Claims that US oil reserve exports harm consumers are misleading
Social media posts say President Joe Biden's administration is sending millions of barrels from the US Strategic Petroleum Reserve (SPR) to other countries, implying that this contributes to higher prices for American consumers. This is misleading; industry analysts note that different types of crude oil from the reserve are sold to meet the demands of specific refineries and regions, and that the release eases price pressures regardless of where the oil is consumed.
"Biden Admin EXPOSED Exporting US Strategic Oil In INSANE Move As Gas Prices Remain At RECORD Highs," says the caption of a July 6, 2022 Facebook video from Tim Pool, a YouTuber and political commentator. The clip accumulated more than 20,000 views.
The narrative has also circulated on Twitter, where one user wrote on July 7: "Europe and Asia received critical crude while Americans feel pain at the pump." Other social media posts responded to a Reuters article reporting that some 5 million barrels from the SPR had been sent overseas, including to China.
Republican lawmakers have also slammed the White House, with Representative Drew Ferguson of Georgia saying July 7 on Twitter: "While Americans are paying record high prices at the pump, this administration decides to give our oil to the EU and China."
However, the posts misrepresent the nature of the oil market, in which prices are set by global traders and supplies are transported to countries and regions based on the need for specific types of crude.
"What is being released is sour crude, which has more sulfur (than other types), and this is more conducive to replacing the Russian barrels" in Europe, said Matt Smith, a lead analyst at Kpler.
The oil consultancy analyzed the destination of 30 million barrels released from the reserve in June 2022 and determined that 5.35 million barrels were exported.
"It doesn't matter whether those barrels are consumed domestically or exported," Smith said. "The key goal is to keep prices lower or to keep them rising, so from that perspective, it doesn't matter."
Smith added: "The majority of these barrels are heading to Europe given that's where the need is rising" due to EU efforts to curb imports from Russia.
Biden announced March 31 the release of one million barrels per day from the US strategic reserve aimed at limiting the effects of a global supply crunch, which stems largely from the Russian invasion of Ukraine and measures blocking purchases of Russian oil.
The US Department of Energy noted that oil is sold from the reserve to companies that are then free to allocate where it is needed.
"Oil is a commodity traded on the global market, and while the United States government does not control oil and gas companies, the commodity the industry sells or the market, the SPR remains a critical energy security tool to address global crude oil supply disruptions," a spokesperson for the agency said in a statement.
"The emergency releases the president authorized has helped to ensure stable supply of crude oil to help keep our economy running and mitigate the pain Putin is causing at the pump. US oil and gas companies are eligible for sales and exchanges from the SPR and have benefited from the releases to date."
James Williams of WTRG Economics agreed that the oil's destination is unlikely to affect global prices -- and that the extra one million daily barrels are important.
"Prices would be higher by $10 to $15 a barrel if we hadn't been releasing this oil," he told AFP. "If some of it ends up going to China it doesn't really matter if it's on the international market."
Certain grades of crude oil are exported to refineries worldwide that are equipped to handle that specific product.
"Some refineries can only take light crude and other refineries are optimized for heavy crude," Williams said. "We export some of our light crude anyway while we import heavier crude."
Smith pointed out that when the strategic reserves are drawn, "they're putting these barrels up for sale and any company can buy them, including from China or India."
AFP previously fact-checked claims about the effect of Biden administration policies on energy independence here.