US Funding Bill Bars China from Strategic Petroleum Reserve Oil Purchases
US Funding Bill Bars China from Strategic Petroleum Reserve Oil Purchases

US Funding Bill Bars China from Strategic Petroleum Reserve Oil Purchases

  • 04-Mar-2024 6:01 PM
  • Journalist: Shiba Teramoto

In a move aimed at curbing China's ability to purchase oil from the Strategic Petroleum Reserve (SPR), congressional leaders unveiled a significant provision in the U.S. funding legislation on Sunday. This development underscores a rare bipartisan consensus within Congress, highlighting the necessity of adopting a firm stance on China amidst a deeply polarized political landscape.

The issue surrounding the sale of oil from the SPR to China gained prominence following President Joe Biden's announcement in 2022 of plans to sell 180 million barrels of SPR oil. This decision came in response to the sharp increase in gasoline prices following Russia's invasion of Ukraine. Notably, in the same year, a sale of 1 million barrels of SPR oil was facilitated to UNIPEC America, a Houston-based subsidiary of China's Sinopec. Additionally, during former President Donald Trump's tenure in 2017, SPR oil was sold to PetroChina International, a subsidiary of the Chinese state-owned oil company PetroChina Co Ltd.

Despite the SPR's current inventory exceeding 360 million barrels of oil, the figure is dangerously close to 40-year lows due to significant sales conducted in 2022. In July of that year, the Democratic-controlled Senate passed a bill with an overwhelming margin of 85 to 14, seeking to prohibit the export of SPR oil to China. The sale of a total of 83 million barrels of oil to China by U.S. oil companies in 2022 further underscores the gravity of the issue at hand.

The recently revealed bill spans an extensive 1,050 pages and outlines funding for six segments of the government, with the remaining six segments slated for consideration later in the month. The legislative process entails the U.S. House voting on the bill first, followed by deliberations in the Senate before Friday, as detailed by Senate Majority Leader Chuck Schumer. The House is scheduled to reconvene in Washington on Tuesday, signaling the impending discussions surrounding this comprehensive funding package.

The provision targeting China's access to SPR oil reflects broader concerns within Congress about the strategic implications of Chinese investment in critical energy resources. Lawmakers have introduced numerous bills aimed at addressing various aspects of competition with the Chinese government, reflecting a bipartisan sentiment that transcends the usual political divides.

This bipartisan consensus underscores the growing recognition of China's role as a global economic and geopolitical competitor, necessitating a proactive approach to safeguarding U.S. interests and strategic assets. The restrictions on China's access to SPR oil represent a significant step in this direction, signaling Congress's commitment to protecting vital national resources and preserving U.S. energy security.

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