Page 5 - NorthAmOil Week 03 2023

NorthAmOil COMMENTARY NorthAmOil

Crude exports have
been on rise since
2015, when Congress
lifted a 40-year export
ban.

In 2022, the Biden administration withdrew a bid to limit Moscow’s ability to fund the war.
180mn barrels from the SPR, shrinking the Russia is the world’s second largest oil producer.
reserves to their lowest level since 1983. The US jitters about oil exports to China come
administration has since tried to halt sales from as Beijing is reopening the country after a pro-
the SPR that are routinely mandated by Con- longed lockdown in response to the COVID-
gress, and has no set plans to withdraw any more 19 pandemic. China may be seeking more oil
sizeable amounts from the reserve. imports, boosting demand growth.
Indeed, the Biden administration had said “In the second half of the year, I think that the
it wanted to refill the reserve when the price of Chinese economy is going to be on fire and that
oil falls to $70 per barrel, though that has yet to is going to be very, very important for the rest of
happen. West Texas Intermediate (WTI) crude, the world,” Standard Chartered chairman José
the US benchmark, has been trading at just Viñals recently told CNBC.
above $80 per barrel.
US gasoline prices were surging last year, as What next?
was inflation – to a 40-year high – which proved Global demand for oil could rise by 1.9mn
unpopular with the public. This came against barrels per day (bpd) this year to reach a
the backdrop of global pressures on crude and record-breaking 101.7mn bpd, the Interna-
gasoline prices. OPEC had also cut production, tional Energy Agency (IEA) said in a new report Already in 2021,
while many countries – including the US – on January 18. “China will drive nearly half this
banned Russian oil imports because of the war global demand growth even as the shape and Chinese energy
in Ukraine. US imports of crude from Russia speed of its reopening remains uncertain,” the companies
had been minimal prior to the ban, though. report said.
Already in 2021, Chinese energy companies were the fastest
US-Chinese relations were the fastest growing importers of US LNG,
The US and China are making some moves purchasing nearly 50% of the gas that US com- growing importers
towards thawing their economic and political panies sold overseas. A number of US lawmak-
relationship. On January 18 at the World Eco- ers last year called for curbs, as domestic gas of US LNG.
nomic Forum in Switzerland, US Treasury Sec- prices surged and political tensions continued.
retary Janet Yellen met Chinese Vice Premier The lawmakers cited US national security as well
Liu He. She said they had pledged to “prevent as domestic prices as being behind their calls.
competition from becoming anything ever near Before the midterm elections in early Novem-
conflict”. ber 2022, Michael Catanzaro, an energy adviser
Liu added: “No matter how circumstances to Trump, told Politico that congressional
change, we should always maintain dialogue Republicans could “latch onto” the issue of
and exchanges.” Yellen will, in the not-too-dis- gas exports. “There is some concern being
tant future, travel to Beijing and Liu’s colleagues expressed about the US exporting LNG to
have been invited to Washington. It was Yellen – China, with the thought of ‘Why are we sending
with other Group of Seven members – who pro- our energy to a geopolitical adversary?’” he told
posed the price cap on Russian crude exports in a gas conference.™

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