The "for some reason" is that the caverns the oil is stored in are expected to become geologically unstable if they are emptied below a certain threshold. Extract below the 250 mark, and run the risk that they will collapse and cannot be refilled.
It looks like it started to plummet in April 2022, which was on Biden's watch (disclaimer: I voted for him). It apparently was in response to supply chain shocks spiking oil prices due to the start of the war in Ukraine.
Having the AI summarize the pros and cons of that action has valid points on both sides. But in his defense, that particular war was not of our doing, unlike the current war with Iran which was initiated impulsively.
Trump spoke about this publicly, promising he would "fill the reserves right up to the top", then when in power, didn't do that but instead started a war with Iran while the reserves were still low.
I am not sure its stupid. My conspiracy theory is that Trump works/connected to US oil industry, who took control over Venezuela's oil and now printing record profits since all competition (Hormuz states, Russia) is suffering from infra damage.
Selling oil out of the SPR is the new One Weird Trick Military Planners Hate! Biden was a generally fine president, but pulling oil out of the SPR to balance the budget was an extremely ugly way to do it, and hopefully that loophole gets plugged going forward.
Hopefully, it hits effective zero, and people start buying EVs.
As a bonus, maybe the military will stop wasting gasoline to murder civilians, since we’ve already established they value oil over absolutely everything else, including human life.
EVs are just as toxic due to mining techniques used at the moment, and with no effective way to recycle batteries even if they last longer than expected they aren't really a way forward completely, and baseload electricity still relies on oil and natural gas since most countries have for some reason pushed away from Nuclear as a long term non-renewable (it IS technically not renewable).
I get your point and it's clear that sticks seem to be more effective than carrots, but our supply chains are not electrified and that will take time, in the meantime this pain will propagate widely.
That isn't why he did it, it was not "to balance the budget". It was to make up for the panic after Putin invaded Ukraine. US gasoline prices soared, going up to $4.84 per gallon in June 2022. Releasing the oil caused it to drop. It wasn't given away, it was sold. The reserve was on the way back up in 2024, through when Biden left office. Furthermore, the government turned a large profit: they sold oil when it soared in price, and bought it back at a lower price.
Well... arguably it is partially our doing. Not for the reason's Tucker Carlson & Russia say, but that Obama and later Biden totally sat on their laurels after the Crimean invasion, totally paralyzed by fear of escalation and political fallout.
arguably and partially, perhaps a bit, but they have history to back up that reluctance.
That said, Putin's gonna do what Putin's gonna do and it likely wasn't the Crimean invasion that prompted it. It was the promise of waltzing in and just taking it without resistance.
In 2014, there was no political will in the US political system to do anything--witness Obama drawing the red line in Syria over the use of chemical weapons, and after Assad used them, Congress said "fuck off, we don't want to do anything." Given that Crimea was by far the most Russophile portion of Ukraine (it only veeeery barely voted to support Ukrainian independence in the Ukrainian independence referendum), it was much more difficult to build a case for any sort of intervention there than it would be after Syrian war crimes, and the latter wasn't enough to gain sufficient political will.
On top of that, 2014 is the 100th anniversary of the start of World War I, which means that all of the foreign policy people had been brushing up on their histories of World War I and the causes of said war, which is of course the ur-example of "random event escalates to every great power at war with each other." I definitely felt like a lone voice pointing out that I was getting more World War II vibes, with Putin acting like Hitler: "I just want a little bit of X, it's the last thing I'll ask for, I promise!"
Also, probably more important than the US reaction here is the German reaction, and Germany was in full Russian appeasement mode really right up until Russian tanks were literally rolling across the border in 2022.
Insofar as I can tell what's really reflected here is a difference between Democrat and Republican policy positions. The Democrats want to minimize domestic environmental impact and be a net oil importer. Let someone else handle the dirty work of drilling. The Republicans are less concerned with the environmental impact and want to increase exports, oil jobs and economic sovereignty. With higher domestic production and less dependence on foreign states, such a large petroleum reserve is unnecessary.
I prefer the Republican position. It sucks to harm the environment. But it sucks more to enable some of the regimes we import oil from. They frequently are not close allies. We frequently end up immersing ourself in wars and other entanglements over this foreign oil. You want to stop the wars, you have to stop the dependence on imported oil. (To be clear I'm not arguing that Republicans will start less wars, or are a more moral party. I am arguing in favor of domestic oil production because it removes a justification for war.)
The Democratic position exports the moral hazard to a place where Americans don't see it. Takes it out of their backyard. But frankly that is an immoral approach which both parties have taken repeatedly and it has undermined the health of the nation. The other case where this takes place at an absolutely massive scale is exporting certain types of jobs to other countries where labor standards are lax, and where slave labor takes place. People out there killed themselves while making iPhone or your shoes because the working conditions in those countries were so horrible. I am willing to pay a little more for shoes and buy a little bit fewer luxury goods so that I don't enable slave labor. Move the jobs back onshore where we can regulate the well being of the workers. We can't control it if it's in another country.
Your position appears to be based on crude production and drawing an equivalency between Middle East crude and US crude. They are unfortunately not equivalent. I agree that it’s amazing that the US doesn’t wholly depend on the Mideast for oil, but until we can process our own crude as cheaply as Mideast crude can be processed, strife in the Middle East will still push energy prices up.
Beware of well written statements that mask their fallacies. As a sibling comment points out, domestic oil production rose plenty during the Biden administration. Casting it as a democrat vs republican difference isn’t anywhere near the full story.
There is no political strategy story to be read into the drawdown of the SPR. Biden ("the democrats") drew it down by an even larger amount right after the invasion of Ukraine to stabilize prices, and now before it recovered Trump is drawing it down even further to stabilize prices from his new war.
This is not really supported by energy data. Under Biden/Harris, US crude production hit multiple consecutive all time highs and made the country a net exporter since 2020. In my world, that's the opposite of "minimizing domestic drilling." And producing oil doesn't prevent foreign wars; oil is a global commodity, energy markets are subject to global pricing events and disruptions anywhere drive up fuel prices in the US. Prices at the pump here don't care where crude was pumped. And the strange connection you draw between energy policy/oil reserves and offshore factory conditions conflates drastically different economic drivers. There is a real moral conversation to be had here about supply chain ethics but it doesn't get connected this way. This is a really shallow, cliche framing about [drilling vs importing] rather than [fossil fuel dominance vs clean energy transition], and drawing a preference to a party based on a faulty view of those is, disappointingly, Peak Political Affiliation 2026.
Let's also not pretend that the current Republican administration's insane military campaign to disrupt oil supply and markets, isn't helpful to, I don't know, say, Kremlin's oil and gas export revenues, and say, how higher global benchmark crude helps to, say, finance a domestic war economy while buffering against sanctions. Just a tiny thought to consider when holding a preference for Republican oil strategy.
Isn't US domestic oil exported to EU and others because its medium to light crude which US refineries are not calibrated for? Its my understanding US refineries are calibrated to refine Heavy crude which comes mainly from Canada and some from Venezuela.
