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.
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.
More directly, the US uses over 30 million acres to grow corn for biofuels. That's over 40,000 square miles, if I did my math right.
As https://en.wikipedia.org/wiki/Corn_ethanol points out, "Growing corn to fuel internal combustion vehicles is a highly inefficient use of land. A solar farm generating electricity to power an electric vehicle would power around 85 times as much distance as corn ethanol grown on the same area."
Yes, solar is far more efficient for generating power, but solar panels can't feed a population in a crisis.
The ethanol market isn't just about fuel, it acts as an economic buffer that keeps millions of acres of land fertile, farmed, and operational. If a global supply chain collapse hits, we can immediately redirect that acreage to feed livestock and people. If you cover that prime topsoil with solar panels, that agricultural capacity is gone. A nation that can feed itself has national security sacrificing our emergency food reserve for electricity is not a good idea.
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.
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.
Where they attacked because they wanted in on NATO, or the reverse?
"I need to attack Ukraine because you're trying to get it into NATO, at which point attacking it is impossible/much harder." ~Putin, probably
NATO can be criticized for a lot, Afghanistan for example, but despite hearing the argument that Russia attacking Ukraine is NATOs fault, it's never been coherent.
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.
« chemical weapons, and after Assad used them » — Well, he never did. I mean, what would he have accomplished by doing so? That was the “White Helmets” mise-en-scène for propaganda purposes. Remember Colin Powell brazenly lying to the UN (“flawed intel”, if you want to believe that) in order to justify another war on Iraq? Why believe Washington and London, given their track record?
Crimea even declared independence from the Ukraine in the first half of the 1990s.
« [WWI] the ur-example of "random event escalates to every great power at war with each other." » — It was neither a random event nor everyone at war with each other. Rather, Britain had started building an alliance wo wage war on Germany more than ten years before (Entente cordiale 1904, Triple entente 1907), and there was nothing “random” or “sleepwalking” (Clarke) about it. It was all very systematic, see Docherty & Macgregor, “Hidden History”.
« Germany was in full Russian appeasement mode » — Germany, as Russia's key partner, was in full deception mode, and while I think that in early 2015 Merkel still tried to avert and counter the US preparations to start a war about the Ukraine, not exactly being a strong leader, she folded under US pressure/terror (her “shaking attacks” perhaps somehow related), and then curiously renounced office and withdrew in 2021, because she definitely knew what was coming and probably didn't want to handle it. And if you listen to the Bundestag special Sunday session of Feb 25, 2022, it is patently clear, by the extent of what was announced, that there had been at least month-long preparations for this speaking event.
From my experience on this site, people will probably just “flag” this comment, but with a modicum of good will (which regrettably seem to be a scarce resource here) an interesting discussion (for “curiosity's” sake) could be held about how the Russian leadership, encouraged by an elaborate “con game” (where “con” stands for “confidence”), stupidly marched into the giant bear trap that had been prepared, of course under US leadership (hashtag #TrainToWin), starting at the latest in 2014, following the Maidan massacre and “most blatant coup in history” (some US observer whose name I'm forgetting), which was the true beginning of the war, cf. hired snipers interviewed by Gian Micalessin, Pyatt/Nuland and Ashton/Paet leaks (49761459=flgd, 49764198=dead), which should remind everyone that the US was not an innocent bystander but the key organizer of the Ukraine war, which incidentally is highly beneficial to the US and highly detrimental in a strategic sense to Germany, which continues to suffer from the usual weakness in leadership and inability or unwillingness to stand up.
I'm not interested and won't participate in any extended “flame wars” about this topic (or any other), but it would be good to see a reasoned argument instead of “flagging” and insults (which frankly is a kind of intellectual bankruptcy). I was told (49841897) that while “minority views” were appreciated on HN, special care had to be taken when presenting these in order not to “weaponize” them and enter “battle mode”, which is not my intention. Rather, it is to see an honest debate of an interesting topic, which in theory is possible.
Crimea isn't just Russophilic, the majority of the population even before 2014 were ethnic Russians, the majority language was Russian, and it was part of Russia until 1954.
