US Funding Bill Blocks China from Buying Oil from Strategic Petroleum Reserve

Reuters

11:45 JST, March 4, 2024

WASHINGTON (Reuters) – A measure in the U.S. funding legislation unveiled by congressional leaders on Sunday would block China from buying oil from the Strategic Petroleum Reserve.

The desire for a hard line on China is one of the few truly bipartisan sentiments in the deeply divided U.S. Congress, and lawmakers have introduced dozens of bills seeking to address competition with China’s government.

The issue of SPR sales to China heated up after President Joe Biden, a Democrat, announced in 2022 a sale of 180 million barrels of SPR oil to tame gasoline prices that spiked after Russia’s invasion of Ukraine.

That year the SPR sold 1 million barrels to UNIPEC America, a Houston-based arm of China’s Sinopec. In 2017, under former President Donald Trump, some SPR oil was sold to PetroChina International, a subsidiary of Chinese state oil company PetroChina Co Ltd. 601857.SS

The SPR currently holds more than 360 million barrels of oil but is close to 40-year lows due to the sales in 2022.Read full story

Last July, the Democratic-controlled Senate passed a bill 85 to 14 to ban exports to China of SPR oil. Senator Chris Murphy, a Democrat, said at the time it created the illusion of solving a problem while having very little political impact and likely doing more harm than good.

U.S. oil companies sold 83 million barrels of oil to China in 2022.

Congressional negotiators unveiled the 1,050 page bill on Sunday that lays out funding for six of the dozen segments of the government that Congress is charged with allocating money for, with the next six due by later in the month.

The U.S. House will have to vote on the bill first before the Senate can take up the package before Friday, Senate Majority Leader Chuck Schumer said. The House is due to return to Washington on Tuesday.