President Joe Biden’s recent move to tap the U.S. Strategic Petroleum Reserve in an attempt to lower soaring gas prices is expected to supply Indian and Chinese oil needs during global shortages.
The White House says that the Department of Energy will release 50 million barrels of oil held in U.S. reserves, of which 18 million have already been approved for sale by Congress.
India and China have been actively purchasing U.S. “sour crude oil” produced in the Gulf of Mexico. Sour crude oil is expensive to process due to high sulfur levels and has historically turned buyers away.
However, U.S.-produced sour crude oil appeals to some foreign buyers because of its more affordable price tag.
The White House’s announcement means the U.S. will push to accelerate overseas sales to counter increasing prices at the pump. In addition to the 18 million barrels released to India and China, 32 million barrels are intended for U.S. consumers.
The strategic release from the reserves comes after OPEC, led by nations including Russia and Saudi Arabia, refused to increase production.
Gas shortages have contributed to rising gas prices and inflation not seen in more than seven years.
Rising inflation
According to a White House statement, “The President has been working with countries across the world to address the lack of supply as the world exits the pandemic.
“The President stands ready to take additional action, if needed, and is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic.”
However, according to Ranking Member of the Senate Energy Committee, Senator John Barrasso, R-Wyo., the president’s decision to tap into U.S. strategic oil reserves is no “substitute” for addressing gas shortages.
“President Biden’s policies are hiking inflation and energy prices for the American people. Tapping the Strategic Petroleum Reserve will not fix the problem. President Biden’s policies are hiking inflation and energy prices for the American people. Tapping the Strategic Petroleum Reserve will not fix the problem,” Barrasso said.
India, Japan, China, the United Kingdom, and South Korea also will tap their reserves to lower prices at the pump. The releases are part of an effort to reduce gas prices after OPEC’s recent efforts to keep costs high by not releasing more oil into the market.
The White House has said OPEC’s refusal to respond to increased demand is the leading factor in global shortages.
In contrast, Republicans argue that the administration’s policies are the cause of inflation and price hikes. “We are experiencing higher prices because the administration and Democrats in Congress are waging war on American energy. President Biden has either eliminated or severely restricted access to America’s oil and natural gas resources on federal lands and waters,” Barrasso said.
The senator continued, “Begging OPEC and Russia to increase production and now using the Strategic Petroleum Reserve are desperate attempts to address a Biden-caused disaster. They’re not substitutes for American energy production.”