If the Republicans actually had that position instead of being funded heavily by oil money they would be #1 Super Top Solar/Green energy party because that is the path to energy independence and to truly reduce the influence of OPEC - even outside of the fact that peak oil is over and it will continue to get more and more expensive to pull oil out of the earth. But they’re not because your assumptions are misplaced.
I don't think your interpretation of Democrat policies is correct. I've seen nothing regarding a desire to import oil rather than produce it domestically, something that is fundamentally different from declining to expand domestic production (we are already a net exporter after all).
The democrat position is more of, move off of oil to electrification, such that despite no expansion we never have to import, while simultaneously reducing that domestic impact.
About 40-45% of US petroleum use is burning it in passenger cars.
We're already a net exporter of oil; if we pushed a bigger fraction of cars and other transport uses to electrification we'd be a massive net exporter.
That wouldn't completely insulate us from global energy markets but it'd do a lot.
The counterpoint is that the US is producing more crude domestically than ever with more efficient drilling technology:
From my understanding they are running refineries at max utilization and not able to do required maintenance due to this crisis. This is what worries me about the October surprise. A couple of well timed "screw ups" caused by lack of maintenance when the whole system is already at its breaking point can spell trouble.
In relation to your first paragraph, do you think that in the world as a whole moving forward into the future there will be more economic growth in oil or in energy sectors involving solar, wind, batteries, and nuclear? How do you reconcile the economic potential of oil against the market data involving renewables? I.e., the reality of the data is showing that solar plus grid scale batteries are quickly on track to become cheaper than oil could ever promise to be, and that electric vehicles are clearly on track to beat gasoline in total cost of ownership.
Can we look at what China is doing and say that oil production is the growing future rather than a slowly declining industry with superior emerging alternatives?
Moving on to your second paragraph, isn’t oil dependence a big part of the cause with importing oil from problematic regimes? In other words, you can achieve energy independence by producing more energy, or using less energy. Energy in, energy out.
In that sense, don’t you think the Republican strategy leaves a lot to be desired? E.g., they just this week axed vehicle fuel efficiency standards, they aren’t encouraging domestic battery/EV manufacturing, they are against public transit projects, they are pro-suburb, pro-automobile, anti-urbanism, etc. I remember when John Kasich blocked high speed rail in Ohio, and the federal government was going to give them the funding! You drive between Cleveland and Columbus on I-71 and you’ll notice that it’s a 3-lane road for the entire 2-hour stretch and the traffic congestion never lets up unless it’s the middle of the night.
Domestic oil production is theoretically a solution but the global market isn’t really isolated like that. Even if America decides to be self-sufficient that doesn’t mean that prices will be low. Prices are low for goods when there is a widespread surplus of supplies. If the Iran war can spike gasoline prices almost double as they have in the past year or so, how will domestic production ever make up for that?
Finally, regarding your stance on slave labor. Perhaps we can make a positive argument to say that tariffs may in theory encourage more domestic production, bringing more goods production to a country with stronger labor laws. But now we are facing the cruel irony of US states moving the opposite direction on workers rights, doing things like toying with the idea of relaxing child labor laws. [1]
How good are US labor standards, really? This is a country with zero guaranteed paid parental leave, zero guaranteed paid time off (except in a small amount of states that have a minimum standard exceeding the federal standard — blue states like Illinois), and over 20 million residents with no health insurance coverage as well as the highest medical bankruptcy rate in the world.
When we talk about slave labor, are we talking about basic necessary medical care being conditional on continued employment? Are we talking about mothers going back to work 3 months after giving birth or sooner? Because that is America.
Fun fact: China has more mandatory paid holidays and leave days than the US.
I heard John Mearshimer say on a podcast that ~230k barrels, you can't go lower without damaging the caverns the oil is stored in, so we're pretty close to it being over.
So seriously, what is the administrations intention here? They’ve used all the missiles and drained all the gas. Are they trying to get the U.S. invaded?
Keep fuel prices low enough using the SPR to try to not lose at midterms. They don’t care what happens after, just as they don’t care about their constituents losing their Medicaid.
The cost of putting unsophisticated grifters in the ultimate position of power.
most of them have been replaced, or are threatened to be replaced if they don't tow the party line.
It's not a traditional party in the American sense any more, there's no real policy making behind the scenes, it's basically the Trump family enriching itself and a rabid base enabling it. The institutional part that supposed to be the brain of the whole operation has left the building
I don't share your optimism. I mean, yeah, he's doing to die soon, but his followers will just be suckered by the next con man who follows his playbook.
There have been a number of people who've tried to play some version of the Trump game. For whatever reason, he's the only one who ever got it to work. My theory is that it is because he has been a media presence, for better and worse, since the 1980s. Real estate, WWF, casinos, movies, reality TV, so much constant exposure. He's like the embodiment of 'no such thing as bad press'.
There have been Republican elected representatives who have confronted Trump. With very few exceptions, they have gone down to defeat in subsequent Republican primary elections.
The Republican electorate will not stand for Trump being constrained or criticized by Republicans. That's why there are almost no remaining Republican elected officials who are willing to confront the Trump administration aside from a handful of lame ducks like Tillis and Massie.
Functionally, the Republican congress is unable to hold the Trump administration to account, because Republican voters have ensured that it cannot. The only way Trump will ever be constrained is via Democrats.
Trump's influence has been fading and history shows he'll have practically none as a lame duck. The spell is breaking. As they say, at first gradually then all at once.
Who knows what the future holds? Right now he can get away with anything: paying for partisan ads with taxpayer money, shaking down industry for bribes to pay for various monuments... There is no amount of corruption or incompetence that this Republican congress would not enable.
The majority of the Republican electorate demands an authoritarian leader unconstrained by the rule of law. Trump won't be the last.
At this point I think they're planning on letting Democrats sweep the midterms, having things get even worse over the next 2 years, which is inevitable, and blaming the entire thing on Democratic obstruction. Their voters are dumb enough to believe it.
If you want to be unreasonably sympathetic to the trump admin, they could be assuming that iran et al are trying to hold out until the election on the belief that that might change something (see also the timing of houthi offensive and attacks on saudi arabia), and that if trump get over the hump of the election, iran no longer has a way to affect anything short term and will throw in the towel as they lack the ability to hold out long term.
Personally i think trump does not have a plan, but if you tried to sanewash it, i think that is the best rationale i've been able to find.
I think the general interpretation that both sides think something will change after the midterms is reasonable.
But
Iran et al are trying to hold out until the election
[Iran will] throw in the towel as they lack the ability to hold out long term
is something that I don't think even the most thoughtless parts of the administration really think right?
It's obvious that Iran is winning, not close to throwing in the towel. The US is reduced to trying to get the Straights of Hormuz open without paying a toll to Iran, which is a worse position than the US was in at the start of the war.
