As President Biden struggles to explain and control the rising price of gasoline, one of the things he has tried to help the problem is to release oil from the Strategic Petroleum Reserve (SPR). Although a very temporary measure, the hope is that putting more oil in the market will control prices.
Unfortunately, the implementation of that has been uncoordinated and unproductive, to say the least.
More than 5 million barrels of oil that were part of an historic U.S. emergency reserves release to lower domestic fuel prices were exported to Europe and Asia last month, according to data from several sources, just at the same time U.S. gasoline and diesel prices hit record highs.
About 1 million barrels per day is being released from the SPR through October. The flow is draining the SPR, which was set up for national emergencies such as a war and which last month fell to the lowest since 1986.
Two examples: the fourth-largest U.S. oil refiner, Phillips 66, shipped about 470,000 barrels of crude from the Big Hill SPR storage site in Texas to Trieste, Italy, according to U.S. Customs data. Trieste is home to a pipeline that sends oil to refineries in central Europe.
Atlantic Trading & Marketing (ATMI) exported 2 cargoes of 560,000 barrels each, the data also showed.
U.S. crude inventories are the lowest since 2004 and gas prices are the highest they have ever been. Yet, we are releasing oil from our emergency strategic reserve and shipping it overseas. I think almost everyone could agree that is just crazy. Sure, some will argue that the oil companies should not have sold it outside the US and they are to blame. But, these companies are multi-national companies and are in existence to make money. Does that make them greedy? Maybe. Yet they also have a fiduciary responsibility to their stockholders to do what will be most profitable for the stockholders. How difficult would it have been, in the same executive order from the President that authorized the release of the strategic reserves to have included a clause that said “to be released only for domestic use and consumption”? Simple. Yet it did not happen.
One of the problems with the Biden Administration is that, even if you agree with the President’s policies, the ability of the Administration to effectively carry out its own policies is pretty bad. From the Afghanistan withdrawal, to being late to the game in aiding Ukraine to now the release of emergency oil reserves, the administration of the country’s business has time again shown to be lacking under the Biden Administration.