Oil from U.S. Reserves Head Overseas Amid Surging Gasoline Prices

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  • The SPR is discharging almost a million barrels each day through October.
  • The SPR is being depleted by the flow after last month seeing its lowest level since 1986.
  • In one-fifth of the country, the price of gasoline and diesel is above $5 per gallon.

According to data and sources, more than 5 million barrels of oil from the historic U.S. emergency oil reserves release that was intended to reduce domestic fuel costs were exported to Europe and Asia last month even as U.S. gasoline and diesel prices reached record highs, reports Reuters.

Plea for fuel providers to lower rate

The actions taken by U.S. President Joe Biden to cut record pump prices are being mitigated by the export of petroleum and fuel. On Saturday, Biden reiterated his plea for fuel providers to lower their rates, garnering criticism from Jeff Bezos, the founder of Amazon.

The Strategic Petroleum Reserve (SPR) is discharging almost a million barrels each day through October. The SPR is being depleted by the flow after last month seeing its lowest level since 1986.

In one-fifth of the country, the price of gasoline and diesel is above $5 per gallon, while U.S. oil futures are above $105 a barrel. According to American officials, oil prices might have increased if the SPR had not been used.

470,000 barrels from Texas to Italy

According to U.S. Customs records, Phillips 66 (PSX.N), the fourth-largest U.S. oil refiner, moved around 470,000 barrels of sour crude from the Big Hill SPR storage facility in Texas to Trieste, Italy. A pipeline that transports oil to refineries in central Europe is located in Trieste.

The data showed that the French oil giant TotalEnergies’ (TTEF.PA) subsidiary Atlantic Trading & Marketing (ATMI) dispatched two cargoes, each containing 560,000 barrels.

Despite requests for comment, Phillips 66 opted not to. A request for response from ATMI was not answered.

According to a source in the business, cargoes of SPR crude were also being shipped to the Netherlands and an Indian Reliance (RELI.NS) refinery. Another source claimed there was a third shipment going to China.

According to a shipping source, at least one cargo of oil from the West Hackberry SPR site in Louisiana was planned for export in July.

Crude and fuel prices would probably be higher

According to Matt Smith, chief oil analyst at Kpler, “Crude and fuel prices would probably be higher if (the SPR releases) hadn’t happened, but at the same time, it isn’t really having the effect that was predicted.”

The most recent exports come after three ships that helped replace Russian crude supply by transporting SPR crude to Europe in April.

As refineries operate close to capacity, U.S. crude stockpiles are at their lowest level since 2004. The U.S. Gulf coast’s refineries were operating at 97.9 percent capacity, the highest level in three and a half years.

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Source: Reuters

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