That is not at all obvious. Iran's Hormuz leverage has proven much less effective than they had originally hoped for and now they are feeling the economic cost of the decision. The SPR is drawing at a rate of 400K bbl/wk over the past few weeks. That's not great, but very far from catastrophic and is sustainable for years at current level of 285 mmbbl. It was recently Iran that tried to get the US back to the negotiating table, not the other way around.
To be clear, im not predicting an imminent collapse.
However, countries win wars by projecting strength. Sometimes that is true, and sometimes that is bluffing. It is extremely hard to tell which is which from the outside.
We do know that Iran was looking shakey prior to this war, and that this war has taken a significant toll, especially economically.
Will that translate to something? idk. In many ways you would think that if it was going to, it would already have happened.
However i think sometimes westerners have a very america centric perspective. The costs being suffered here are pretty low for america. Price at the pump is slightly higher. America used up some of its interceptors. That is a pretty low cost. Sure american allies are getting pounded, which has long term impacts, but that is not something ordinary americans will feel. On the other hand Iranians are feeling huge costs, and the longer it goes on, the worse their bargaining position gets (e.g. people frak more, pipelines get built etc).
All this to say, i dont know what is going to happen, but the Iranian position is fragile, and gets more fragile with time. Anything could happen.
I wouldn't necessarily say Iran is walking away unscathed. From what I've read on Reuters and other places, they're having serious economic problems due to this blockade. They've had to start reducing subsidies for gas, and they deliberately started with the heaviest users because they're worried that their citizens are going to reach a point where they're going to snap.
Again, we don't really know all the facts on the ground, and we don't know what the breaking point is, but this is partly the U.S.'s strategy here. Seems like it is producing results because Iran is open to more negotiation as these past few weeks have passed. Why would they do this if they were walking away unscathed and winning?
On the flip side, though, I do concede that the US people have just not borne the brunt of the disaster yet. When that happens, they snap like a twig, only because they didn't support this war to begin with. Support was at a record low when the war began and continued to drop to this day.
In the end Iran's goal seems more attainable: Make this so painful for the US that they do not dare try this again for a long time if ever.
The US's goal was topple the regime, install their puppet and acquire the nuclear material. Now its just getting back to the JCPOA or something like it. Not good enough for Iran. They want to make sure this stops for good.
Yes it's very painful for Iran, but when have economic sanctions ever created regime change (Or whatever the US's actual goal is)?
The Iranian expats I talk to (who are all very very opposed to the Iranian regime) are depressed because their read is that the regime has increased support within Iran because of their success standing up to the US.
The sanctions have made Iran much closer to Russia and China though.
In the end Iran's goal seems more attainable: Make this so painful for the US that they do not dare try this again for a long time if ever.
The US's goal was topple the regime, install their puppet and acquire the nuclear material. Now its just getting back to the JCPOA or something like it. Not good enough for Iran. They want to make sure this stops for good.
I agree with this analysis. If the US could walk away with JCPOA back they'd love it (of course they couldn't call it the "Obama Iran deal" anymore, but putting that aside).
Iran seems to think they can get a more favorable deal because the US has no appetite to make this a long war. I think there is evidence to support that position.
Certainly, just like the Treasury is attempting to manipulate debt costs with their bond market interventions. Both are illusions of effort, both ineffective.
“Extend and pretend.” Luckily, we’re almost out of runway, both with oil and the bond market. Natural consequences are required to encourage improved outcomes.
(The war will not end until Iran decides to end it, just as Ukraine can lob drones at Russian refineries and oil terminals forever)
Also price of oil isn't the only factor. Refineries going offline is a major factor in price at the pump, and there are a lot of refineries in the middle east. Its not just the price of unrefined oil.
Project 2025 fairly implicitly stated that the idea was to scuttle trust in the US government so badly that there would be a case for private equity to swoop in and save the day.
That's what you're seeing.
Most of the draw down was after Russia invaded Ukraine. This drawdown is a swap of 1 barrel now for 1.25 barrels later. So the intention is to keep prices down now and get more oil back later for "free".
It's actually shocking that so many comments don't know that the biggest draw -by far- happened under the Biden administration largely as a result of the Ukrainian War. In 2020 when the SPR wasn't full and oil was literally negative, Congress blocked the administration from buying oil to fill it. Instead they used the SPR for short term storage for oil companies (which was not the administration's original proposal.)
I get the Iran war part (though the bigger issue there is middle distillerates rather then crude atm), but people were screaming about the SPR drawdown, and lack of buying for 4 years before Trump ever got back into office; and it fell completely on deaf ears.
Why not? They get profits, he gets to come back to power. Him being in power affords a streamlined approach to things like regime change in extraction targets like Venezuela.
In 2015 the SDR was authorized to sell $2 billion worth of oil during FY2017–2020 and use the proceeds for infrastructure upgrades and life-extension work at the reserve's aging storage facilities.
The Biden administration (and other countries around the world in the International Energy Agency) released reserves to try to stabilize the spikes in prices due to the Russian invasion of Ukraine.
On March 1, 2022, Secretary Granholm announced that the U.S. and its partners in the International Energy Agency (IEA) would release a total of 60 million barrels of oil onto the world market. [snip] In total, DOE released 180 million barrels of crude oil into the market.
I am frankly a bit bewildered by all this. The US administration lies and lies. The Iranians lie. Doomers keep talking about how gas prices will skyrocket "in two weeks". Occasionally the "everything is fine, nothing to see here" folks wheel out some journalist saying there will be a peace deal any day now.
It's pretty difficult to figure out what the reality is besides "not good".
In Canada gas is priced per liter. Long ago it was under $1.00 and everyone was wondering what will happen when the price goes above a dollar. Then the signs could only do up to 1.99. Then it went over $2. Don't worry. They'll change the signs and the pumps and everything. Cost of doing business.
Fun fact. Oil and gas prices aren't coupled as much as people think they are. I think these days about 50% of the cost is the oil. When oil goes up it's an excuse to raise prices. When oil price goes down nobody lowers gas prices. There's refining costs, distribution costs, taxes, and oh, let's not forget - PROFIT! (about 20%-30%, mostly for the oil companies, not the gas stations that have pretty low margins). Another thing to consider is that the oil refined into the gasoline you're buying at the pump was not bought at today's future contract prices. You can bet your *%# that the refineries are hedging and trying to keep their costs as low as possible while selling to you as high as possible. Their profit skyrockets when oil goes high. This also influences how much reserves and storage are available. The reserves, oil in transit, and other storage all act as buffers. Point is that's not as simple as it seems.
I'm so happy that I drive a Tesla. I haven't been in a gas station in years. Switch to EVs guys!
If anyone knew for sure they would make a killing at the stock market.
However we dont know what the future holds. All sorts of factors affect what is going to happen. Will china continue to import less? Will the houthis be able to stop Saudi exports long term or is it just a short term issue? Will USA be able to guard ships passing through the strait? Will Iran face some sort of internal collapse? Will USA pack up and go home? Will other countries be drawn into this war?
Nobody can tell you what is really "going on" because nobody knows what the future holds and uncertainty is high.
