The good side about the current situation is that USA still has some oil that they are not drilling for, obviously for environment reasons but they are definitely looking at something that is profitable for them to recover if things get too heated. Oil is something that is getting higher in price without some cap that should have been there to begging with.
I understand that the price of oil has gone up due to this Russian war deal, but it has gone up so much that oil companies are making record breaking profits, which means that it didn't have to be this high, companies are taking advantage of the situation and nothing more, and they could stop that too.
Topic: America Has Lost Its Oil Buffer - page 2. (Read 352 times)
A big problem US is facing which nobody seems to dare to point out is that the amount of oil they used to steal from other countries has significantly decreased over the past 2 years.
You see, US is the biggest consumer of energy and they rely on importing oil. But for the past 20 years, due to invasion of oil rich countries like Iraq, Yemen and even Syria they have been stealing a ton of oil from them which they brought to US for domestic use.
But over the past 2 years their military positions in all those countries (specially around the oil facilities they illegally control) were being attacked hard to the point that they have lost almost all the oil they were stealing. According to CENTCOM the attacks have increased 400%. For example the output of Syrian oil has decreased more than 80% that's hundreds of thousands of barrels. So obviously they have to dip into the reserves and US oil itself is running out real fast to the point that experts predict that US is only going to have oil to extract for a couple of more years (best case scenario is 5 years).
The worst part is that the Americans have already fucked with anybody who has a lot of oil: Russia, Venezuela, Iran, ... Even the Saudis (aka the 51st US state) is shifting to the East.
The coming year or two will be very interesting in global politics to see if or how they are going to manage it this time.
You see, US is the biggest consumer of energy and they rely on importing oil. But for the past 20 years, due to invasion of oil rich countries like Iraq, Yemen and even Syria they have been stealing a ton of oil from them which they brought to US for domestic use.
But over the past 2 years their military positions in all those countries (specially around the oil facilities they illegally control) were being attacked hard to the point that they have lost almost all the oil they were stealing. According to CENTCOM the attacks have increased 400%. For example the output of Syrian oil has decreased more than 80% that's hundreds of thousands of barrels. So obviously they have to dip into the reserves and US oil itself is running out real fast to the point that experts predict that US is only going to have oil to extract for a couple of more years (best case scenario is 5 years).
The worst part is that the Americans have already fucked with anybody who has a lot of oil: Russia, Venezuela, Iran, ... Even the Saudis (aka the 51st US state) is shifting to the East.
The coming year or two will be very interesting in global politics to see if or how they are going to manage it this time.
With so many enemies made in the past, they have been making proposals to them even the President they once call terrorists. Germany had also tried repairing thier relationship with countries they were quarreling hoping to make a deal with oil, it's proof that we are really not prepared for what is coming. The electricity we use today is produced thru these fossil fuels we get from OPEC countries where we also plug the EVs. A few week ago, it's funny because they were restricting EVs to be recharged.
But it's still too unbelievable for US to have a low reserve because there are sources still like Syria, Canada or Venezuela.
A big problem US is facing which nobody seems to dare to point out is that the amount of oil they used to steal from other countries has significantly decreased over the past 2 years.
You see, US is the biggest consumer of energy and they rely on importing oil. But for the past 20 years, due to invasion of oil rich countries like Iraq, Yemen and even Syria they have been stealing a ton of oil from them which they brought to US for domestic use.
But over the past 2 years their military positions in all those countries (specially around the oil facilities they illegally control) were being attacked hard to the point that they have lost almost all the oil they were stealing. According to CENTCOM the attacks have increased 400%. For example the output of Syrian oil has decreased more than 80% that's hundreds of thousands of barrels. So obviously they have to dip into the reserves and US oil itself is running out real fast to the point that experts predict that US is only going to have oil to extract for a couple of more years (best case scenario is 5 years).
The worst part is that the Americans have already fucked with anybody who has a lot of oil: Russia, Venezuela, Iran, ... Even the Saudis (aka the 51st US state) is shifting to the East.
The coming year or two will be very interesting in global politics to see if or how they are going to manage it this time.
You see, US is the biggest consumer of energy and they rely on importing oil. But for the past 20 years, due to invasion of oil rich countries like Iraq, Yemen and even Syria they have been stealing a ton of oil from them which they brought to US for domestic use.
But over the past 2 years their military positions in all those countries (specially around the oil facilities they illegally control) were being attacked hard to the point that they have lost almost all the oil they were stealing. According to CENTCOM the attacks have increased 400%. For example the output of Syrian oil has decreased more than 80% that's hundreds of thousands of barrels. So obviously they have to dip into the reserves and US oil itself is running out real fast to the point that experts predict that US is only going to have oil to extract for a couple of more years (best case scenario is 5 years).
