the Netherlands and to a Reliance refinery in India, an industry source said.

What is most notable is that a third cargo headed to US arch-enemy, China, which is now directly benefiting at the expense of US consumers as a result of Biden's escalating panic to undo the consequences of his catastrophic green policies by selling the most valuable US assets directly to Beijing!

But what is even scarier is the following exchange, in which the White House simply had no response when asked if the US is selling its emergency reserve oil to China.

Pointing out the obvious, Matt Smith, lead oil analyst at Kpler. said that "crude and fuel prices would likely be higher if (the SPR releases) hadn't happened, but at the same time, it isn't really having the effect that was assumed."

And while the midterms will come and go, and Democrats will suffer a historic loss, the U.S. energy picture is getting more dire by the minute thanks to the sheer incompetence and/or corruption of the executive branch: crude inventories are the lowest since 2004 as refineries run near peak levels. Refineries in the U.S. Gulf coast were at 97.9% utilization, the most in three and a half years. This means even the smallest accident can and will sell oil prices to the moon

By Zerohedge.com

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Leave a comment
  • Mamdouh Salameh on July 08 2022 said:
    I agree with the statement that crude and fuel prices would likely be higher if the SPR releases hadn't happened but not by much. In effect, the SPR release hardly depressed crude prices.

    The real reason is that global oil demand is very robust while the global oil markets is facing the twin problems of shortages and a fast-shrinking global spare oil production capacity including OPEC+’s.

    SPR releases are a waste of time and a drain on SPR reserves whilst underinvestment in oil production expansion continues to prevail. Annual investments estimated at $600 bn are needed over a ten-year period to reverse underinvestment.

    Meanwhile, SPR releases will have to be replaced at some time probably at higher prices.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • DoRight Deikins on July 08 2022 said:
    Maybe the major competition for the hearts and minds of the world or the the US number one trading partner. But «US arch-enemy, China» that's pretty strong rhetoric. Please don't mix the activities of a leadership cadre (whether US, European, Russian, or Chinese) with the hearts and desires of people.

    I know very good people in all those places.
  • Fjb on July 08 2022 said:
    so why is no one Investingating bidens criminal behavior? selling to the enemy is treason
  • DoRight Deikins on July 08 2022 said:
    OTOH, it is ridiculous to send our SPR to a country whose leadership is continually rattling sabers toward Taiwan, a country just off their coast, that the US has justifiably pledged to protect from thousands of miles away.
  • Mike Berger on July 09 2022 said:
    It's a global oil market.

Leave a comment




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