If I knew what I was doing (or asked a clever AI for help and trusted it) I would bet long on a transition off oil. Most countries other than the US are posturing for it, my retirement is in 30-40 years if I stay empoloyed, and I think even America will pick up solar in the long run.
I don't know a ton about business. But what I realize is companies should not be tied to their methods of their business. An oil company should be an energy company. A car company should be a transit company.
Tied to the discussion about DHH and Rails this week: I can kind of respect DHH saying implicitly "The days of Rails are waning due to LLMs". He's not attached to a framework, he's attached to an idea of people building apps easily.
It's happening in the US too. I mean this is the wet dream of climate activists. In Canada we had to put carbon tax on gasoline to get people off it. You're getting it for free man!
Solar solar solar! The US is perfect for solar. Do more solar. And drive EVs.
The nation where people drive these ridiculously huge trucks that guzzle gas like no tomorrow is complaining about gas prices. In Europe gas costs twice as much!
Check Polymarket. It's vastly more informative than news, let alone rhetoric from any side.
Everything is hyperbolized, but everything is also true. The Iran war is going horrifically and will likely destabilize oil prices for the foreseeable future. If nothing changes, it'd be catastrophic, but it will change. If necessary OPEC or Russia can be offered sweet deals to stabilize availability, the US could simply sign a favorable (for Iran) deal while waving a white flag emblazoned with "Mission Successful - Nukes Destroyed!" And so on.
So gas prices will not skyrocket, but they will also not stabilize. The current US administration will likely do poorly in the midterms, but that will probably change much less than might be expected. The political establishment loves war, and a war that's going badly puts them in a favorable position for a follow-up victory in 2028, which will otherwise be much closer to a typical coinflip. Though even with the Iran War still ongoing, it'd probably be a coinflip. Yay for polarization.
Anyhow, yeah. The world doesn't end with a bang, but a whimper.
The reserve is effectively empty at 250M-300M barrels, and currently sits at 284M. The rapid deceleration to 400K could mean that there’s no quick way to keep withdrawing the remaining reserves.
What Economist’s title? You mean the nytimes article? If so the comment here implies they are the oil power because they are shifting energy demands while the truth is that it’s because they are the largest buyer.
Essentially the Iran war is to control (i.e. reduce) oil going to China. As long as the straight of hormuz being closed restricts oil being sold/sent to China, tRump doesn't give a damn about other shortages as a result of the closure such as fertilizer which will see food skyrocket in price and many people starve.
The Iran War was predicated on a manufactured threat of them getting nuclear weapons. That's been the line for some time.
All reports about the initiation of the war was that Bibi wanted it and manipulated Trump to join in (against the advice of all of those around him warning that the very problem we have now would in fact occur).
It will need 10s - 100s of billions of investment. By the time they start producing, demand would have been permanently destroyed, thanks to China supplying the world with EVs and solar panels. With sufficient demand destruction, oil should be priced like salt, a simple commodity that nobody ever cares about the price.
Oil companies are not super keen on investing and increasing supply, it will destroy profits.
It's sour crude that requires special infrastructure that our oil companies don't even want to bother investing in. They told Trump as much, he still kidnapped President Maduro, who is as far as I know, still in New York City.
How quickly could it realistically be replenished if some kind of detente were reached and supply roughly returned to where it is was? Would replenishment contribute significantly to price pressure?
I imagine pretty slowly because it's not just the US drawing down their reserves but every country, and everyone is going to want to replenish it at the same time.
Indeed. The global production was closely aligned with consumption. Even if everything became normal tomorrow, there just isn’t enough slack capacity to make up for the loss over anything but years.
The Strait was moving 20M bpd. Say with some over production and clever rerouting, the world was only at a 10M bpd deficit. This has been happening for six months now or 180x10M bpd = 1800M barrels that were never taken out of the ground.
Chart of strategic reserve levels since 1982, for context
https://en.macromicro.me/charts/41674/us-strategic-petroleum...
Yikes.
That is just mind boggling.
Beware the Y axis not starting at 0. But it's still an insane drop.
Though note that, for some reason, the last 250M barrels are not physically extractable from the SPR, and the red line has dropped to 284M.
Source on that? Not doubting, just curious. If true that explains the Y axis starting there.
It’s in the article. They link to something explaining the range.
At first I thought that’s why the graph zeros where it does, but it’s Y axis starts at 200M.
The "for some reason" is that the caverns the oil is stored in are expected to become geologically unstable if they are emptied below a certain threshold. Extract below the 250 mark, and run the risk that they will collapse and cannot be refilled.
Not exactly "not physically extractable", but extractable only slowly, probably contaminated by water, in a way that is very expensive to refine.
People jump over the details in normal times, but then times get abnormal and impossible things start to happen.
i don't think extracting water from gasoline would be difficult at all, but probably plenty of other contaminants possible.
Mix a spoon of oil in a couple of glasses of water, add salt, put it a few minutes in a blender, and tell me how easy it is to retrieve the oil.
Now scale that to millions of barrels of oil every day.
It looks like it started to plummet in April 2022, which was on Biden's watch (disclaimer: I voted for him). It apparently was in response to supply chain shocks spiking oil prices due to the start of the war in Ukraine.
Having the AI summarize the pros and cons of that action has valid points on both sides. But in his defense, that particular war was not of our doing, unlike the current war with Iran which was initiated impulsively.
Trump spoke about this publicly, promising he would "fill the reserves right up to the top", then when in power, didn't do that but instead started a war with Iran while the reserves were still low.
It's mind boggling how stupid it all is.
:s/it all/he
I am not sure its stupid. My conspiracy theory is that Trump works/connected to US oil industry, who took control over Venezuela's oil and now printing record profits since all competition (Hormuz states, Russia) is suffering from infra damage.
Selling oil out of the SPR is the new One Weird Trick Military Planners Hate! Biden was a generally fine president, but pulling oil out of the SPR to balance the budget was an extremely ugly way to do it, and hopefully that loophole gets plugged going forward.
Hopefully, it hits effective zero, and people start buying EVs.
As a bonus, maybe the military will stop wasting gasoline to murder civilians, since we’ve already established they value oil over absolutely everything else, including human life.
EVs are just as toxic due to mining techniques used at the moment, and with no effective way to recycle batteries even if they last longer than expected they aren't really a way forward completely, and baseload electricity still relies on oil and natural gas since most countries have for some reason pushed away from Nuclear as a long term non-renewable (it IS technically not renewable).
I get your point and it's clear that sticks seem to be more effective than carrots, but our supply chains are not electrified and that will take time, in the meantime this pain will propagate widely.
That isn't why he did it, it was not "to balance the budget". It was to make up for the panic after Putin invaded Ukraine. US gasoline prices soared, going up to $4.84 per gallon in June 2022. Releasing the oil caused it to drop. It wasn't given away, it was sold. The reserve was on the way back up in 2024, through when Biden left office. Furthermore, the government turned a large profit: they sold oil when it soared in price, and bought it back at a lower price.