The worst part is that the Americans have already fucked with anybody who has a lot of oil: Russia, Venezuela, Iran, ... Even the Saudis (aka the 51st US state) is shifting to the East.
The coming year or two will be very interesting in global politics to see if or how they are going to manage it this time.
I don't think it's a big problem for the US. Especially with today's falling oil prices. Totzhe China can resell, at a cheap price, tighter Russian oil. If Urals today costs $66 per barrel (the spot price!), then China's price is already about $30 per barrel. And to play along with the United States, it is now very profitable for China - well, not to do business with losers ?! 
Quote
The Strategic Petroleum Reserve is at historically low levels, when there are still many supply uncertainties
Brace for impact: The U.S. is running out of a cushion reserved for oil shocks.
The U.S. Energy Information Administration said Wednesday that the Strategic Petroleum Reserve declined by nearly 7 million barrels in the week ended Sept. 16, leaving it at roughly 427 million barrels—the lowest since 1984. For the first time since 1983, the SPR now holds less oil than commercial storage.
The U.S. has been drawing from the reserve at a rapid pace this year. The Energy Department on Monday said it has released roughly 155 million barrels of crude oil since President Biden authorized a draw of up to 180 million barrels on March 31. That implies a draw of slightly less than 900,000 barrels a day, or nearly 1% of global oil demand. The DOE on Monday said it plans to sell up to 10 million barrels from the SPR in November, extending the SPR draw beyond the initial October target. That would leave only about 15 million barrels that could be sold under the emergency authorization.
Image link: https://i.ibb.co/vBhwFf5/spr-million-barrels.png
For Mr. Biden, who was looking to use the emergency authorization to lower pump prices, the move has been a near-term success, at least in the critical time leading up to the November midterm elections. Gasoline prices have declined steadily in the past three months and average $3.66 a gallon, down from a high of $5.03 in mid-June, according to GasBuddy.
Arguably, though, the release didn’t turn out to be necessary for energy security—the SPR’s stated purpose. The International Energy Agency initially thought Russia’s oil production would be cut by 3 million barrels a day after its invasion of Ukraine. Back then, there was at least a “perceived supply emergency” posed by Russia, said Bob McNally, president of the energy-consulting firm Rapidan Energy Group. That turned out to be a wild overestimate. As of August, Russia’s exports were down just 400,000 to 450,000 barrels a day from prewar levels, according to the latest IEA report. As Dan Pickering, chief investment officer at Pickering Energy Partners, puts it, “High prices are inconvenient. Lack of availability is a crisis.”
Depleted SPR levels leave the U.S. with fewer options in case of supply disruptions, which remain possible. To begin with, Russia’s oil exports will become a real wild card after Dec. 5, when the European Union’s import ban on Russian oil takes effect. By February 2023, the IEA expects Russia’s daily oil output to be 1.9 million barrels below preinvasion levels. While the Group of Seven nations agree on some form of price cap on Russian oil, what that mechanism will actually look like and how it will affect Russian supply are uncertain. On top of that, the Organization of the Petroleum Exporting Countries has repeatedly signaled that it will cut output if prices fall. It already did so—albeit in a symbolic way—earlier this month, pulling back 100,000 barrels a day. And then there are also demand-side risks in the form of a potential recession and further lockdowns in China.
With so many hazards just around the bend, the U.S. needs a fully functioning air bag. Alas, this one comes with diminished cushioning capacity. Though the president can technically authorize more SPR drawdowns, there will be a limit, given that the IEA has a minimum stockholding obligation for participating members. RBC Capital Markets previously pegged that number for the U.S. at roughly 315 million barrels. And the DOE will eventually have to replenish the SPR by the same amount that it drew this year, increasing future oil demand. A DOE spokesperson said replenishment won’t likely occur until September 2023.
Besides the short-term political gain, the SPR draw could turn out to have been a losing strategy however the supply-demand balance shakes out. If there is an actual oil shock and not enough oil in the SPR to cushion it, it would be a painful lesson on why the reserve exists in the first place. If there is no such shock, this year’s SPR draw might have set a precedent for politicized use in the future.
https://www.wsj.com/articles/america-has-lost-its-oil-buffer-11663821015
Brace for impact: The U.S. is running out of a cushion reserved for oil shocks.
