Millions of Barrels of U.S. Oil Went to Europe and Asia – Earlier this spring, President Joe Biden called for the release of oil from the United States’ strategic reserves to help Americans by reducing the price at the gas pump. However, this week it was reported that more than five million barrels of oil were actually exported to Europe and Asia in June.
Those exports came even as U.S. gasoline and diesel prices hit record highs.
In addition to doing little to actually lower prices for Americans, the efforts by the Biden administration also reduced the nation’s emergency oil reserves. According to data from the Department of Energy, the Strategic Petroleum Reserve (SPR) declined by 6.9 million barrels in the week ending on June 24.
About one million barrels per day are now being released from the SPR through October, and it is simply draining the supply. However, some U.S. officials have maintained that the move is necessary as U.S. crude futures are above $100 per barrel and fuel prices for gasoline and diesel are above $5 a gallon in roughly one-fifth of the nation. Had the SPR not been tapped, U.S. officials said gasoline prices could be even higher.
Currently, the world’s largest emergency supply of crude oil stood at just 497.9 million barrels, the lowest level since April 1986. In addition, the U.S. is now consuming close to 20 million barrels per day, and based on an Energy Information Administration (EIA) 2021 estimate, the country maintains a 25-day supply.
The great danger is that the SPR is dwindling faster than the output of some medium-sized nations that are part of the Organization of Petroleum Exporting Countries (OPEC) – including Algeria and Angola, The Epoch Times warned in a report this week.
In April, President Biden called for releasing the SPR to help Americans feeling the pain from high gasoline prices.
“These releases will put more than one million barrels per day on the market over the next six months, and will help address supply disruptions caused by Putin’s further invasion of Ukraine and the Price Hike that Americans are facing at the pump,” Biden said in a White House announcement.
“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,” Matt Smith, lead oil analyst at Kpler, told Reuters.
In fact, the release of the SPR has done little to nothing to address the high gasoline prices.
As previously reported, what may be needed to address the high prices is “demand destruction.”
In other words, Biden’s efforts to soften the “pain at the pump” will only encourage Americans to keep driving more, which in turn will drive up prices. If more Americans put the car in park for a while, supply could increase and prices would fall.
Helping Asia and Europe?
However, the bigger issue may be that instead of even helping Americans, oil is now being exported to Europe and Asia. Reuters also reported this week 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. In addition, Atlantic Trading & Marketing (ATMI), an arm of French oil major TotalEnergies, exported more than 1.2 million barrels to Europe; while other cargos of SPR crude were sent to a Reliance refinery in India and another to China!
At the same time, U.S. crude inventories are now at the lowest since 2004 even as refineries run near peak levels. Refineries in the U.S. Gulf coast were at 97.9 percent utilization, the most in three and a half years.
Who is actually benefitting from the reserves being released – so far, it doesn’t seem like the average American.
Now a Senior Editor for 1945, Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military hardware, firearms history, cybersecurity and international affairs. Peter is also a Contributing Writer for Forbes.