Biden supplied the genocide in Gaza and allowed 820k Americans to perish from COVID-19. Not a fine President.
Well... arguably it is partially our doing. Not for the reason's Tucker Carlson & Russia say, but that Obama and later Biden totally sat on their laurels after the Crimean invasion, totally paralyzed by fear of escalation and political fallout.
arguably and partially, perhaps a bit, but they have history to back up that reluctance.
That said, Putin's gonna do what Putin's gonna do and it likely wasn't the Crimean invasion that prompted it. It was the promise of waltzing in and just taking it without resistance.
In 2014, there was no political will in the US political system to do anything--witness Obama drawing the red line in Syria over the use of chemical weapons, and after Assad used them, Congress said "fuck off, we don't want to do anything." Given that Crimea was by far the most Russophile portion of Ukraine (it only veeeery barely voted to support Ukrainian independence in the Ukrainian independence referendum), it was much more difficult to build a case for any sort of intervention there than it would be after Syrian war crimes, and the latter wasn't enough to gain sufficient political will.
On top of that, 2014 is the 100th anniversary of the start of World War I, which means that all of the foreign policy people had been brushing up on their histories of World War I and the causes of said war, which is of course the ur-example of "random event escalates to every great power at war with each other." I definitely felt like a lone voice pointing out that I was getting more World War II vibes, with Putin acting like Hitler: "I just want a little bit of X, it's the last thing I'll ask for, I promise!"
Also, probably more important than the US reaction here is the German reaction, and Germany was in full Russian appeasement mode really right up until Russian tanks were literally rolling across the border in 2022.
The counterpoint is that the US is producing more crude domestically than ever with more efficient drilling technology:
https://www.oilmonster.com/article/more-productive-wells-spu...
Insofar as I can tell what's really reflected here is a difference between Democrat and Republican policy positions. The Democrats want to minimize domestic environmental impact and be a net oil importer. Let someone else handle the dirty work of drilling. The Republicans are less concerned with the environmental impact and want to increase exports, oil jobs and economic sovereignty. With higher domestic production and less dependence on foreign states, such a large petroleum reserve is unnecessary.
I prefer the Republican position. It sucks to harm the environment. But it sucks more to enable some of the regimes we import oil from. They frequently are not close allies. We frequently end up immersing ourself in wars and other entanglements over this foreign oil. You want to stop the wars, you have to stop the dependence on imported oil. (To be clear I'm not arguing that Republicans will start less wars, or are a more moral party. I am arguing in favor of domestic oil production because it removes a justification for war.)
The Democratic position exports the moral hazard to a place where Americans don't see it. Takes it out of their backyard. But frankly that is an immoral approach which both parties have taken repeatedly and it has undermined the health of the nation. The other case where this takes place at an absolutely massive scale is exporting certain types of jobs to other countries where labor standards are lax, and where slave labor takes place. People out there killed themselves while making iPhone or your shoes because the working conditions in those countries were so horrible. I am willing to pay a little more for shoes and buy a little bit fewer luxury goods so that I don't enable slave labor. Move the jobs back onshore where we can regulate the well being of the workers. We can't control it if it's in another country.
Your position appears to be based on crude production and drawing an equivalency between Middle East crude and US crude. They are unfortunately not equivalent. I agree that it’s amazing that the US doesn’t wholly depend on the Mideast for oil, but until we can process our own crude as cheaply as Mideast crude can be processed, strife in the Middle East will still push energy prices up.
The primary Democratic position is demand reduction, not importing. Also plenty of democrats have allowed drillibng and pipelines.
Whether or not I agree with your views, I thought your comment was thoughtfully constructed and am not sure why it's being downvoted.
Beware of well written statements that mask their fallacies. As a sibling comment points out, domestic oil production rose plenty during the Biden administration. Casting it as a democrat vs republican difference isn’t anywhere near the full story.
There is no political strategy story to be read into the drawdown of the SPR. Biden ("the democrats") drew it down by an even larger amount right after the invasion of Ukraine to stabilize prices, and now before it recovered Trump is drawing it down even further to stabilize prices from his new war.
This is not really supported by energy data. Under Biden/Harris, US crude production hit multiple consecutive all time highs and made the country a net exporter since 2020. In my world, that's the opposite of "minimizing domestic drilling." And producing oil doesn't prevent foreign wars; oil is a global commodity, energy markets are subject to global pricing events and disruptions anywhere drive up fuel prices in the US. Prices at the pump here don't care where crude was pumped. And the strange connection you draw between energy policy/oil reserves and offshore factory conditions conflates drastically different economic drivers. There is a real moral conversation to be had here about supply chain ethics but it doesn't get connected this way. This is a really shallow, cliche framing about [drilling vs importing] rather than [fossil fuel dominance vs clean energy transition], and drawing a preference to a party based on a faulty view of those is, disappointingly, Peak Political Affiliation 2026.
Let's also not pretend that the current Republican administration's insane military campaign to disrupt oil supply and markets, isn't helpful to, I don't know, say, Kremlin's oil and gas export revenues, and say, how higher global benchmark crude helps to, say, finance a domestic war economy while buffering against sanctions. Just a tiny thought to consider when holding a preference for Republican oil strategy.
Isn't US domestic oil exported to EU and others because its medium to light crude which US refineries are not calibrated for? Its my understanding US refineries are calibrated to refine Heavy crude which comes mainly from Canada and some from Venezuela.
If the Republicans actually had that position instead of being funded heavily by oil money they would be #1 Super Top Solar/Green energy party because that is the path to energy independence and to truly reduce the influence of OPEC - even outside of the fact that peak oil is over and it will continue to get more and more expensive to pull oil out of the earth. But they’re not because your assumptions are misplaced.
I don't think your interpretation of Democrat policies is correct. I've seen nothing regarding a desire to import oil rather than produce it domestically, something that is fundamentally different from declining to expand domestic production (we are already a net exporter after all).
The democrat position is more of, move off of oil to electrification, such that despite no expansion we never have to import, while simultaneously reducing that domestic impact.
So the Green New Deal was about enabling foreign oil producers?
About 40-45% of US petroleum use is burning it in passenger cars.
We're already a net exporter of oil; if we pushed a bigger fraction of cars and other transport uses to electrification we'd be a massive net exporter.
That wouldn't completely insulate us from global energy markets but it'd do a lot.
From my understanding they are running refineries at max utilization and not able to do required maintenance due to this crisis. This is what worries me about the October surprise. A couple of well timed "screw ups" caused by lack of maintenance when the whole system is already at its breaking point can spell trouble.
In relation to your first paragraph, do you think that in the world as a whole moving forward into the future there will be more economic growth in oil or in energy sectors involving solar, wind, batteries, and nuclear? How do you reconcile the economic potential of oil against the market data involving renewables? I.e., the reality of the data is showing that solar plus grid scale batteries are quickly on track to become cheaper than oil could ever promise to be, and that electric vehicles are clearly on track to beat gasoline in total cost of ownership.