People who make a big point about "Crimea is Ukraine!" are either ignorant or ideological, objectively it's at best debatable.
(And really, there should be no slavs there at all and it should be given back to the Tatars, if anyone really wants to get into the morals...)
My point is the 1991 borders are somewhat arbitrary: they were originally internal administrative divisions inside a larger centralised state.
They don't necessarily represent a natural long term international border, and attaching huge moral significance to the specific strokes of a Soviet bureaucrat's pen is strange
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.
>It looks like it started to plummet in April 2022, which was on Biden's watch. It apparently was in response to supply chain shocks spiking oil prices due to the start of the war in Ukraine.
it wasn't simply supply chain shocks, it was supply chain shocks in a time of rampant inflation caused by the endless stimulus checks and programs after Covid.
Supply chain shocks cause "legitimate" price increases, it's not "too many dollars chasing too few goods", rather the value of each dollar simply doesn't stretch as far any more, and while trying to hold the line on prices is a fool's errand, trying to make that case to the public in a time of rampant inflation is not going to succeed either
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.
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.
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.
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.
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).
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.
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.
>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.
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.
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.
Even top Democrats supported natural gas fracking.
"
President Barack Obama used his State of the Union speech to underscore the role of natural gas in transitioning to a lower-carbon nation, the White House indicated tonight.
According to a White House briefing document issued in conjunction with the speech, Obama’s agenda for natural gas includes a call for Congress to work with the administration to create new “Sustainable Shale Gas Growth Zones” to help “regions come together to make sure shale gas is developed in a safe, responsible way that helps build diverse and resilient regional economies that can withstand boom-and-bust cycles and can be leaders in building and deploying clean energy technologies.”
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.
This is not telling the full story. Biden tried to block new oil and gas leases, but he was blocked from doing so by the courts. Oil production was up not because of, but rather in spite of the Biden administration.
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.
There is no partisan 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.
Of course, the major difference is that Biden was responding to Russia invading Ukraine while Trump was responding to a conflict that he caused and started.
Certainly, just refuting GPs supposition that "Democrats want a big reserve so the US is dependent, Republicans want a small reserve because they want to be self-sufficient", since none of the numbers back it.
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.
US refineries are highly configurable and can refine any crude. They make more money refining difficult crude because they have the capability to handle it and many refineries do not, so naturally they prefer it for profitability reasons. The difference is extra refining steps that can be bypassed if they are not needed. Processing light sweet crude means some of their capital assets are sitting idle because they aren’t needed.
The US also exports its own crude for blending with other crude at foreign refineries. A refinery may not be able to process some types of crude but can process that crude if blended with a different type of crude to change its average properties. The limit to this for refineries is the cost of buying and shipping enough suitable blending crude to the refinery.
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.
Posts which appear to be thoughtfully constructed while actually just being entirely incorrect about the relevant facts are the most important to downvote, to signal to uninformed readers that they should perhaps not trust the post overly much.
If you retain any hope of the cessation of hostilities in the US's war with Iran causing a sudden and large dip in fuel prices, just remember that these stocks need to be rebuilt when all is said and done. And the US isn't the only country with rapidly depleting stocks requiring a post-war rebuild. Refining capacity aside -- there's a long road ahead for high prices.
Strategic petroleum reserves work best when there's strategy behind that which depletes them. It's difficult to see the US's strategy behind exposing itself in this way.
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.
You seem to basically understand that Trump is a chaotic fool yet you've still bought into the 4D chess explanation for this war.
Ignoring the reality that he let himself be talked into the Iran war by Israel, over strong US military objections. And suggesting instead he's secretly starting a war with China by cutting off oil to the entire far east.
A move which has only strengthened Chinas power in the region.
They would have recharged the reserves if that was really the reason and they would have readied themselves to the upcoming closure. They didn't expect the strait to be closed and got caught with their pants way down. Using the SPR is just another sign of how incompetent and out of options they are. It was already on a low level when the war started due to the previous withdrawals from the Russian war.
