“Pres Biden reportedly sold oil fr[om] American reserves to China’s Sinopec which Hunter Biden may still b[e] tied to via his financial ventures in China. If report correct that’s OUTRAGEOUS.”
— Sen. Charles E. Grassley (R-Iowa), in a tweet, July 8
Search on Twitter for “Sinopec Hunter Biden” and this is just one of many tweets from GOP lawmakers and supporters that turn up.
Meanwhile, a colleague on Friday attended a town hall held by Joe Kent, a Washington state Republican running for Congress promising to impeach President Biden. When one attendee asked about the oil sales, there were worried murmurs from the crowd and no pushback from the candidate.
What’s going on here? A basic misunderstanding of global oil markets.
The Biden administration is releasing oil from an emergency supply of crude oil, stored in underground salt caverns along the Gulf Coast, that was first set up in the 1970s. Presidents have occasionally tapped the reserve to mitigate the disruption from an international event — such as the spike in oil prices caused by sanctions imposed on Russia for its invasion of Ukraine.
Buried in the Reuters article was this paragraph: “Cargoes of SPR crude were also headed to the Netherlands and to a Reliance refinery in India, an industry source said. A third cargo headed to China, another source said.”
The next day, the right-leaning Washington Free Beacon published an article headlined: “Biden Sold a Million Barrels From U.S. Strategic Petroleum Reserve to China-Owned Gas Giant.” The reporter had dug up an Energy Department news release issued weeks earlier, on April 21, which listed 12 companies that had been awarded contracts to buy the oil after submitting bids.
Sixteen companies had submitted bids, and by law, the government is required to sell to the highest bidder, with limited exceptions, such as sanctioned companies.
Many of the firms that won contracts are the U.S. trading arms of foreign companies, such as Equinor (Norway), Shell (Netherlands/United Kingdom), Atlantic Trading (France), Mercuria (Cyprus), Motiva (Saudi Arabia) and Unipec (China.) The news release said Unipec, a subsidiary of state-owned Sinopec, received 950,000 barrels of the 30 million barrel release.
Buried in the Free Beacon story was the fact that Hunter Biden, the president’s son, had once had business dealings with Sinopec. Rosemont Seneca Bohai, a private equity firm where Biden was principal, invested in a fund generally known as BHR Partners. In 2015, that fund bought a stake in Sinopec Marketing, a Sinopec subsidiary that sells oil products. A Hunter Biden lawyer in 2021 said he “no longer holds any interest, directly or indirectly,” in BHR, though the Washington Examiner reported in March that Chinese records do not yet show that.
Then on Friday, the Federalist, an influential right-wing publication, posted an article headlined with a snappy talking point: “Biden Sold Oil From Emergency Reserves To Chinese Gas Giant Tied To His Scandal-Plagued Son.”
That spurred the congressional tweets. “Hunter is still business partners w/ the CCP [Chinese Communist Party] & they are buying our oil,” Rep. Marjorie Taylor Greene (R-Ga.) tweeted, linking to the Federalist article. “Can we impeach Joe Biden now???”
You can see how a months-old news release was used to churn up the outrage machine. But here’s why that outrage is misplaced.
Crude oil is an international commodity. Its price is determined by global supply and demand. The Biden administration is trying to increase the supply of oil to help bring down prices that have soared as the United States and its allies have tried to stem purchases of Russian energy products.
What matters for the price of oil is how much oil there is — not who has it.
“Where it goes is essentially irrelevant,” oil industry consultant Philip K. Verleger said.
Indeed, every oil industry analyst we contacted was puzzled by the fact that the recent sale to China suddenly was controversial.
Matt Smith, lead oil analyst for the Americas at Kpler, a commodity data company, closely tracks customs data on such crude oil transfers. He said the Biden administration in earlier releases from the SPR already sold to China 2.5 million barrels in October and 1.5 million barrels in November.
“This is not some new development from an SPR perspective or from a U.S. crude perspective,” he said in an interview. “It does not matter if it stays in the United States or not to influence the global price.”
Smith said about two-thirds of the 30 million barrels announced in April went to Europe, which is trying to wean itself off Russian oil. But oil going to China or elsewhere can free up other crude to go to Europe, he said.
