US Senators Look to Strengthen Ban on Selling Off Oil Stockpiles to China

U.S. senators introduced a bill on Thursday designed to expand the ban on selling off the nation's oil held in the Strategic Petroleum Reserves to China.

U.S. President Joe Biden signed a funding bill earlier this month that blocked Chinese companies from purchasing U.S. crude oil held in the nation's SPR, but the bill still allowed oil sales to Chinese companies, provided the oil wasn't actually being exported to China. A next-level bill was introduced on Thursday that would expand the earlier funding bill to include all Chinese companies—whether the oil was destined for export to China or not. It would also block SPR oil sales or exports to Russia, Venezuela, and Syria.

"This bipartisan bill will ensure America's Strategic Petroleum Reserve does not fall into the hands of those trying to harm us and ensure (Chinese Communist Party) controlled businesses are not making money by stockpiling taxpayer-subsidized oil," one of the sponsors of the bill, Republican Senator Joni Ernst, said in a Thursday statement to Reuters.

Democrat Senator John Fetterman—a co-sponsor of the bill—stressed that enemies of the U.S. shouldn't be able to benefit from sales of crude out of the SPR. "Our adversaries should not be able to purchase oil from our SPR—that's just commonsense," he said.

The bill is largely seen as a bipartisan one and could find sufficient support.

The United States sold off more than 290 million barrels of crude oil from the nation's Strategic Petroleum Reserves since President Biden took office, and re-purchased about 15 million barrels of that since last July.

A small amount of the crude oil sold out of the SPR was sold to a U.S. arm of China's Sinopec, drawing criticism.

By Julianne Geiger for Oilprice.com

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