A provision within the U.S. funding legislation disclosed by congressional leaders on Sunday includes a stipulation to prevent China from procuring oil from the Strategic Petroleum Reserve (SPR).
The stance against China is a rare bipartisan consensus in the deeply divided U.S. Congress, reflecting lawmakers’ shared concerns regarding competition with China’s government. Numerous bills have been introduced to address this competition and assert a firm position on dealings with China.
The controversy surrounding sales of SPR oil to China intensified following President Joe Biden’s 2022 announcement of a sale of 180 million barrels of SPR oil to stabilize gasoline prices amidst the surge triggered by Russia’s invasion of Ukraine.
In 2022, the SPR facilitated the sale of 1 million barrels to UNIPEC America, a Houston-based entity of China’s Sinopec. Additionally, under the administration of former President Donald Trump in 2017, some SPR oil was sold to PetroChina International, a subsidiary of the Chinese state oil company PetroChina Co Ltd.
Currently, the SPR inventory comprises over 360 million barrels of oil but is nearing four-decade lows due to the sales executed in 2022.
Last July, the Democratic-controlled Senate passed a bill by a margin of 85 to 14 to prohibit exports of SPR oil to China. Senator Chris Murphy, a Democrat, expressed skepticism about the effectiveness of such measures, suggesting they might have limited political impact and could potentially yield unfavorable consequences.
In 2022, U.S. oil companies supplied China with 83 million barrels of oil.
The comprehensive 1,050-page bill unveiled on Sunday delineates funding allocations for six government segments out of the twelve that Congress is tasked with financing. The remaining six segments are slated for funding deliberations later this month.
Senate Majority Leader Chuck Schumer indicated that the House must first vote on the bill before the Senate can consider the package before Friday. The House is scheduled to convene in Washington on Tuesday for further proceedings.