Joe Biden made much of his call to release 50 million barrels of oil from America’s Strategic Petroleum Reserve this week. Even though the amount released would only account for less than three days of average domestic oil demand, it turns out that much of the released oil will be going to China and India.
Of the amount of oil to be released, around 18 million barrels have been designated to be sold by Congress. The oil maintained in the Strategic Petroleum Reserve is known in the energy industry as “sour crude” oil, as it has higher levels of sulfur and is more costly to refine. China and other foreign buyers prefer sour crude because it is cheaper than “sweet crude” oil, which is, in turn, less expensive to refine into gasoline.
The announcement on Tuesday by the White House is an indication that the U.S. will be looking to increase foreign sales of America’s oil to address surging domestic retail gas prices.
OPEC rebuffed Biden’s requests earlier this month to increase oil production due to steadily increasing energy demand. In conjunction with the increased demand, shortages in gas supply have led to surging gas prices at the pump to levels not seen since the Obama administration.
The White House coordinates with China and India and South Korea, Japan, and the U.K. to tap into oil reserves to attack prices. Experts believe that the current release ordered from the U.S. Strategic Reserve will not cause retail gas prices to drop.
Before the Biden administration, the U.S. had become the world’s largest oil producer. The regulatory policies instituted since Biden assumed office have caused domestic producers to retreat from development. American oil companies are also reporting more incredible difficulty finding capital investors and workers.
Domestic oil production is off of pre-pandemic levels by about 1.7 million barrels each day. Meanwhile, Biden’s “Build Back Better” spending bill is loaded with fees and regulations specifically designed to make American energy producers less competitive in the international marketplace.