Cruz and Manchin unite to halt strategic stockpile oil sale.

The U.S. Senate passed an amendment to the ‌annual defense bill on Thursday ⁤that would‍ ban oil exports ⁣to China ‌from the nation’s Strategic⁢ Petroleum Reserve (SPR), which sits half empty after President Joe Biden ordered a drawdown to reduce soaring ‍inflation.

The amendment, spearheaded by Sens. Ted Cruz (R-Texas)‍ Joe ⁣Manchin⁤ (D-W.V.) passed the upper ⁣chamber in a vote ⁣of 85-12 on‌ July 20.

The SPR, which was filled to‌ its ‍then 727 million‌ barrel storage capacity a little over a decade ago, has been depleted to⁢ a multi-decade ⁤low of ⁢336 million barrels, the latest federal data shows.

Reduced levels of the ‌strategic stockpile have been the subject of controversy, as Republicans accused ‌Mr.‌ Biden of drawing it​ down‍ irresponsibly and depriving the ⁢nation of ‌an important⁣ energy buffer in⁢ case of‌ emergencies.

While the Biden administration has⁣ pledged⁢ to refill the reserve, it’s a process that Energy‍ Secretary Jennifer Granholm‌ has said could⁣ take years as‍ a quick buyback program could lead ⁤to price spikes and revive inflationary pressures at a time when‌ they remain uncomfortably high.

In bipartisan fashion, ‌the Senate⁢ has moved to shield the strategic stockpile⁤ from further drawdowns that⁤ would benefit America’s adversaries,‍ which⁣ have been building up⁣ their reserves.

To this end, ‌the Senate on July ⁣20 passed⁣ an amendment (pdf) to the ⁤National Defense Authorization Act⁢ (NDAA) to ban sales of oil from⁤ the strategic reserve to⁤ China, North Korea, Iran, ​and ⁢Russia.

SPR Oil Goes ⁣to‌ China

Last July, in⁣ a sale of 39 million barrels from the‌ strategic stockpile that was part of the Biden-ordered total drawdown of around 180 million ​barrels, around 1 ​million barrels⁣ went to UNIPEC ​America, a Houston-based arm of China’s Sinopec. remove

“We ⁢know China‍ has been amassing the largest ​stockpile of crude in the world. Nevertheless, last year, the United States sold off⁣ part of our reserves to China,” Mr. ⁢Cruz⁤ said in ⁢a statement.⁢ “I ​have been working ⁤with ‌Senator ⁣Manchin to prohibit such inexplicably reckless moves‍ in​ a bipartisan way.”

“We should not be selling our emergency oil reserves to our adversaries,” Cruz added.

Mr. ​Manchin, who on a number of occasions​ has criticized the Biden administration’s energy policies, took a similarly‌ dim‍ view of the United States ⁤depleting its petroleum stockpile.

While ‍the United States ramped up production and exports to help⁣ meet global demand as some ​crude supply went offline in the wake of Russia’s invasion‍ of‍ Ukraine, ‌some other countries have taken‍ a different approach ‌to the energy ⁣crunch.

“China,⁢ on the other ​hand, ​stockpiled oil and ‌held ‍back refinery production, and while China‍ was stockpiling, one of its state-owned companies purchased over 1.4 million ⁣barrels from the United States of America, the people of our great country, from our own ‍stock of reserves,” Mr. Manchin said in a statement. “That’s what we’re ⁣trying to stop.”

Some senators were against the measure. ‌Sen. Chris Murphy (D-Conn.), who opposed the ban, ⁣said‌ it “creates the illusion of solving a problem while ‍having⁢ very little political impact and likely doing more⁣ harm than good.”

Some analysts suggested the move was more symbolic than pragmatic.

Benjamin Salisbury, an analyst at Height ‍Capital Markets, said ⁤it was ⁣unlikely that a ban‌ would​ have “any systemic impact on ​the functioning ⁣of the ⁤SPR, which is done through a competitive‌ bid⁣ in a ⁢relatively⁣ liquid market.”

Before the amendment can become law​ as part of the⁣ defense⁣ bill, the House and‍ Senate ⁣need to go to conference to hammer out a final version of the⁤ measure, which has to clear both chambers and be signed by Mr. Biden to enter into force.

On July 18, the Senate voted⁤ to ‍begin consideration of‌ the defense bill, bringing it a step closer to final passage.

Senate Begins Consideration of Defense Bill

Senators voted 72 to 25 to invoke cloture on ‍the motion to proceed to its version of the bill, which sets ⁣forth policies for Department of Defense (DOD) programs and activities, as‌ well as military​ construction, and the Department of ‍Energy’s (DOE) national security program.