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.
https://en.macromicro.me/charts/41674/us-strategic-petroleum...
Highcharts.charts.forEach(chart => { if (chart) chart.yAxis.forEach(axis => axis.update({ min: 0 })); });People jump over the details in normal times, but then times get abnormal and impossible things start to happen.
Now scale that to millions of barrels of oil every day.
https://www.yahoo.com/news/us/articles/less-300-million-barr...
At first I thought that’s why the graph zeros where it does, but it’s Y axis starts at 200M.
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...
But first we’d need to develop four dimensional solar panels
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.
It's just incredibly dumb to start a war that will tank global petroleum supply chains before stocking back up.
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.
Also still plausible that Trump is managing to line his own pockets with the profits of that Venezuelan heavy crude being sent to Qatar.
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.
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.
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...)
But if Ukraine became prosperous and democratic it would make Putin look bad. Think West Germany against East Germany.
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.
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 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
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.
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.
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.
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.
" 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...
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.
https://apnews.com/article/joe-biden-climate-change-environm...
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.
Although remarkably there's been a lot of commie talk about nationalising the energy sector and not from the usual suspects...
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.
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
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).
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.
The cost of putting unsophisticated grifters in the ultimate position of power.
¯\_(ツ)_/¯
(Green New Deal via incompetence)
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.
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.
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.
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.
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.
> 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).
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.
The majority of the Republican electorate demands an authoritarian leader unconstrained by the rule of law. Trump won't be the last.
https://x.com/LindseyGrahamSC/status/727604522156228608
> If we nominate Trump, we will get destroyed.......and we will deserve it. —- Lindsey Graham, May 3, 2016
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
“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)
The US is winning on so many fronts these days, it’s getting hard to track. /s
I get the Iran war part (though the bigger issue there is middle distillerates rather then crude atm), but people were screaming about the SPR drawdown, and lack of buying for 4 years before Trump ever got back into office; and it fell completely on deaf ears.
Why???
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...
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.
Oil companies are not super keen on investing and increasing supply, it will destroy profits.
Turning Oil Into Salt: Energy Independence Through Fuel Choice: https://www.goodreads.com/en/book/show/6963043-turning-oil-i...
It 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...
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.
(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.
Also, the bottom of the reserve is mostly sludge.
> 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)
This, naturally, resulted in higher oil prices, which the Republican party blamed Biden for.
They truly have no shame.
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.
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.
It's pretty difficult to figure out what the reality is besides "not good".
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.
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.
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!
Just as a note, sadly the canadian consumer carbon tax was killed (the industrial carbon tax remains).
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.
Fun fact. Oil and gas prices aren't coupled as much as people think they are. I think these days about 50% of the cost is the oil. When oil goes up it's an excuse to raise prices. When oil price goes down nobody lowers gas prices. There's refining costs, distribution costs, taxes, and oh, let's not forget - PROFIT! (about 20%-30%, mostly for the oil companies, not the gas stations that have pretty low margins). Another thing to consider is that the oil refined into the gasoline you're buying at the pump was not bought at today's future contract prices. You can bet your *%# that the refineries are hedging and trying to keep their costs as low as possible while selling to you as high as possible. Their profit skyrockets when oil goes high. This also influences how much reserves and storage are available. The reserves, oil in transit, and other storage all act as buffers. Point is that's not as simple as it seems.
I'm so happy that I drive a Tesla. I haven't been in a gas station in years. Switch to EVs guys!
If you liked Y2K, you're gonna love 2.2f!
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.
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 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...