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).
> The Iran War was predicated on a manufactured threat of them getting nuclear weapons
its not entirely manufactured. The IAEA report was pretty clear they were violating the rules. It was almost certainly the most damning report the IAEA has ever made in their entire history.
But yes, the real reason for the war, is that the protests made Iran look weak, so they thought they had a limited-time opportunity to deal with a long term adversary. Iran's proxy strategy threatening US interests in the regions almost certainly had just as much to do with it as the nuclear issue.
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.
That article argued correctly that the World's greatest oil power is the one that has the greatest control upon oil price.
For now, that is China due to both high consumption and huge facilities for oil storage. They maintained a relatively low oil price until now, but they could rise the price of oil at any 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?
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".
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.
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.
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.
> Yes it's very painful for Iran, but when have economic sanctions ever created regime change (Or whatever the US's actual goal is)?
South Africa comes to mind.
More generally though, economic sanctions usually don't create regime change, they convince regimes to quietly change policies. Sometimes it works, sometimes it doesn't. However even if it doesn't work, it can weaken the regime to the point of irrelevance. Sanctions did not cause regime change in north korea, but it made them so poor that they weren't really a threat.
And really this isn't sanctions, this is a blockade which is sanctions on steriods.
> 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.
Who can hold out longer is the million dollar question. US clearly has no appetite for war, especially this one. Iran clearly is economically struggling (If it gets to the point where they can't pay the police or the populace cant afford food, things can get very bad very quickly). Long term the leverage on the strait will disappear as the market finds alternative.
So who is more on the clock? I guess time will tell.
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.
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.
When did lame duck change definition? It was supposed to be just the month or two after the election. Not most of the term of someone that's facing a term limit.
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.
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'.
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
To your point about replacement, it is evident to me Trump himself has orchestrated this thing over the past 11 years, as none of his associates have been part of the inner circle for that entire span of time.
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.
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)
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.
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.
Which is to say, you would need the world production to over produce by 10M bpd from previous levels for six months just to break even. That is not feasible. After this crisis, I suspect many governments will wish their SPRs were larger.
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.
If it can be used somewhere in place of other oil, then they can send the compatible oil to the reserve. So is this what Trump means by US oil companies returning 1.25 barrels for each 1 they take? Doubt he's really thought it through.
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.
There's already US infrastructure to process sour crude from Mexico. Who said this is a problem? When I search this, I see that Exxon's CEO called it uninvestible due to geopolitical risks, but Chevron claimed to be ready to go ahead.
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 I've read is that, the SPR was designed for a 25 year lifetime and 5 purge/fill cycles. It's now at 40 years and dozens of purge/fills, so it's way out of it's design parameters.
The problem is that as you pump oil and water in and out of it, in the intervening layer between the salt water and oil there forms a water/oil/impurities sludge which is useless (it ruins the pumping equipment). The thing is, they have no way of measuring it, nobody knows how much good oil is left and how much is sludge (or if they do, none of that information is public). And the closer you get to the sludge, the harder the good oil is to extract, slowing down the extraction pace.
I asked Claude to research for me so don’t take this as truth but it sounds like
(a) as the levels drop below 300M barrels, pumping out of the reserve is much less efficient, so we can’t necessarily draw it down as quickly as when it’s full. So the lower it gets, the less useful it is
And (b) there are a lot of varying estimates for the real effective floor, anywhere from the 180ish to 300M barrels is within the range of a safe minimum level.
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.
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.
> President Trump played a key role in the historic agreement between the world’s largest oil producers that trims global production by nearly 10 percent, according to Energy Secretary Dan Brouillette.
(If you think Fox is biased against him, I'd be happy to link a leftie source.)