The U.S. Energy Information Administration said Wednesday that the Strategic Petroleum Reserve declined by nearly 7 million barrels in the week ended Sept. 16, leaving it at roughly 427 million barrels—the lowest since 1984. For the first time since 1983, the SPR now holds less oil than commercial storage.
The U.S. has been drawing from the reserve at a rapid pace this year. The Energy Department on Monday said it has released roughly 155 million barrels of crude oil since President Biden authorized a draw of up to 180 million barrels on March 31. That implies a draw of slightly less than 900,000 barrels a day, or nearly 1% of global oil demand. The DOE on Monday said it plans to sell up to 10 million barrels from the SPR in November, extending the SPR draw beyond the initial October target. That would leave only about 15 million barrels that could be sold under the emergency authorization.
Image link: https://i.ibb.co/vBhwFf5/spr-million-barrels.png
For Mr. Biden, who was looking to use the emergency authorization to lower pump prices, the move has been a near-term success, at least in the critical time leading up to the November midterm elections. Gasoline prices have declined steadily in the past three months and average $3.66 a gallon, down from a high of $5.03 in mid-June, according to GasBuddy.
Arguably, though, the release didn’t turn out to be necessary for energy security—the SPR’s stated purpose. The International Energy Agency initially thought Russia’s oil production would be cut by 3 million barrels a day after its invasion of Ukraine. Back then, there was at least a “perceived supply emergency” posed by Russia, said Bob McNally, president of the energy-consulting firm Rapidan Energy Group. That turned out to be a wild overestimate. As of August, Russia’s exports were down just 400,000 to 450,000 barrels a day from prewar levels, according to the latest IEA report. As Dan Pickering, chief investment officer at Pickering Energy Partners, puts it, “High prices are inconvenient. Lack of availability is a crisis.”
Depleted SPR levels leave the U.S. with fewer options in case of supply disruptions, which remain possible. To begin with, Russia’s oil exports will become a real wild card after Dec. 5, when the European Union’s import ban on Russian oil takes effect. By February 2023, the IEA expects Russia’s daily oil output to be 1.9 million barrels below preinvasion levels. While the Group of Seven nations agree on some form of price cap on Russian oil, what that mechanism will actually look like and how it will affect Russian supply are uncertain. On top of that, the Organization of the Petroleum Exporting Countries has repeatedly signaled that it will cut output if prices fall. It already did so—albeit in a symbolic way—earlier this month, pulling back 100,000 barrels a day. And then there are also demand-side risks in the form of a potential recession and further lockdowns in China.
With so many hazards just around the bend, the U.S. needs a fully functioning air bag. Alas, this one comes with diminished cushioning capacity. Though the president can technically authorize more SPR drawdowns, there will be a limit, given that the IEA has a minimum stockholding obligation for participating members. RBC Capital Markets previously pegged that number for the U.S. at roughly 315 million barrels. And the DOE will eventually have to replenish the SPR by the same amount that it drew this year, increasing future oil demand. A DOE spokesperson said replenishment won’t likely occur until September 2023.
Besides the short-term political gain, the SPR draw could turn out to have been a losing strategy however the supply-demand balance shakes out. If there is an actual oil shock and not enough oil in the SPR to cushion it, it would be a painful lesson on why the reserve exists in the first place. If there is no such shock, this year’s SPR draw might have set a precedent for politicized use in the future.
https://www.wsj.com/articles/america-has-lost-its-oil-buffer-11663821015
....
This could signal a prelude to gasoline prices trending upwards in the states. SPR injection into america's fossil fuel industry was the only thing keeping prices at a maintainable level.
I'm curious to know what effect this might have upon china's exports to the USA. Large US retailers like amazon might also experience difficulties with their free shipping contracts, over the long term.
The following is an interesting point.
Quote
Russia’s oil exports will become a real wild card after Dec. 5, when the European Union’s import ban on Russian oil takes effect. By February 2023, the IEA expects Russia’s daily oil output to be 1.9 million barrels below preinvasion levels. While the Group of Seven nations agree on some form of price cap on Russian oil, what that mechanism will actually look like and how it will affect Russian supply are uncertain.
These points are very interesting as well:
Quote
Though the president can technically authorize more SPR drawdowns, there will be a limit, given that the IEA has a minimum stockholding obligation for participating members. RBC Capital Markets previously pegged that number for the U.S. at roughly 315 million barrels. And the DOE will eventually have to replenish the SPR by the same amount that it drew this year, increasing future oil demand. A DOE spokesperson said replenishment won’t likely occur until September 2023.
I wonder how long these trends will affect mainstream consciousness. Will people want to remember all these events that are happening. Or would they prefer to simply forget.
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