House Republicans Launch Probe of Biden’s Oil Reserve Release By Bloomberg

© Stocksak. House Republicans Launch Probe of Biden’s Oil Reserve Release

(Bloomberg) — House Republicans are launching an investigation into what they say could be the “potential misuse” by the Biden administration of the nation’s emergency oil reserves to lower gasoline prices, as well as White House deliberations over a fuel-export ban.

The House Committee on Oversight and Reform is preparing for a more rigorous probe if Republicans take control of the chamber after November’s midterm elections. This development would allow them to subpoena key administration officials, including President Joe Biden. 

Committee Republicans, in a letter Wednesday, said they were examining the use of the Strategic Petroleum Reserve by the administration amid a historic 180 million barrel release that began in the Spring on the heel’s of Russia’s invasion of Ukraine and culminated last week when the White House announced it was offloading the final tranche of 15 million barrels. In a letter to Energy secretary Jennifer Granholm, Repubicans said that they were looking for information about a possible ban on the export of refined petroleum products.  

“We are concerned that the president may soon impose an oil and gas export ban that will result in even higher gas prices, supply chain issues, global market upheaval, and reduced energy security for the US and our allies,” said the letter which was led by Representative James Comer, the committee’s top Republican, and South Carolina Representative Nancy Mace. 

The Department of Energy didn’t immediately respond to a request for comment.

The letter comes amid Republican ire over the administration’s use of the SPR to tame high gasoline prices ahead of the Nov. 8 midterm elections that will decide control of Congress. The latest release followed OPEC+’s decision earlier this month to slash production, which drew criticism from the White House and further soured US-Saudi Arabia relations. Biden stated that further oil reserves releases are possible in the coming months.

Meanwhile, Saudi Arabia’s oil minister has warned major importers for trying to tame prices by selling down their inventories. “People are depleting their emergency stocks” and using it “as a mechanism to manipulate markets,” Prince Abdulaziz bin Salman said at the Future Investment Initiative conference in Riyadh earlier this week. “Losing emergency stocks may become painful in the months to come.”

Continue reading: Saudi Energy Minister warns against the depletion of crude buffers

The administration is also considering an export ban on petroleum products such as gasoline and diesel. This would be the most radical move yet taken by the White House in order to reduce gasoline prices. Although no time line has been set for a decision, which has sparked division within Biden’s team, it isn’t expected to happen before next month’s elections, according to a person familiar with the matter.

In a letter to the House Republicans, they requested documents and communications relating to internal communications between Energy Department officials as well as between agency officials and White House staff on releases from SPR to lower prices and in conjunction with export bans.

The committee members, who are similar to US analysts and oil producers, argue that withholding petroleum products exports will drive up fuel prices and ultimately make it more costly for the US Northeast Coast (and West Coast) which are heavily dependent on imports. The timing wouldn’t be ideal, as the East Coast is grappling with shortages of both diesel and gasoline.

Read more: A ban on the export of gasoline from Biden could backfire and lead to higher pump prices

Committee Republicans previously have raised flags about the administration’s use of the SPR, alleging the Energy Department transferred 900,000 barrels of oil to Unipec America Inc., a subsidiary of Communist Party owned Sinopec (NYSE:) Corp. and the recipient of billions of dollars of investment by BHR Partners, a private equity firm where Hunter Biden, the president’s son, was a founding board member. Republicans also have previously asked the Energy Department for a briefing on the agency’s plans to refill the reserves.

The White House stated that the Energy Department is legally required to sell the SPR Oil in a competitive auction to any foreign bidder. “This independent process has been consistent across administrations,” said Ian Sams, spokesman for the White House Counsel’s Office.

(Updates on US-Saudi Arabia Relations starting in sixth paragraph. Further market context in the 10th.

©2022 Bloomberg L.P.

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