Oil from US reserves sent overseas as gasoline prices remain high

HOUSTON, July 5 (Reuters) – More than 5 million barrels of oil that was part of a historic emergency release of U.S. reserves to bring down domestic fuel prices was exported to Europe and Asia on last month, according to data and sources, even as US gasoline and fuel prices for diesel hit record highs.

The export of crude oil and fuel is mitigating the impact of measures taken by US President Joe Biden to lower record prices at the pump. Biden on Saturday renewed a call for gasoline suppliers to cut prices, drawing criticism from Amazon founder Jeff Bezos. Read more

About 1 million barrels per day are released from the Strategic Petroleum Reserve (SPR) until October. The flow is draining the SPR, which last month fell to the lowest since 1986. U.S. crude futures are above $100 a barrel and gasoline and diesel prices above $5 a gallon in a fifth of the country. US officials said oil prices could be higher if the SPR had not been tapped.

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“The SPR remains a critical energy security tool in dealing with disruptions to the global crude oil supply,” an Energy Department spokesperson said, adding that the emergency releases have helped ensure a stable supply of crude oil.

The fourth-largest U.S. oil refiner, Phillips 66 (PSX.N), shipped about 470,000 barrels of sour crude from the Big Hill SPR storage facility in Texas to Trieste, Italy, according to U.S. Customs data. Trieste is home to an oil pipeline that sends oil to refineries in Central Europe.

Atlantic Trading & Marketing (ATMI), a branch of French oil major TotalEnergies (TTEF.PA), exported 2 shipments of 560,000 barrels each, the data showed.

Phillips 66 declined to comment on the trading activity. ATMI did not respond to a request for comment.

Shipments of SPR crude were also being directed to the Netherlands and to a Reliance (RELI.NS) refinery in India, an industry source said. A third shipment headed to China, another source said.

At least one shipment of crude from the West Hackberry SPR site in Louisiana was due to be exported in July, a maritime source added.

“Crude and fuel prices would likely be higher if (the SPR releases) hadn’t happened, but at the same time it’s not really having the supposed effect,” said senior analyst Matt Smith. oil at Kpler.

The latest exports follow three ships that transported SPR crude to Europe in April, helping to replace supplies of Russian crude. Read more

U.S. crude oil inventories are at their lowest since 2004, with refineries operating near peak levels. Refineries on the US Gulf Coast were at 97.9% utilization, the highest in three and a half years.

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Reporting by Arathy Somasekhar in Houston; Editing by Chizu Nomiyama and Sam Holmes

Our standards: The Thomson Reuters Trust Principles.

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