Wait, what? The Biden administration has apparently already shipped some five million barrels of oil from the U.S. Strategic Petroleum Reserve (SPR) to overseas markets even as the domestic price of gasoline remains near all-time highs.
The strategic reserve is meant to provide the United States with a backup supply of oil during times of crisis or war when the international supply could be strained. The strategic reserve was never designed as a political tool to try and manipulate the price of gasoline at the pump or, at the very worst, be used by the federal government to sell oil in overseas markets.
As Reuters reports, however, that’s exactly what has been happening since May as Biden continued his pledge to drive down the price of gasoline domestically by, um, selling it internationally:
More than 5 million barrels of oil that were part of a historic U.S. emergency reserves release to lower domestic fuel prices were exported to Europe and Asia last month, according to data and sources, even as U.S. gasoline and diesel prices hit record highs.
The export of crude and fuel is blunting the impact of the moves by U.S. President Joe Biden to lower record pump prices.
About 1 million barrels per day is being released from the Strategic Petroleum Reserve (SPR) through October. The flow is draining the SPR, which last month fell to the lowest since 1986. U.S. crude futures are above $100 per barrel and gasoline and diesel prices above $5 a gallon in one-fifth of the nation. U.S. officials have said oil prices could be higher if the SPR had not been tapped.
That’s a Reuters story excerpted above yet it couldn’t be written in a more confusing manner. Is Biden’s move to export oil from U.S. reserves helping or hurting the price of gasoline domestically? That’s not really explained yet it seems odd that oil intended to be set aside for use by the United States is being sent elsewhere.
What’s really going on here is that the Biden administration played a bait-and-switch on the American people. When it was announced that Biden would be tapping the strategic reserve, it was strongly implied that oil would be used exclusively for domestic production.
That wasn’t the case when you read the fine print of the president’s order which essentially aimed to sell oil from the reserve on the international market to the highest bidder, a move that continues to help keep the price trending higher:
The president faces accusations of a sneaky sleight of hand as it was revealed that between a fifth and a sixth of the reserve oil he bragged about releasing to boost supply made its way offshore to Europe and Asia in June.
Biden authorized the release of a million barrels a day from April onwards. But his action has done little to combat soaring gas prices, with the national average sitting at $4.74 as of Tuesday – still far above the $2.28-a-gallon average from just before he took office.
But it has had little effect, with a closer look at the press release revealing that the oil released from the strategic reserve was always destined for the highest bidder – even if they were overseas.
That is due to strict international rules dictating the sale and supply of oil – although a regular American who listened to Biden’s proclamation in passing would likely have believed that the increase in supply would have been destined for domestic refineries, to lower US prices.
All the material and wording from the White House were designed to make anyone listening believe that releasing oil from the strategic reserve would be used for domestic production to help drive the price of gasoline down in the United States.
If Biden had ever plainly stated that oil would be taken out of the reserve, a supply created to keep the United States secure during wartime, and sold on the international market to the highest bidder, most Americans would’ve been livid.
Back in May, moves from the Biden administration to release huge amounts of oil on the international market caught allies off guard and caused an uproar in global markets:
The United States announced a record-sized release of emergency crude oil reserves in March without consulting partners in the International Energy Agency, leaving them scrambling to match with releases of their own, according to two sources familiar with the matter.
The group’s members have become worried that U.S. President Joe Biden is using the Strategic Petroleum Reserve (SPR) to tamp down rampant domestic inflation for political reasons, instead of protecting consumer countries from a global supply disruption, according to the sources who declined to be identified because of the sensitivity of the topic.
Biden’s overstated claims that releasing oil from the strategic reserve would have a dramatic effect on the price of gas at the pump were vastly oversold, and now it’s partly clear why that is. Rather than using the oil domestically, or selling it at a discounted rate to domestic refineries, the United States became a global seller essentially taking oil from our national emergency energy savings account and making it available to the highest bidder.
The move itself seems ludicrous in that the skyrocketing cost of gas and fuel oil are a result of Biden’s political policies. Using the strategic reserve, especially in this manner, puts the country in a weaker position globally and could lead to longer-term problems with domestic supply.
Biden’s answers for gas prices have been all smoke and mirrors to cover his own bad policies. This one, however, takes the cake for fooling the American people into believing he was doing something distinctly to help the domestic energy market when what he truly did was position the United State as yet another global seller of oil on the international market.
