The US Congress has passed a funding bill that prevents China from purchasing crude oil from the country’s Strategic Petroleum Reserve (SPR), in a move that reflects the growing bipartisan concern over China’s influence and access to vital resources.
The bill, which was unveiled by congressional leaders on Sunday, follows a controversial sale of about one million barrels of SPR oil to UNIPEC America, a subsidiary of China’s state-owned oil giant Sinopec, in 2022. That sale was part of a larger release of 180 million barrels of SPR oil by the Biden administration to ease gasoline prices that spiked after Russia’s invasion of Ukraine.
The SPR, which currently holds more than 360 million barrels of oil, is the world’s largest emergency stockpile of crude oil. It was established in the 1970s to protect the US from supply disruptions and ensure its energy security.
Why China Matters
China is the world’s largest oil importer and consumer, and its demand for oil has been growing steadily despite the global economic slowdown and the transition to cleaner energy sources. In 2022, China imported 83 million barrels of oil from the US, making it the third-largest destination for US crude exports after Canada and Mexico.
However, China’s rising oil appetite and its assertive foreign policy have also raised alarm in Washington, where lawmakers from both parties have introduced dozens of bills to address the competition and challenges posed by China’s government. Some of these bills aim to restrict China’s access to US technology, capital, and markets, as well as to counter its human rights abuses, military expansion, and trade practices.
The ban on SPR oil sales to China is the latest example of the US Congress taking a hard line on China, which has been accused of engaging in unfair and predatory behavior in the global energy sector. China has been investing heavily in oil and gas projects around the world, especially in countries that are under US sanctions or have poor governance and environmental standards. China has also been involved in territorial disputes and maritime conflicts with its neighbors over oil and gas resources in the South China Sea and the East China Sea.
What’s Next
The funding bill, which covers six of the 12 segments of the government that Congress is responsible for allocating money for, still needs to be approved by the House and the Senate before Friday, when the current funding expires. The House is expected to vote on the bill on Tuesday, and the Senate will follow suit later in the week.
The bill is likely to face little opposition, as the desire for a tough stance on China is one of the few issues that unites the deeply divided US Congress. However, the bill could also complicate the already strained relations between the US and China, which have been locked in a bitter rivalry over trade, technology, human rights, and regional security.
The ban on SPR oil sales to China could also have implications for the global oil market, which has been volatile and uncertain amid the geopolitical tensions in the Middle East, the supply disruptions in North America, and the demand recovery from the pandemic. The US, which is the world’s largest oil producer and exporter, has been using its oil diplomacy to influence and stabilize the market, as well as to advance its strategic interests and values. By excluding China from its SPR oil sales, the US could lose some of its leverage and goodwill in the oil market, as well as in the broader international arena.
The US and China, as the world’s two largest economies and energy consumers, have the potential and the responsibility to shape the future of the global energy system. By finding common ground and mutual benefits, they could foster a more constructive and cooperative relationship that would benefit not only themselves, but also the world.
Source: Reuters
