The decade's most triggering comedy
President Joe Biden late last month announced he would release 1 million barrels of oil per day from the U.S. Strategic Petroleum Reserves (SPR) for up to six months as the price of gas continued to soar across the nation.
The move was intended to ease the pinch caused by another action Biden took — boycotting Russian oil after its invasion of Ukraine. While the SPR release amounts to just 5% of the oil Americans use every day, it’s also roughly what Russia supplied to the U.S.
But now a new report says some of the SPR release is being exported.
“A cargo of crude from the U.S. Strategic Petroleum Reserve departed a Texas port bound for Europe, a signal of increasing oil-market disarray as refiners shun Russian supplies and prices surge,” Bloomberg News reported.
“The rare export of strategic U.S. barrels is evidence of the ever-widening search for crude to replace Russian cargoes seven weeks after President Vladimir Putin’s invasion of Ukraine triggered international revulsion and sanctions. With the global oil benchmark trading above $110 a barrel, traders and refiners also are trying to cope with a cutoff of Libya’s biggest source of crude and little expansion in U.S. output,” the news site said.
The U.S. oil is headed to Rotterdam, Bloomberg reported.
“A tanker known as the Advantage Spring loaded low-sulfur crude originally pumped from the strategic reserve caverns in Southwest Louisiana at a port in Nederland, Texas earlier this month, according to a person familiar with the matter. The ship, chartered by an affiliate of French energy giant TotalEnergies SE, is bound for the key European port of Rotterdam, according to ship-tracking data compiled by Bloomberg.”
Back in November, Biden released about 60 million barrels, the largest release from the reserve in history, he said at the time, and released another 30 million barrels last month.
But a million barrels a day is a drop in the bucket. The U.S. Energy Information reported that, “In 2020, the United States consumed an average of about 18.19 million barrels of petroleum per day, or a total of about 6.66 billion barrels of petroleum” over the full year.
At the time, Biden said 32 million barrels “will be an exchange over the next several months, releasing oil that will eventually return to the Strategic Petroleum Reserve in the years ahead,” with the other 18 million authorized for sale via Congress. That means the total amount of oil tapped will be just over 2.5 days worth.
Tapping the reserve doesn’t solve the production problem or lower prices for long, either. “Analysts have warned an SPR release would only produce a short-term effect in the market, as it would not increase U.S. production capacity,” Reuters wrote.