> On 2 April, U.S. President Donald Trump, after significant internal pressure, called Saudi Arabian crown prince Mohammed bin Salman, threatening to withdraw U.S. military support if OPEC and its allies did not cut oil production.[32] The following day, Russian President Vladimir Putin ordered energy minister Alexander Novak to prepare an extraordinary OPEC meeting and stated that global production could be cut by 10 million barrels. In response to Putin's statement, oil prices jumped.[33] Even with a 10 million bpd cut, the International Energy Agency estimated that global oil stockpiles would still increase by 15 million bpd. IEA's director, Fatih Birol, stated that 50 million jobs related to oil refining and retail was at risk globally.[34] US oil prices increased by 25% on 2 April, the biggest one-day increase in history. Brent oil increased to $32 on 3 April.[35]
> On 9 April, Russia and Saudi Arabia agreed to oil production cuts. Reuters reported that "If Saudi Arabia failed to rein in output, US senators called on the White House to impose sanctions on Riyadh, pull out US troops from the kingdom and impose import tariffs on Saudi oil."[37]
It's his usual playbook. Cause a problem, blame someone else for it. The deal was for two years, and the relevant OPEC members adhered to it, and the price of oil skyrocketed.
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.
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".
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!
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!
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.
> US could simply sign a favorable (for Iran) deal while waving a white flag emblazoned with "Mission Successful
Trump is constitutionally[1] unable to do that. He cant compromise or look weak, or it'll conjure the ghost of Fred Trump calling him a loser one more time. Ironically, this fear of losing is how becomes a loser: first against(!) Covid-19, when he thought wearing a mask made him look weak, and now against Iran.
It'll be framed as a victory with some long speech about how we've secured the nukes, guaranteed the safety of the free world, liberty, democracy, blah blah blah.
Chart of strategic reserve levels since 1982, for context
https://en.macromicro.me/charts/41674/us-strategic-petroleum...
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.
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.
isn't that how we extract oilsands? by mixing it with hot water.
And they are very expensive to refine compared to Brent.
Source on that? Not doubting, just curious. If true that explains the Y axis starting there.
Good summary about the physical and statutory limits
https://www.yahoo.com/news/us/articles/less-300-million-barr...
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 red line is a percentage. Axis on the right.
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.
every time oil is removed the walls are damaged (because they pump in water to force out the oil, which dissolves more of the walls)
https://www.construction-physics.com/p/how-the-strategic-pet...
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...
> a TOTAL of 100 x 100 square miles of Solar
But first we’d need to develop four dimensional solar panels
So cover 6% of California in solar panels?
Or nearly all of Maryland?
Panels on every roof and batteries in every garage.
It's only about 1/6th the area of US lawns.
More directly, the US uses over 30 million acres to grow corn for biofuels. That's over 40,000 square miles, if I did my math right.
As https://en.wikipedia.org/wiki/Corn_ethanol points out, "Growing corn to fuel internal combustion vehicles is a highly inefficient use of land. A solar farm generating electricity to power an electric vehicle would power around 85 times as much distance as corn ethanol grown on the same area."
Yes, solar is far more efficient for generating power, but solar panels can't feed a population in a crisis.
The ethanol market isn't just about fuel, it acts as an economic buffer that keeps millions of acres of land fertile, farmed, and operational. If a global supply chain collapse hits, we can immediately redirect that acreage to feed livestock and people. If you cover that prime topsoil with solar panels, that agricultural capacity is gone. A nation that can feed itself has national security sacrificing our emergency food reserve for electricity is not a good idea.
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.
Stabilizing ourselves and our allies when an enemy attacks and disrupts petroleum supplies is why we have a strategic petroleum reserve.
It's just incredibly dumb to start a war that will tank global petroleum supply chains before stocking back up.
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.
> It's mind boggling how stupid it all is.
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.
Pumping up the oil price also helps Russia. Whatever they do manage to ship is still worth more.
Also still plausible that Trump is managing to line his own pockets with the profits of that Venezuelan heavy crude being sent to Qatar.
:s/it all/he
> that particular war was not of our doing
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.
We were trying to get Ukraine and Georgia into NATO. But this started well before Biden's or even Obama's term.
Where they attacked because they wanted in on NATO, or the reverse?
