US senators seek to harden ban on selling reserve oil to China

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Written By Pinang Driod

© Reuters.

WASHINGTON (Reuters) – Two U.S. senators introduced legislation on Thursday to harden the ban on selling from the Strategic Petroleum Reserve (SPR) to China.

The bill, introduced by Senators Joni Ernst, a Republican and John Fetterman, a Democrat, would ensure that companies owned or controlled by China’s government do not buy oil from the SPR.

A funding bill signed by President Joe Biden this month blocked Chinese companies from buying oil, but contained an exception if the oil was not exported to China.

“This bipartisan bill will ensure America’s Strategic Petroleum Reserve does not fall into the hands of those trying to harm us and ensure (Chinese Communist Party) controlled businesses are not making money by stockpiling taxpayer-subsidized oil,” Ernst said.

The bill would also block the export or sale of SPR oil to countries including Russia, Venezuela and Syria, none of which have been significant buyers of the oil.

“Our adversaries should not be able to purchase oil from our SPR — that’s just commonsense,” Fetterman said.

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

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

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

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