More than 5 million barrels of US reserve oil sent to Asia, Europe

WHAT YOU NEED TO KNOW:

• Over 5 million barrels of oil from the US reserve were sent overseas in June, Reuters reported.
• The Biden administration has been tapping the reserve to try to bring down fuel prices.
• The exports follow similar shipments in April, when ships went to Europe to replace Russian oil.

More than 5 million barrels of oil from the US Strategic Petroleum Reserve were exported to Asia and Europe last month, according to a report from Reuters.

The news outlet revealed shipments included two cargo ships carrying 560,000 barrels each from Atlantic Trading & Marketing, part of France’s TotalEnergies. Phillips 66, the fourth-largest supplier of oil in the US, sent nearly 470,000 barrels from a storage facility in Texas to Trieste, Italy, where a pipeline supplies refineries in central Europe.

In April, Strategic Petroleum Reserve send similar shipments of crude when three ships sail to Europe to replace Russian oil.

US oil exports have been surging since Russia launched its invasion attack in Ukraine in February as Western countries turn away from Russian oil.

Gas prices, which are set by global markets, typically follow oil prices and US refineries have been a key bottleneck. Due to earlier shutdowns and restricted investment in recent years, capacity has shrunk and refineries have been running nearly at full tilt.

With little extra scope for refining more volumes of fuel, additional supplies of crude, including from the Strategic Petroleum Reserve, have been going overseas. In fact, Rystad Energy reported that oil exports from the US Gulf Coast hit a record rate in the second quarter.

The Biden administration has been releasing oil from the Strategic Petroleum Reserve in an atttempt to lower fuel prices. Releases are at a record pace of around 1 million barrels a day, bringing the stockpile to the lowest level since 1986 in June.

The average gallon of gas in the US climbed to a record high of $5 in early June. While gas prices have been coming down for the past three weeks, they remain high. And oil prices have fallen amid fears of a recession and the rising dollar.

“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,” Matt Smith, a Kpler oil analyst, told Reuters.

Source: Reuters