The Strategic Petroleum Reserve hit its lowest level since 1983. Analysts credited the depletion to "using the oil." Revolutionary stuff.
The Iran deal arrived just in time, which means it didn't arrive just in time because if it had arrived just in time the reserve wouldn't have hit its lowest level since 1983. Words mean things. Apparently not to oil executives.
These same executives warned that global inventories are rapidly depleting due to supply disruption triggered by the Iran war. The war triggered the disruption. The disruption depleted the inventories. The inventories required a deal. The deal came just in time, except forty-three years too late. This is what passes for crisis management when you've spent four decades assuming oil regenerates like a f*cking lizard tail.
Retail traders saw this headline and bought oil futures at the top. They always do. They read "lowest level since 1983" and think they've discovered scarcity pricing. They haven't discovered anything. Scarcity was priced in when the reserve dropped below 1984 levels. And 1985 levels. And every subsequent year until someone in Washington remembered we store oil for reasons.
The reserve exists because someone in 1975 had the wild idea that America might need oil during a crisis. Forty-eight years later we used it all and called an emergency meeting. The Iranians bailed us out. The country we've sanctioned for decades just saved our strategic reserve by agreeing to sell us the thing we claim to produce more of than anyone else.
But sure, the deal came just in time. Just in time for what? Just in time to prevent us from admitting we drained the emergency supply to fix gas prices before a midterm election that already happened four years ago?
Photo by sina drakhshani on Unsplash
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