Can we look at what China is doing and say that oil production is the growing future rather than a slowly declining industry with superior emerging alternatives?
Moving on to your second paragraph, isn’t oil dependence a big part of the cause with importing oil from problematic regimes? In other words, you can achieve energy independence by producing more energy, or using less energy. Energy in, energy out.
In that sense, don’t you think the Republican strategy leaves a lot to be desired? E.g., they just this week axed vehicle fuel efficiency standards, they aren’t encouraging domestic battery/EV manufacturing, they are against public transit projects, they are pro-suburb, pro-automobile, anti-urbanism, etc. I remember when John Kasich blocked high speed rail in Ohio, and the federal government was going to give them the funding! You drive between Cleveland and Columbus on I-71 and you’ll notice that it’s a 3-lane road for the entire 2-hour stretch and the traffic congestion never lets up unless it’s the middle of the night.
Domestic oil production is theoretically a solution but the global market isn’t really isolated like that. Even if America decides to be self-sufficient that doesn’t mean that prices will be low. Prices are low for goods when there is a widespread surplus of supplies. If the Iran war can spike gasoline prices almost double as they have in the past year or so, how will domestic production ever make up for that?
Finally, regarding your stance on slave labor. Perhaps we can make a positive argument to say that tariffs may in theory encourage more domestic production, bringing more goods production to a country with stronger labor laws. But now we are facing the cruel irony of US states moving the opposite direction on workers rights, doing things like toying with the idea of relaxing child labor laws. [1]
How good are US labor standards, really? This is a country with zero guaranteed paid parental leave, zero guaranteed paid time off (except in a small amount of states that have a minimum standard exceeding the federal standard — blue states like Illinois), and over 20 million residents with no health insurance coverage as well as the highest medical bankruptcy rate in the world.
When we talk about slave labor, are we talking about basic necessary medical care being conditional on continued employment? Are we talking about mothers going back to work 3 months after giving birth or sooner? Because that is America.
Fun fact: China has more mandatory paid holidays and leave days than the US.
[1] https://www.pbs.org/newshour/politics/some-lawmakers-propose...
I heard John Mearshimer say on a podcast that ~230k barrels, you can't go lower without damaging the caverns the oil is stored in, so we're pretty close to it being over.
We can simply get rid of most oil - Just ONE square mile of batteries and a TOTAL of 100 x 100 square miles of Solar can power the entire USA 24/7.
It is because of world wide adoption of EVs that the fossil fuel demand has reduced and stabilized gas prices in the US.
See : https://ember-energy.org/latest-insights/batteries-have-unlo...
looks like gasoline will skyrocket very soon very badly..
As has been predicted for months, I don’t recall where i read it but November has been in my brain for when this crisis is going to start.
Wrong. Dear Leader says gas prices will come down just after the election, when the US wins the war with Iran...for the 30th time.
So seriously, what is the administrations intention here? They’ve used all the missiles and drained all the gas. Are they trying to get the U.S. invaded?
Keep fuel prices low enough using the SPR to try to not lose at midterms. They don’t care what happens after, just as they don’t care about their constituents losing their Medicaid.
The cost of putting unsophisticated grifters in the ultimate position of power.
¯\_(ツ)_/¯
(Green New Deal via incompetence)
Shouldn't they at least care about the presidential election 2 years after that?
Why? He can’t run again or will die of natural causes, and the cult support goes with him when he goes.
https://x.com/LindseyGrahamSC/status/727604522156228608
I meant the Republican Party should care. I get why Trump doesn't.
most of them have been replaced, or are threatened to be replaced if they don't tow the party line.
It's not a traditional party in the American sense any more, there's no real policy making behind the scenes, it's basically the Trump family enriching itself and a rabid base enabling it. The institutional part that supposed to be the brain of the whole operation has left the building
The people in his admin certainly want to. It seems like Vance and Rubio are already subtley trying to position themselves for eventually running.
I don't share your optimism. I mean, yeah, he's doing to die soon, but his followers will just be suckered by the next con man who follows his playbook.
There have been a number of people who've tried to play some version of the Trump game. For whatever reason, he's the only one who ever got it to work. My theory is that it is because he has been a media presence, for better and worse, since the 1980s. Real estate, WWF, casinos, movies, reality TV, so much constant exposure. He's like the embodiment of 'no such thing as bad press'.
There have been Republican elected representatives who have confronted Trump. With very few exceptions, they have gone down to defeat in subsequent Republican primary elections.
The Republican electorate will not stand for Trump being constrained or criticized by Republicans. That's why there are almost no remaining Republican elected officials who are willing to confront the Trump administration aside from a handful of lame ducks like Tillis and Massie.
Functionally, the Republican congress is unable to hold the Trump administration to account, because Republican voters have ensured that it cannot. The only way Trump will ever be constrained is via Democrats.
Trump's influence has been fading and history shows he'll have practically none as a lame duck. The spell is breaking. As they say, at first gradually then all at once.
Who knows what the future holds? Right now he can get away with anything: paying for partisan ads with taxpayer money, shaking down industry for bribes to pay for various monuments... There is no amount of corruption or incompetence that this Republican congress would not enable.
The majority of the Republican electorate demands an authoritarian leader unconstrained by the rule of law. Trump won't be the last.
At this point I think they're planning on letting Democrats sweep the midterms, having things get even worse over the next 2 years, which is inevitable, and blaming the entire thing on Democratic obstruction. Their voters are dumb enough to believe it.
They aren't winning the midterms with this. Hopefully the grifter hopefuls will take the lesson to heart.
If you want to be unreasonably sympathetic to the trump admin, they could be assuming that iran et al are trying to hold out until the election on the belief that that might change something (see also the timing of houthi offensive and attacks on saudi arabia), and that if trump get over the hump of the election, iran no longer has a way to affect anything short term and will throw in the towel as they lack the ability to hold out long term.
Personally i think trump does not have a plan, but if you tried to sanewash it, i think that is the best rationale i've been able to find.
I think the general interpretation that both sides think something will change after the midterms is reasonable.
But
is something that I don't think even the most thoughtless parts of the administration really think right?
It's obvious that Iran is winning, not close to throwing in the towel. The US is reduced to trying to get the Straights of Hormuz open without paying a toll to Iran, which is a worse position than the US was in at the start of the war.
That is not at all obvious. Iran's Hormuz leverage has proven much less effective than they had originally hoped for and now they are feeling the economic cost of the decision. The SPR is drawing at a rate of 400K bbl/wk over the past few weeks. That's not great, but very far from catastrophic and is sustainable for years at current level of 285 mmbbl. It was recently Iran that tried to get the US back to the negotiating table, not the other way around.
Its not obvious.
To be clear, im not predicting an imminent collapse.
However, countries win wars by projecting strength. Sometimes that is true, and sometimes that is bluffing. It is extremely hard to tell which is which from the outside.
We do know that Iran was looking shakey prior to this war, and that this war has taken a significant toll, especially economically.
Will that translate to something? idk. In many ways you would think that if it was going to, it would already have happened.
