President Joe Biden announced near the end of last month that he would make an order to release over 1 million barrels of oil per day from the U.S. Strategic Petroleum Reserves (SPR) for over six months as the price of fuel continues to climb all over the country.
This choice was made as a form of pressure release valve which became necessary due to other actions taken by the president, naming the boycotting of Russian oil after its full-scale invasion of Ukraine. While the SPR release equates to only about 5% of the total amount of oil Americans use in a single day, it is also about the same amount that would have been purchased from and supplied by Russia to the U.S.
However, as discovered in a recent report, it has been stated that quite a bit of that release from the SPR is actually being exported instead of being used to help Americans.
“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,” stated a recent report from Bloomberg News.
“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,” stated the outlet.
The oil from the U.S. SPR release is slated to go to Rotterdam, reported Bloomberg.
“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.”
In the middle of last November, Biden made the choice to release over 60 million barrels of oil, the most massive release in the history of the reserve and has since made the choice to send out another 30 million barrels just last month.
Despite all of this, the million barrels of oil a day is just a very small amount in the grand scheme of things. It was reported by the U.S. Energy Information 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 course of the year.
At that time, Biden claimed that 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 slated for sale by Congress. This equates that the total amount of oil released will be just over 2.5 days worth.
This move, the tapping of the reserve, fails to solve the root production problems or make the prices fall for any significant time. “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,” stated Reuters.