The 50 million barrels of oil that Joe Biden has ordered released from the Strategic Petroleum Reserve will largely go to China and India, according to Fox Business News.
About 18 million barrels of that oil have been earmarked for sale by Congress. The other 32 million barrels will go to the American consumer. Since the oil in the Strategic Petroleum Reserve is what’s known as “sour” crude — oil with large levels of sulfur that makes it more expensive to refine — it’s far more attractive to foreign buyers like China because it’s relatively inexpensive compared to the “sweet” crude that’s easier to turn into gasoline at the refinery.
The White House’s Tuesday announcement means the U.S. will seek to accelerate sales abroad in an attempt to counter spiking prices at the gas pump.
Earlier this month OPEC+, led by nations like Saudi Arabia and Russia, refused to increase production to meet rising demands.
Gas shortages have led to rising inflation and gas prices at the pump not seen in seven years.
“The President has been working with countries across the world to address the lack of supply as the world exits the pandemic,” the White House said in a statement.
In a globally coordinated effort China, India, Japan, South Korea and the United Kingdom will also tap their reserves to try and bring down gas prices.
Even with the release from the SPR, prices aren’t expected to drop.
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For a decade the U.S. was the world’s swing oil producer. But U.S. drillers have retreated amid a regulatory assault from Washington, pressure from progressive investors, and challenges obtaining capital. Some say they are also struggling to find workers. Output is set to hit a record in the Permian Basin, where the break-even costs are low and new production doesn’t require long-term investment.
But U.S. production is still about 1.7 million barrels per day below its pre-pandemic peak and has been declining in other oil fields such as the Bakken Shale, where a shortage of pipeline capacity has raised costs. The Democrats’ multi-trillion-dollar spending bill is chock-full of fees that would make U.S. producers less globally competitive.
How many sides of his mouth can Biden speak out of? He wants to cut production, which would raise prices, in order to save the earth from melting. Now he wants to increase production to bring the cost of gasoline at the pump down for Americans? Make up your mind, Joe.
None of this would be necessary if Biden would allow the oil and gas industry to get back to where they were before the pandemic. Not exactly “Build Back Better,” is it?