However i think sometimes westerners have a very america centric perspective. The costs being suffered here are pretty low for america. Price at the pump is slightly higher. America used up some of its interceptors. That is a pretty low cost. Sure american allies are getting pounded, which has long term impacts, but that is not something ordinary americans will feel. On the other hand Iranians are feeling huge costs, and the longer it goes on, the worse their bargaining position gets (e.g. people frak more, pipelines get built etc).
All this to say, i dont know what is going to happen, but the Iranian position is fragile, and gets more fragile with time. Anything could happen.
I wouldn't necessarily say Iran is walking away unscathed. From what I've read on Reuters and other places, they're having serious economic problems due to this blockade. They've had to start reducing subsidies for gas, and they deliberately started with the heaviest users because they're worried that their citizens are going to reach a point where they're going to snap.
Again, we don't really know all the facts on the ground, and we don't know what the breaking point is, but this is partly the U.S.'s strategy here. Seems like it is producing results because Iran is open to more negotiation as these past few weeks have passed. Why would they do this if they were walking away unscathed and winning?
On the flip side, though, I do concede that the US people have just not borne the brunt of the disaster yet. When that happens, they snap like a twig, only because they didn't support this war to begin with. Support was at a record low when the war began and continued to drop to this day.
In the end Iran's goal seems more attainable: Make this so painful for the US that they do not dare try this again for a long time if ever.
The US's goal was topple the regime, install their puppet and acquire the nuclear material. Now its just getting back to the JCPOA or something like it. Not good enough for Iran. They want to make sure this stops for good.
Yes it's very painful for Iran, but when have economic sanctions ever created regime change (Or whatever the US's actual goal is)?
The Iranian expats I talk to (who are all very very opposed to the Iranian regime) are depressed because their read is that the regime has increased support within Iran because of their success standing up to the US.
The sanctions have made Iran much closer to Russia and China though.
I agree with this analysis. If the US could walk away with JCPOA back they'd love it (of course they couldn't call it the "Obama Iran deal" anymore, but putting that aside).
Iran seems to think they can get a more favorable deal because the US has no appetite to make this a long war. I think there is evidence to support that position.
SPR cannot meaningfully lower prices at the pump. It's simply not big enough. The only thing that does that is an end to the war.
Certainly, just like the Treasury is attempting to manipulate debt costs with their bond market interventions. Both are illusions of effort, both ineffective.
“Extend and pretend.” Luckily, we’re almost out of runway, both with oil and the bond market. Natural consequences are required to encourage improved outcomes.
(The war will not end until Iran decides to end it, just as Ukraine can lob drones at Russian refineries and oil terminals forever)
Iran and the Houthis both have to stop the war before all the Middle East supply chains start turning back on.
The US is winning on so many fronts these days, it’s getting hard to track. /s
Also price of oil isn't the only factor. Refineries going offline is a major factor in price at the pump, and there are a lot of refineries in the middle east. Its not just the price of unrefined oil.
Project 2025 fairly implicitly stated that the idea was to scuttle trust in the US government so badly that there would be a case for private equity to swoop in and save the day. That's what you're seeing.
I dunno, this seems like confirmation bias.
It is not.
Project 2025 can be anything you want it to be.
If only
So how exactly are they supposed to swoop in? With what?
Most of the draw down was after Russia invaded Ukraine. This drawdown is a swap of 1 barrel now for 1.25 barrels later. So the intention is to keep prices down now and get more oil back later for "free".
It's actually shocking that so many comments don't know that the biggest draw -by far- happened under the Biden administration largely as a result of the Ukrainian War. In 2020 when the SPR wasn't full and oil was literally negative, Congress blocked the administration from buying oil to fill it. Instead they used the SPR for short term storage for oil companies (which was not the administration's original proposal.)
I get the Iran war part (though the bigger issue there is middle distillerates rather then crude atm), but people were screaming about the SPR drawdown, and lack of buying for 4 years before Trump ever got back into office; and it fell completely on deaf ears.
Why???
IIRC Congress was blocking anything Biden or the opposing party wanted to put in place that they had the power to block, and refusing any compromise.
They’ve ruined us.
He is indistinguishable from an attack by hostile foreign agents. A very successful attack.
Brought to you by the epestein war
And winter is coming
Crude oil demand peaks in summer, not winter
Thos year’s drop is terrible, but we know the reason. Anybody know why the big drop in 2021-22?
Trump got all the oil producers together in a room and put together a deal to restrict oil production during COVID.
This, naturally, resulted in higher oil prices, which the Republican party blamed Biden for.
They truly have no shame.
But why?
Simple, he made it up.
Why not? They get profits, he gets to come back to power. Him being in power affords a streamlined approach to things like regime change in extraction targets like Venezuela.
This is not true. Don't make things up.
In 2015 the SDR was authorized to sell $2 billion worth of oil during FY2017–2020 and use the proceeds for infrastructure upgrades and life-extension work at the reserve's aging storage facilities.
There were also sales between 5 and 10M barrels a year to fund the "21st Century Cures Act" (https://www.npr.org/sections/health-shots/2016/11/25/5031763...)
The background to this was the increased domestic oil production which made the SDA seem less necessary.
https://www.eia.gov/todayinenergy/detail.php?id=29692
Same reason as today, trying to counter high energy prices.
It looks like there was a slow drop-off from about 2017 onward. The big drop started early 2022, likely related to Russia's invasion of Ukraine.
The Biden administration (and other countries around the world in the International Energy Agency) released reserves to try to stabilize the spikes in prices due to the Russian invasion of Ukraine.
https://www.energy.gov/hgeo/opr/history-spr-releases (look at 2022 IEA Coordinate Release)
I am frankly a bit bewildered by all this. The US administration lies and lies. The Iranians lie. Doomers keep talking about how gas prices will skyrocket "in two weeks". Occasionally the "everything is fine, nothing to see here" folks wheel out some journalist saying there will be a peace deal any day now.
It's pretty difficult to figure out what the reality is besides "not good".
Diesel touched $8.99/gal this week. I want to know what happens when the sign runs out of digits at $10.
Is it tied to the cash register? Will the pumps run out of digits too? Will they still be able to sell gas?
One thing I can say: My F150 won’t care. It runs off solar.
If you liked Y2K, you're gonna love 2.2f!
You mean 2.3. Gas prices all go down to tenths of a penny.
In Canada gas is priced per liter. Long ago it was under $1.00 and everyone was wondering what will happen when the price goes above a dollar. Then the signs could only do up to 1.99. Then it went over $2. Don't worry. They'll change the signs and the pumps and everything. Cost of doing business.
