More than five million barrels of oil that were among a historic release of U.S. emergency reserves to lower domestic fuel prices have been exported to Europe and Asia in the past month, according to figures and sources, despite the fact that U.S. gasoline and diesel prices have hit record highs.
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The export of crude and fuel is softening the impact of U.S. President Joe Biden’s moves to lower record prices at the pump. On July 2nd, Biden renewed a call for gasoline suppliers to cut prices, drawing criticism from Amazon founder Jeff Bezos.
Roughly 1 million barrels a day are being released from the Strategic Petroleum Reserve (SPR) through October. The flow is a drain on the SPR, which fell last month to the lowest level since 1986. U.S. crude futures are more than $100 a barrel and gasoline and diesel prices are over $5 a gallon in about one-fifth of the country. U.S. officials have stated that oil prices could be higher if the SPR had not been tapped.
“The SPR remains a critical energy security tool to address global crude oil supply disruptions,” said an Energy Department spokesman, adding that the emergency releases were instrumental in ensuring a stable supply of crude oil.
The fourth-largest U.S. oil refiner, Phillips 66 (PSX.N), has shipped about 470,000 barrels of sour crude from Big Hill SPR’s Texas storage site to Trieste, Italy, according to U.S. Customs data. Trieste is the site of a pipeline that sends oil to refineries in Central Europe.
Atlantic Trading & Marketing (ATMI), a branch of French oil major TotalEnergies (TTEF.PA), has exported 2 shipments of 560,000 barrels each, according to the data.
Cargoes of SPR crude were also heading to the Netherlands and to a Reliance (RELI.NS) refinery in India, an industry source reported. And a third cargo was headed to China, another source indicated.
At least one cargo of crude from the West Hackberry SPR site in Louisiana was scheduled for export in July, a shipping source added.
“Crude and fuel prices would likely be higher if (the SPR releases) hadn’t happened, but at the same time, it isn’t really having the effect that was assumed,” said Matt Smith, lead oil analyst at Kpler.
The latest exports follow three vessels that transported SPR crude to Europe in April, to help substitute Russian crude supplies.
U.S. crude inventories are at their lowest levels since 2004, with refineries operating near peak levels. Refineries on the U.S. Gulf Coast were at 97.9% usage, the highest in three and a half years.