President Joe Biden promised that oil from the Strategic Petroleum Reserve would curb record-high gas prices. But some of that oil is now going to Europe.
What did Biden promise?
After gas prices skyrocketed to a national record of $4.33 per gallon in mid-March, Biden announced that 1 million barrels of crude oil will be released from the Strategic Oil Reserves per day for the next six months beginning in May.
“This is a wartime bridge to increase oil supply until production ramps up later this year. And it is by far the largest release from our national reserve in our history,” Biden said. “It will provide a historic amount of supply for a historic amount of time — a six-month bridge to the fall.”
What is happening now?
Bloomberg News reported this week that a cargo ship loaded with crude product from the U.S. Strategic Petroleum Reserves has departed a port in Texas bound for Europe.
Bloomberg reported:
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 fact, Biden recently offered to sell American oil from the petroleum reserves to countries that are highly dependent upon Russian energy and most at-risk to economic problems associated with cutting off the tap of Russian oil, Bloomberg noted.
Does it actually lower gas prices?
Last fall, Biden released 50 million barrels of oil from the Strategic Petroleum Reserve and released another 30 million barrels last month.
The expressed purpose of such releases is “to lower prices for Americans” at the gas pump, according to the White House.
However Stewart Glickman, an energy analyst at CFRA Research, told NBC News any price improvements related to the release are negligible at best.
“It might give you a little bit of short-term relief in the same way that taking some Advil will give you temporary relief from a headache,” he explained. “But the root cause of the headache is probably still going to be there, and that’s going to be sticking around long after the medicine’s worn off.”
Goldman Sachs analysts, meanwhile, described last November’s release as but a mere “drop in the ocean.”
The biggest factor mitigating the positive impact the petroleum release will have on gas prices is that 1 million barrels is only a small fraction of daily U.S. oil consumption.
According to the Energy Information Administration, the U.S. used approximately 20 million barrels of oil per day last year.