I’m guessing this is a result of 3 factors:
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Hormuz closure.
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Russian refineries getting blown up by Ukraine. (And then Russia using up what fuel it does still have in an attempt to alleviate shortages and keep the front lines supplied.)
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The US emptying out their strategic reserves in a desperate attempt to prevent gas prices from going even higher due to the former two.
Edit:
The scale of this graph is a bit deceptive, though. While a casual glance makes it look like it’s going almost down to zero, the vertical scale starts at 1,050,000. While the chart makes it look like it’s already gone down to almost nothing, it’s only gone down from ~1,275,000 to ~1,175,000. Obviously, it’s still significantly low when compared to previous years, but it has ‘only’ gone down by about 8% since the beginning of the year.
For a product with inelastic demand, that is very close to zero if you define zero as disruptions.
There’s a pretty big amount at the bottom of the SPR that’s unusable sludge.
Would you not rotate stock? I don’t know why any supply would be first-in-last-out. We shouldn’t be describing a reserve that is one container the size of a lake.
https://www.energy.gov/hgeo/opr/spr-quick-facts
“The Strategic Petroleum Reserve (SPR), owned and operated by the U.S. Department of Energy, is a federally managed network of four sites located along the Gulf Coasts of Texas and Louisiana. Each site contains deep underground storage caverns carved into natural salt domes, engineered to securely hold large volumes of crude oil.”
There are 61 total caverns.
I mean no one ever thought that putting it in a place where the integrity gets worse the less you have, so I’d imagine not a lot of thought is happening.
Also Saudi Arabia / OPEC selling low to undercut other sources to establish dominance on the market.
I wasn’t aware of it before I saw articles talking about how we are using so much of the SPR currently. But apparently using so much of it actually can cause the caves/caverns to warp and start various chunks of the walls to fall. So even if it isn’t factually about to run out, it is a big issue to be creating the “emergency” requiring pulling from it.
I guess it is a big win for the private companies that get the sellers market in government needing to fill it back up (and of course basically double-dip in profits from higher prices for normal use).
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Well, better get fracking… 🙄
or forcing poor countries to
Usually I would say that’s a good thing as I would read that to mean that you guys are less dependent on oil now, so you need to keep less storage of it.
Looking at what’s going on in the world I don’t think this is the result of any good development and could severely fuck up your economy.
Good luck!
Even demand destruction is a win if you’re radical enough (as an environmentalist or urbanist).
1050000 is not 0 though