"I need to attack Ukraine because you're trying to get it into NATO, at which point attacking it is impossible/much harder." ~Putin, probably
NATO can be criticized for a lot, Afghanistan for example, but despite hearing the argument that Russia attacking Ukraine is NATOs fault, it's never been coherent.
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.
« chemical weapons, and after Assad used them » — Well, he never did. I mean, what would he have accomplished by doing so? That was the “White Helmets” mise-en-scène for propaganda purposes. Remember Colin Powell brazenly lying to the UN (“flawed intel”, if you want to believe that) in order to justify another war on Iraq? Why believe Washington and London, given their track record?
Crimea even declared independence from the Ukraine in the first half of the 1990s.
« [WWI] the ur-example of "random event escalates to every great power at war with each other." » — It was neither a random event nor everyone at war with each other. Rather, Britain had started building an alliance wo wage war on Germany more than ten years before (Entente cordiale 1904, Triple entente 1907), and there was nothing “random” or “sleepwalking” (Clarke) about it. It was all very systematic, see Docherty & Macgregor, “Hidden History”.
« Germany was in full Russian appeasement mode » — Germany, as Russia's key partner, was in full deception mode, and while I think that in early 2015 Merkel still tried to avert and counter the US preparations to start a war about the Ukraine, not exactly being a strong leader, she folded under US pressure/terror (her “shaking attacks” perhaps somehow related), and then curiously renounced office and withdrew in 2021, because she definitely knew what was coming and probably didn't want to handle it. And if you listen to the Bundestag special Sunday session of Feb 25, 2022, it is patently clear, by the extent of what was announced, that there had been at least month-long preparations for this speaking event.
From my experience on this site, people will probably just “flag” this comment, but with a modicum of good will (which regrettably seem to be a scarce resource here) an interesting discussion (for “curiosity's” sake) could be held about how the Russian leadership, encouraged by an elaborate “con game” (where “con” stands for “confidence”), stupidly marched into the giant bear trap that had been prepared, of course under US leadership (hashtag #TrainToWin), starting at the latest in 2014, following the Maidan massacre and “most blatant coup in history” (some US observer whose name I'm forgetting), which was the true beginning of the war, cf. hired snipers interviewed by Gian Micalessin, Pyatt/Nuland and Ashton/Paet leaks (49761459=flgd, 49764198=dead), which should remind everyone that the US was not an innocent bystander but the key organizer of the Ukraine war, which incidentally is highly beneficial to the US and highly detrimental in a strategic sense to Germany, which continues to suffer from the usual weakness in leadership and inability or unwillingness to stand up.
I'm not interested and won't participate in any extended “flame wars” about this topic (or any other), but it would be good to see a reasoned argument instead of “flagging” and insults (which frankly is a kind of intellectual bankruptcy). I was told (49841897) that while “minority views” were appreciated on HN, special care had to be taken when presenting these in order not to “weaponize” them and enter “battle mode”, which is not my intention. Rather, it is to see an honest debate of an interesting topic, which in theory is possible.
Crimea isn't just Russophilic, the majority of the population even before 2014 were ethnic Russians, the majority language was Russian, and it was part of Russia until 1954.
People who make a big point about "Crimea is Ukraine!" are either ignorant or ideological, objectively it's at best debatable.
(And really, there should be no slavs there at all and it should be given back to the Tatars, if anyone really wants to get into the morals...)
Countries can have different ethnicities, political parties and religions.
But if Ukraine became prosperous and democratic it would make Putin look bad. Think West Germany against East Germany.
Yes but that's sort of a different argument.
My point is the 1991 borders are somewhat arbitrary: they were originally internal administrative divisions inside a larger centralised state.
They don't necessarily represent a natural long term international border, and attaching huge moral significance to the specific strokes of a Soviet bureaucrat's pen is strange
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.
>It looks like it started to plummet in April 2022, which was on Biden's watch. It apparently was in response to supply chain shocks spiking oil prices due to the start of the war in Ukraine.
it wasn't simply supply chain shocks, it was supply chain shocks in a time of rampant inflation caused by the endless stimulus checks and programs after Covid.
