Biden releases oil from Strategic Reserve, and it ends up in China
The president made a big show of releasing oil from the nation’s Strategic Petroleum Reserve – his effort to stem rising gas prices, and his declining poll numbers.
Setting aside whether either of those events is an emergency – which is the only reason why the government is supposed to tap the Reserve – there’s a much bigger problem: the oil will probably be exported to India and China.
According to Bloomberg:
A large portion of the barrels that will be offered from the U.S. Strategic Petroleum Reserve will likely be exported to China and India, traders said.
That’s because the supplies will consist of sour crude, a type of oil that U.S. refiners are shunning due to its high sulfur content, which makes it more expensive to process. For some foreign buyers, though, U.S. sour crude is attractive because it’s much cheaper than the global Brent benchmark.
The U.S. has already been selling oil from the SPR regularly this year, and a record volume of those barrels was exported in October.
China and India have been actively buying U.S. sour crude produced in the Gulf of Mexico. So, it’s easy to see why New Delhi and Beijing agreed to participate in the coordinated reserves release led by U.S. President Joe Biden.
Way to go, Joe.