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NorthAmOil COMMENTARY NorthAmOil
Bill advances to prevent China
buying oil from US SPR
The US House of Representatives has passed a bill to prevent China from
buying crude from the US Strategic Petroleum Reserve amid continued Sino-
American tensions
US-CHINA THE US House of Representatives has passed a
bill to stop China from buying oil from the US
WHAT: Strategic Petroleum Reserve (SPR).
The US House of This comes as the US continues to grapple
Representatives is with high domestic prices and inflation, as
moving to restrict well as an ailing economy. The country has also
Chinese purchases of become concerned about China’s slide back into
SPR crude. authoritarianism under President Xi Jingping
and its continued status as a political adversary.
WHY: Most recently this has played out in relation to
The Republican Party Russia’s war in Ukraine and tensions with the
is keen to assert itself West over Taiwan .
politically after regaining
control of the House. Policy push
Against this backdrop, there have been sugges-
WHAT NEXT: tions that LNG exports to China may be in the
There has been crosshairs in Congress sooner rather than later.
speculation that The newly Republican-led House of Represent-
Congressional atives is trying to put its stamp on US policy as
Republicans could take quickly as possible. Oil and gas sales have not
issue with booming LNG previously been seen as a strategic issue, but
exports to China. more of a way for the US to benefit long-term
from the Chinese economy.
The SPR bill passed easily in the House – led US President Joe Biden
by Republicans by a narrow margin – by 331 has been accused
to 97 votes. While all the “no” votes came from been accused by Republicans of politicising sales by Republicans of
Democrats, 113 Democrats nonetheless sided of crude from the SPR ahead of the midterm politicising sales of
with the Republicans. elections in early November. He had also been crude from the SPR.
According to the House draft of the bill, the castigated by Republicans – unfairly as it turns
US Department of Energy (DoE) would be pro- out – for allowing higher sales to China.
hibited from selling oil from the SPR to compa- In the first nine months of 2022, US oil
nies that are owned or influenced by the Chinese companies sold nearly 67mn barrels of crude
Communist Party. Such a measure could be to China. Exports to China have, however,
far-reaching given that much of the economy in dropped and instead the country has been buy-
China is government-controlled. ing more oil from Russia, which has become a
Representative Cathy McMorris, the new closer economic ally since Moscow invaded
Republican head of the House Energy and Ukraine in February.
Commerce Committee, said after the SPR vote: But in 2020, the US exported far more crude
“Draining our strategic reserves for political – 176mn barrels – to China under former US
purposes and selling it to China is a significant President Donald Trump.
threat to our national and energy security. This Crude exports have been on rise since
must be stopped.” 2015, when Congress, at the time controlled
The SPR bill’s future in the Senate, which by Republicans, lifted a 40-year export ban
remains under Democrat control, is uncertain. on crude under former US President Barack
Indeed, the bill could be changed in the Senate. Obama. Since then, the US has tried to bolster
US President Joe Biden – a Democrat – has global energy exports, including those of LNG.
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