House Republicans Launch Probe of Biden’s Oil Reserve Release – Investing NewsEverything

(Bloomberg) — House Republicans are launching an investigation into what they say could be the “potential misuse” by the Biden administration of the nation’s emergency oil reserves to lower gasoline prices, as well as White House deliberations over a fuel-export ban.

The move by the Republicans on the House Committee on Oversight and Reform previews a more robust probe if the GOP takes control of the chamber after the November midterm elections, a development that would grant them the power to subpoena key administration officials of President Joe Biden. 

Committee Republicans, in a letter Wednesday, said they were examining the use of the Strategic Petroleum Reserve by the administration amid a historic 180 million barrel release that began in the Spring on the heel’s of Russia’s invasion of Ukraine and culminated last week when the White House announced it was offloading the final tranche of 15 million barrels. The Repubicans also said in the letter to Energy Secretary Jennifer Granholm that it was seeking information about a possible export ban of refined petroleum products.  

“We are concerned that the president may soon impose an oil and gas export ban that will result in even higher gas prices, supply chain issues, global market upheaval, and reduced energy security for the US and our allies,” said the letter which was led by Representative James Comer, the committee’s top Republican, and South Carolina Representative Nancy Mace. 

The Department of Energy didn’t immediately respond to a request for comment.

The letter comes amid Republican ire over the administration’s use of the SPR to tame high gasoline prices ahead of the Nov. 8 midterm elections that will decide control of Congress. The latest release followed OPEC+’s decision earlier this month to slash production, which drew criticism from the White House and further soured US-Saudi Arabia relations. President Biden has said further releases from the oil reserve are possible in the months ahead.

Meanwhile, Saudi Arabia’s oil minister has warned major importers for trying to tame prices by selling down their inventories. “People are depleting their emergency stocks” and using it “as a mechanism to manipulate markets,” Prince Abdulaziz bin Salman said at the Future Investment Initiative conference in Riyadh earlier this week. “Losing emergency stocks may become painful in the months to come.”

Read more: Saudi Energy Minister warns against depleting crude buffers

At the same time, the administration has been weighing an export ban on petroleum products like gasoline and diesel, a move that would mark the most radical step yet by the White House to tackle gasoline prices. Although no time line has been set for a decision, which has sparked division within Biden’s team, it isn’t expected to happen before next month’s elections, according to a person familiar with the matter.

House Republicans, in their letter, requested documents and communications related to internal communications by Energy Department officials, as well between agency officials and White House staff and third-party groups on releases from the SPR to lower prices as well as in conjunction with export bans, among other documents.

Similar to US oil producers and analysts, the committee members argue withholding exports of petroleum products will drive up global fuel prices and ultimately make it more expensive for the US Northeast and West Coast, regions that are both heavily reliant on imports. The timing wouldn’t be ideal, as the East Coast is grappling with shortages of both diesel and gasoline.

Read more: Biden gasoline export ban could backfire with higher pump prices

Committee Republicans previously have raised flags about the administration’s use of the SPR, alleging the Energy Department transferred 900,000 barrels of oil to Unipec America Inc., a subsidiary of Communist Party owned Sinopec (NYSE:) Corp. and the recipient of billions of dollars of investment by BHR Partners, a private equity firm where Hunter Biden, the president’s son, was a founding board member. Republicans also have previously asked the Energy Department for a briefing on the agency’s plans to refill the reserves.

The White House said the Energy Department is required by law to sell the SPR oil in a competitive auction to the highest bidder, regardless of whether the bidder is a foreign company. “This independent process has been consistent across administrations,” said Ian Sams, spokesman for the White House Counsel’s Office.

(Updates with US-Saudi Arabia relations starting in sixth paragraph, further market context in 10th.)

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