Supply chain shocks cause "legitimate" price increases, it's not "too many dollars chasing too few goods", rather the value of each dollar simply doesn't stretch as far any more, and while trying to hold the line on prices is a fool's errand, trying to make that case to the public in a time of rampant inflation is not going to succeed either
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.
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.
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.
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.
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).
Yikes.
That is just mind boggling.
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.
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.
>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.
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.
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.
Even top Democrats supported natural gas fracking.
" President Barack Obama used his State of the Union speech to underscore the role of natural gas in transitioning to a lower-carbon nation, the White House indicated tonight.
According to a White House briefing document issued in conjunction with the speech, Obama’s agenda for natural gas includes a call for Congress to work with the administration to create new “Sustainable Shale Gas Growth Zones” to help “regions come together to make sure shale gas is developed in a safe, responsible way that helps build diverse and resilient regional economies that can withstand boom-and-bust cycles and can be leaders in building and deploying clean energy technologies.”
"
https://www.politico.com/blogs/politico-now/2014/01/obama-to...
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.
This is not telling the full story. Biden tried to block new oil and gas leases, but he was blocked from doing so by the courts. Oil production was up not because of, but rather in spite of the Biden administration.
https://apnews.com/article/joe-biden-climate-change-environm...
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.
There is no partisan 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.
Of course, the major difference is that Biden was responding to Russia invading Ukraine while Trump was responding to a conflict that he caused and started.
Certainly, just refuting GPs supposition that "Democrats want a big reserve so the US is dependent, Republicans want a small reserve because they want to be self-sufficient", since none of the numbers back it.
The US is a capitalist country oil companies will sell the oil to whomever pays the most. Tankers go vroom.
Although remarkably there's been a lot of commie talk about nationalising the energy sector and not from the usual suspects...
So the Green New Deal was about enabling foreign oil producers?
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.
US refineries are highly configurable and can refine any crude. They make more money refining difficult crude because they have the capability to handle it and many refineries do not, so naturally they prefer it for profitability reasons. The difference is extra refining steps that can be bypassed if they are not needed. Processing light sweet crude means some of their capital assets are sitting idle because they aren’t needed.
The US also exports its own crude for blending with other crude at foreign refineries. A refinery may not be able to process some types of crude but can process that crude if blended with a different type of crude to change its average properties. The limit to this for refineries is the cost of buying and shipping enough suitable blending crude to the refinery.
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.
Indeed you should beware: https://apnews.com/article/joe-biden-climate-change-environm...
Posts which appear to be thoughtfully constructed while actually just being entirely incorrect about the relevant facts are the most important to downvote, to signal to uninformed readers that they should perhaps not trust the post overly much.
If you retain any hope of the cessation of hostilities in the US's war with Iran causing a sudden and large dip in fuel prices, just remember that these stocks need to be rebuilt when all is said and done. And the US isn't the only country with rapidly depleting stocks requiring a post-war rebuild. Refining capacity aside -- there's a long road ahead for high prices.
Strategic petroleum reserves work best when there's strategy behind that which depletes them. It's difficult to see the US's strategy behind exposing itself in this way.
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
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.
You seem to basically understand that Trump is a chaotic fool yet you've still bought into the 4D chess explanation for this war.
Ignoring the reality that he let himself be talked into the Iran war by Israel, over strong US military objections. And suggesting instead he's secretly starting a war with China by cutting off oil to the entire far east.
A move which has only strengthened Chinas power in the region.
It's recursively stupid all the way down.
They would have recharged the reserves if that was really the reason and they would have readied themselves to the upcoming closure. They didn't expect the strait to be closed and got caught with their pants way down. Using the SPR is just another sign of how incompetent and out of options they are. It was already on a low level when the war started due to the previous withdrawals from the Russian war.
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).
> The Iran War was predicated on a manufactured threat of them getting nuclear weapons
its not entirely manufactured. The IAEA report was pretty clear they were violating the rules. It was almost certainly the most damning report the IAEA has ever made in their entire history.