Fun fact. Oil and gas prices aren't coupled as much as people think they are. I think these days about 50% of the cost is the oil. When oil goes up it's an excuse to raise prices. When oil price goes down nobody lowers gas prices. There's refining costs, distribution costs, taxes, and oh, let's not forget - PROFIT! (about 20%-30%, mostly for the oil companies, not the gas stations that have pretty low margins). Another thing to consider is that the oil refined into the gasoline you're buying at the pump was not bought at today's future contract prices. You can bet your *%# that the refineries are hedging and trying to keep their costs as low as possible while selling to you as high as possible. Their profit skyrockets when oil goes high. This also influences how much reserves and storage are available. The reserves, oil in transit, and other storage all act as buffers. Point is that's not as simple as it seems.
I'm so happy that I drive a Tesla. I haven't been in a gas station in years. Switch to EVs guys!
The Simpson's had a nice take: https://www.youtube.com/watch?v=7dxVwA7bU2E
If anyone knew for sure they would make a killing at the stock market.
However we dont know what the future holds. All sorts of factors affect what is going to happen. Will china continue to import less? Will the houthis be able to stop Saudi exports long term or is it just a short term issue? Will USA be able to guard ships passing through the strait? Will Iran face some sort of internal collapse? Will USA pack up and go home? Will other countries be drawn into this war?
Nobody can tell you what is really "going on" because nobody knows what the future holds and uncertainty is high.
If I knew what I was doing (or asked a clever AI for help and trusted it) I would bet long on a transition off oil. Most countries other than the US are posturing for it, my retirement is in 30-40 years if I stay empoloyed, and I think even America will pick up solar in the long run.
I don't know a ton about business. But what I realize is companies should not be tied to their methods of their business. An oil company should be an energy company. A car company should be a transit company.
Tied to the discussion about DHH and Rails this week: I can kind of respect DHH saying implicitly "The days of Rails are waning due to LLMs". He's not attached to a framework, he's attached to an idea of people building apps easily.
It's happening in the US too. I mean this is the wet dream of climate activists. In Canada we had to put carbon tax on gasoline to get people off it. You're getting it for free man!
Solar solar solar! The US is perfect for solar. Do more solar. And drive EVs.
The nation where people drive these ridiculously huge trucks that guzzle gas like no tomorrow is complaining about gas prices. In Europe gas costs twice as much!
Check Polymarket. It's vastly more informative than news, let alone rhetoric from any side.
Everything is hyperbolized, but everything is also true. The Iran war is going horrifically and will likely destabilize oil prices for the foreseeable future. If nothing changes, it'd be catastrophic, but it will change. If necessary OPEC or Russia can be offered sweet deals to stabilize availability, the US could simply sign a favorable (for Iran) deal while waving a white flag emblazoned with "Mission Successful - Nukes Destroyed!" And so on.
So gas prices will not skyrocket, but they will also not stabilize. The current US administration will likely do poorly in the midterms, but that will probably change much less than might be expected. The political establishment loves war, and a war that's going badly puts them in a favorable position for a follow-up victory in 2028, which will otherwise be much closer to a typical coinflip. Though even with the Iran War still ongoing, it'd probably be a coinflip. Yay for polarization.
Anyhow, yeah. The world doesn't end with a bang, but a whimper.
The headline is hiding the fact that this was a fairly modest 400K bbl draw for the week.
The reserve is effectively empty at 250M-300M barrels, and currently sits at 284M. The rapid deceleration to 400K could mean that there’s no quick way to keep withdrawing the remaining reserves.
I do not buy that the SPR is effectively empty at 35-42% of capacity
Global oil prices haven't skyrocketed so far thanks to China inverting the OPEC strategy of keeping prices up by destroying supply.
China stopped/reduced buying, used their large reserves, EVs and now accelerating EV trucks. And also coal to liquids.
Eventually, China may have to start buying and thats when the fun begins.
https://www.nytimes.com/2026/09/17/business/energy-environme...
https://oilprice.com/Energy/Coal/Chinas-Renewable-Boom-Masks...
China is now the world’s great oil power. Forget OPEC. The Chinese Communist Party calls the shots. https://news.ycombinator.com/item?id=49238158
I was following until “China is now the world’s great oil power.” China imports a massive amount of oil and it’s at an all time high.
Thats the Economist's title on the article.
What Economist’s title? You mean the nytimes article? If so the comment here implies they are the oil power because they are shifting energy demands while the truth is that it’s because they are the largest buyer.
Essentially the Iran war is to control (i.e. reduce) oil going to China. As long as the straight of hormuz being closed restricts oil being sold/sent to China, tRump doesn't give a damn about other shortages as a result of the closure such as fertilizer which will see food skyrocket in price and many people starve.
The Iran War was predicated on a manufactured threat of them getting nuclear weapons. That's been the line for some time.
All reports about the initiation of the war was that Bibi wanted it and manipulated Trump to join in (against the advice of all of those around him warning that the very problem we have now would in fact occur).
We can simply get rid of most oil - Just ONE square mile of batteries and a TOTAL of 100 x 100 square miles of Solar can power the entire USA 24/7.
It is because of world wide adoption of EVs that the fossil fuel demand has reduced and stabilized gas prices in the US.
See : https://ember-energy.org/latest-insights/batteries-have-unlo...
how about the oil from Venezuela?
Will take years to make productive if anyone is even willing to invest in it.
It will need 10s - 100s of billions of investment. By the time they start producing, demand would have been permanently destroyed, thanks to China supplying the world with EVs and solar panels. With sufficient demand destruction, oil should be priced like salt, a simple commodity that nobody ever cares about the price.
Oil companies are not super keen on investing and increasing supply, it will destroy profits.
Turning Oil Into Salt: Energy Independence Through Fuel Choice: https://www.goodreads.com/en/book/show/6963043-turning-oil-i...
It's completely incompatible with the SPR
It's sour crude that requires special infrastructure that our oil companies don't even want to bother investing in. They told Trump as much, he still kidnapped President Maduro, who is as far as I know, still in New York City.
We can simply get rid of most oil - Just ONE square mile of batteries and a TOTAL of 100 x 100 square miles of Solar can power the entire USA 24/7.
It is because of world wide adoption of EVs that the fossil fuel demand has reduced and stabilized gas prices in the US.
See : https://ember-energy.org/latest-insights/batteries-have-unlo...
How quickly could it realistically be replenished if some kind of detente were reached and supply roughly returned to where it is was? Would replenishment contribute significantly to price pressure?
I imagine pretty slowly because it's not just the US drawing down their reserves but every country, and everyone is going to want to replenish it at the same time.
Indeed. The global production was closely aligned with consumption. Even if everything became normal tomorrow, there just isn’t enough slack capacity to make up for the loss over anything but years.
The Strait was moving 20M bpd. Say with some over production and clever rerouting, the world was only at a 10M bpd deficit. This has been happening for six months now or 180x10M bpd = 1800M barrels that were never taken out of the ground.
It does contribute to price pressure. The knowledge that the US has to buy oil to replenish will keep prices higher.
When oil prices spike, where does the money go? https://theconversation.com/when-oil-prices-spike-where-does...
Its possible Oil price might go higher. Oil Prices Ignore the Warning Signs in Physical Markets: https://oilprice.com/Energy/Energy-General/Oil-Prices-Ignore...