Oil 2022/23
The emptying of the U.S. Strategic Petroleum Reserve (SPR) will be an issues in the future. The U.S. established the SPR after the 1973 oil embargo. It consists of 60 large salt caverns spread across four states. In total, it can hold as much as 727 million barrels of oil. It was intended to insulate the U.S. from oil supply shocks. Certain key industries – and the U.S. military – had access to this oil in times of national emergency. When the price didn’t cooperate, Biden unleashed the taps. He pledged to release 180 million barrels of oil in six months starting in April. You can see what effect that had on oil prices in the chart above. Today, the SPR sits at its lowest level in about 40 years. The White House claims it plans to refill the SPR when oil prices are consistently around $70 a barrel. That effectively puts a floor on that price. However, there are some monsters lurking in the shadows waiting to wreak havoc on the oil market. While asking them to pump more oil, it si...