But yes, the real reason for the war, is that the protests made Iran look weak, so they thought they had a limited-time opportunity to deal with a long term adversary. Iran's proxy strategy threatening US interests in the regions almost certainly had just as much to do with it as the nuclear issue.
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.
That article argued correctly that the World's greatest oil power is the one that has the greatest control upon oil price.
For now, that is China due to both high consumption and huge facilities for oil storage. They maintained a relatively low oil price until now, but they could rise the price of oil at any 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?
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.
So how exactly are they supposed to swoop in? With what?
I dunno, this seems like confirmation bias.
It is not.
Confirmation bias of what? Project 2025 and the Heritage Foundation's effort as a think-tank is pretty much a baby-stepped blueprint.
Project 2025 can be anything you want it to be.
You can literally just go read it. They’re very explicit about both their goals and how they intended to achieve them.
If only
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".
How is that intention going to stop the war with Iran and open the strait of Hormuz?
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)
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.
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.
> 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.
> Yes it's very painful for Iran, but when have economic sanctions ever created regime change (Or whatever the US's actual goal is)?
South Africa comes to mind.
More generally though, economic sanctions usually don't create regime change, they convince regimes to quietly change policies. Sometimes it works, sometimes it doesn't. However even if it doesn't work, it can weaken the regime to the point of irrelevance. Sanctions did not cause regime change in north korea, but it made them so poor that they weren't really a threat.
And really this isn't sanctions, this is a blockade which is sanctions on steriods.
> 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.
Who can hold out longer is the million dollar question. US clearly has no appetite for war, especially this one. Iran clearly is economically struggling (If it gets to the point where they can't pay the police or the populace cant afford food, things can get very bad very quickly). Long term the leverage on the strait will disappear as the market finds alternative.
So who is more on the clock? I guess time will tell.
Iran is mostly self-sufficient in food. I don't think there is social license in the West to starve a civilian population.
> So who is more on the clock? I guess time will tell.
Well we know the US's deadlines. The midterms are one, and in 2 years time US policy will change (although unclear how exactly).
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.
Shouldn't they at least care about the presidential election 2 years after that?
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.
When did lame duck change definition? It was supposed to be just the month or two after the election. Not most of the term of someone that's facing a term limit.
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.
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
> If we nominate Trump, we will get destroyed.......and we will deserve it. —- Lindsey Graham, May 3, 2016
>He can’t run again
I am afraid we can't really be sure about this.
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'.
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
To your point about replacement, it is evident to me Trump himself has orchestrated this thing over the past 11 years, as none of his associates have been part of the inner circle for that entire span of time.
They aren't winning the midterms with this. Hopefully the grifter hopefuls will take the lesson to heart.
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.
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.
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
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.
> In 2020 when the SPR wasn't full and oil was literally negative, Congress blocked the administration from buying oil to fill it
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.
Trump proposed filing it up in 2020 but Democrats complained about climate change.
Biden was not the president in 2020.
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...
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.
They'll push that date to November 4 any way they can.
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.
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.
Which is to say, you would need the world production to over produce by 10M bpd from previous levels for six months just to break even. That is not feasible. After this crisis, I suspect many governments will wish their SPRs were larger.
It does contribute to price pressure. The knowledge that the US has to buy oil to replenish will keep prices higher.
And winter is coming
Crude oil demand peaks in summer, not winter
how about the oil from Venezuela?
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...
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...
Will take years to make productive if anyone is even willing to invest in it.
It's completely incompatible with the SPR
If it can be used somewhere in place of other oil, then they can send the compatible oil to the reserve. So is this what Trump means by US oil companies returning 1.25 barrels for each 1 they take? Doubt he's really thought it through.
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.
There's already US infrastructure to process sour crude from Mexico. Who said this is a problem? When I search this, I see that Exxon's CEO called it uninvestible due to geopolitical risks, but Chevron claimed to be ready to go ahead.
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
What I've read is that, the SPR was designed for a 25 year lifetime and 5 purge/fill cycles. It's now at 40 years and dozens of purge/fills, so it's way out of it's design parameters.