— Sen. Charles E. Grassley (R-Iowa), in a tweet, July 8
Search on Twitter for “Sinopec Hunter Biden” and this is just one of many tweets from GOP lawmakers and supporters that turn up.
Meanwhile, a colleague on Friday attended a town hall held by Joe Kent, a Washington state Republican running for Congress promising to impeach President Biden. When one attendee asked about the oil sales, there were worried murmurs from the crowd and no pushback from the candidate.
What’s going on here? A basic misunderstanding of global oil markets.
The Facts
This is all started with a straightforward Reuters article that appeared this month, headlined: “Oil from U.S. reserves sent overseas as gasoline prices stay high.” The article noted that government data showed that more than 5 million barrels released from the U.S. Strategic Petroleum Reserve (SPR) has been exported to Europe and Asia in June.The Biden administration is releasing oil from an emergency supply of crude oil, stored in underground salt caverns along the Gulf Coast, that was first set up in the 1970s. Presidents have occasionally tapped the reserve to mitigate the disruption from an international event — such as the spike in oil prices caused by sanctions imposed on Russia for its invasion of Ukraine.
Buried in the Reuters article was this paragraph: “Cargoes of SPR crude were also headed to the Netherlands and to a Reliance refinery in India, an industry source said. A third cargo headed to China, another source said.”
The next day, the right-leaning Washington Free Beacon published an article headlined: “Biden Sold a Million Barrels From U.S. Strategic Petroleum Reserve to China-Owned Gas Giant.” The reporter had dug up an Energy Department news release issued weeks earlier, on April 21, which listed 12 companies that had been awarded contracts to buy the oil after submitting bids.
Sixteen companies had submitted bids, and by law, the government is required to sell to the highest bidder, with limited exceptions, such as sanctioned companies.
Many of the firms that won contracts are the U.S. trading arms of foreign companies, such as Equinor (Norway), Shell (Netherlands/United Kingdom), Atlantic Trading (France), Mercuria (Cyprus), Motiva (Saudi Arabia) and Unipec (China.) The news release said Unipec, a subsidiary of state-owned Sinopec, received 950,000 barrels of the 30 million barrel release.
Buried in the Free Beacon story was the fact that Hunter Biden, the president’s son, had once had business dealings with Sinopec. Rosemont Seneca Bohai, a private equity firm where Biden was principal, invested in a fund generally known as BHR Partners. In 2015, that fund bought a stake in Sinopec Marketing, a Sinopec subsidiary that sells oil products. A Hunter Biden lawyer in 2021 said he “no longer holds any interest, directly or indirectly,” in BHR, though the Washington Examiner reported in March that Chinese records do not yet show that.
Then on Friday, the Federalist, an influential right-wing publication, posted an article headlined with a snappy talking point: “Biden Sold Oil From Emergency Reserves To Chinese Gas Giant Tied To His Scandal-Plagued Son.”
That spurred the congressional tweets. “Hunter is still business partners w/ the CCP [Chinese Communist Party] & they are buying our oil,” Rep. Marjorie Taylor Greene (R-Ga.) tweeted, linking to the Federalist article. “Can we impeach Joe Biden now???”
You can see how a months-old news release was used to churn up the outrage machine. But here’s why that outrage is misplaced.
Crude oil is an international commodity. Its price is determined by global supply and demand. The Biden administration is trying to increase the supply of oil to help bring down prices that have soared as the United States and its allies have tried to stem purchases of Russian energy products.
What matters for the price of oil is how much oil there is — not who has it.
“Where it goes is essentially irrelevant,” oil industry consultant Philip K. Verleger said.
Indeed, every oil industry analyst we contacted was puzzled by the fact that the recent sale to China suddenly was controversial.
Matt Smith, lead oil analyst for the Americas at Kpler, a commodity data company, closely tracks customs data on such crude oil transfers. He said the Biden administration in earlier releases from the SPR already sold to China 2.5 million barrels in October and 1.5 million barrels in November.
“This is not some new development from an SPR perspective or from a U.S. crude perspective,” he said in an interview. “It does not matter if it stays in the United States or not to influence the global price.”
Smith said about two-thirds of the 30 million barrels announced in April went to Europe, which is trying to wean itself off Russian oil. But oil going to China or elsewhere can free up other crude to go to Europe, he said.
