FILE- In this March 5, 2013, file photo, Trinidad Drilling rigs are seen off of Way Highway 59 outside of Douglas, Wyo. The Interior Department is preparing to offer oil and gas lease sales on large tracts of public land despite concluding that burning fossil fuels from those parcels could carry huge costs and contribute to climate change. (Leah Millis/The Casper Star-Tribune via AP, File)
July 6, 2022
At the same time Americans have been struggling to meet the demand of record-high gas prices, millions of barrels of oil released from American reserves has been sent to other countries, a new report claims.
More than 5 million barrels were exported by oil companies to Europe and Asia last month from Strategic Petroleum Reserve (SPR) sites, according to Reuters, while the average price for gasoline in the U.S. simultaneously hit record highs.
The move comes as President Biden renewed his calls for oil and gas suppliers to cut their prices over the July 4th weekend.
Earlier this year, President Biden released oil from the nation’s strategic reserves in an attempt to lower soaring gas prices. The first release of 60 million barrels came on March 1, which coincided with similar releases from other countries.
The Biden administration then announced a second significant release on March 31, indicating the U.S. would release 1 million barrels of oil per day for the six months leading up to the 2022 midterms.
“The SPR remains a critical energy security tool to address global crude oil supply disruptions,” a Department of Energy (DOE) spokesperson told Reuters, noting that emergency releases from the SPR have helped ensure stable supply of crude oil.
However, according to Bloomberg columnist Javier Blas, the SPR is diminishing dramatically and, if the Biden administration keeps up with its current pace, the SPR will reach a 40-year low by October.
“The US has become the world’s oil barrel of last resort, single handedly keeping prices in the energy market from exploding even higher by selling a large chunk of its Strategic Petroleum Reserve,” Blas writes. “And that matters,” he continued, pointing out that last month The International Energy Agency warned that the current global oil supply could struggle to keep pace with next year’s demand.
“The SPR may be the final cushion late this year and in 2023 to put a lid on oil prices — and global inflation. What Federal Reserve Chair Jerome Powell and his peers around the world do with interest rates hinges in large part on energy market developments,” Blas concluded.
According to an interview with Reuters, Matt Smith, the lead oil analyst at Kpler, says “crude and fuel prices would likely be higher” had the SPR releases not occurred. “But at the same time, it isn’t really having the effect that was assumed,” he concluded.
The National Desk (TND) reached out to the DOE for comment, but did not hear back.
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