The problem is that as you pump oil and water in and out of it, in the intervening layer between the salt water and oil there forms a water/oil/impurities sludge which is useless (it ruins the pumping equipment). The thing is, they have no way of measuring it, nobody knows how much good oil is left and how much is sludge (or if they do, none of that information is public). And the closer you get to the sludge, the harder the good oil is to extract, slowing down the extraction pace.
I asked Claude to research for me so don’t take this as truth but it sounds like
(a) as the levels drop below 300M barrels, pumping out of the reserve is much less efficient, so we can’t necessarily draw it down as quickly as when it’s full. So the lower it gets, the less useful it is
And (b) there are a lot of varying estimates for the real effective floor, anywhere from the 180ish to 300M barrels is within the range of a safe minimum level.
Read up on the why, I didn't get it either. Its fascinating though, basically the caverns would collapse.
Also, the bottom of the reserve is mostly sludge.
They’ve ruined us.
He is indistinguishable from an attack by hostile foreign agents. A very successful attack.
Thos year’s drop is terrible, but we know the reason. Anybody know why the big drop in 2021-22?
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.
https://www.energy.gov/hgeo/opr/history-spr-releases (look at 2022 IEA Coordinate Release)
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.
Same reason as today, trying to counter high energy prices.
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.
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
> This is not true. Don't make things up.
It is absolutely true.
https://www.foxbusiness.com/markets/trump-saudi-arabia-russi...
> President Trump played a key role in the historic agreement between the world’s largest oil producers that trims global production by nearly 10 percent, according to Energy Secretary Dan Brouillette.
https://en.wikipedia.org/wiki/2020_Russia%E2%80%93Saudi_Arab...
(If you think Fox is biased against him, I'd be happy to link a leftie source.)
> On 2 April, U.S. President Donald Trump, after significant internal pressure, called Saudi Arabian crown prince Mohammed bin Salman, threatening to withdraw U.S. military support if OPEC and its allies did not cut oil production.[32] The following day, Russian President Vladimir Putin ordered energy minister Alexander Novak to prepare an extraordinary OPEC meeting and stated that global production could be cut by 10 million barrels. In response to Putin's statement, oil prices jumped.[33] Even with a 10 million bpd cut, the International Energy Agency estimated that global oil stockpiles would still increase by 15 million bpd. IEA's director, Fatih Birol, stated that 50 million jobs related to oil refining and retail was at risk globally.[34] US oil prices increased by 25% on 2 April, the biggest one-day increase in history. Brent oil increased to $32 on 3 April.[35]
> On 9 April, Russia and Saudi Arabia agreed to oil production cuts. Reuters reported that "If Saudi Arabia failed to rein in output, US senators called on the White House to impose sanctions on Riyadh, pull out US troops from the kingdom and impose import tariffs on Saudi oil."[37]
It's his usual playbook. Cause a problem, blame someone else for it. The deal was for two years, and the relevant OPEC members adhered to it, and the price of oil skyrocketed.
But why?
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.
Simple, he made it up.
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".
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!
> In Canada we had to put carbon tax on gasoline to get people off it.
Just as a note, sadly the canadian consumer carbon tax was killed (the industrial carbon tax remains).
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.
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!
> . I want to know what happens when the sign runs out of digits at $10.
If you liked Y2K, you're gonna love 2.2f!
You mean 2.3. Gas prices all go down to tenths of a penny. :)
The Simpson's had a nice take: https://www.youtube.com/watch?v=7dxVwA7bU2E
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.
> US could simply sign a favorable (for Iran) deal while waving a white flag emblazoned with "Mission Successful
Trump is constitutionally[1] unable to do that. He cant compromise or look weak, or it'll conjure the ghost of Fred Trump calling him a loser one more time. Ironically, this fear of losing is how becomes a loser: first against(!) Covid-19, when he thought wearing a mask made him look weak, and now against Iran.
1. His make up, not the document
It'll be framed as a victory with some long speech about how we've secured the nukes, guaranteed the safety of the free world, liberty, democracy, blah blah blah.
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...