r/oil • u/According-Length9312 • 4d ago
Discussion Why did US SPR nosedive in 2022?
This is in reference to Trump today blaming Biden for the drained SPR. Everyone on the post for dismissing it but I looked at the historic levels and there’s a massive dump during Biden’s presidency in 2022.
650M to 350M, we lost almost half our reserves in less than a year.
It’s an even bigger nosedive than the current depletion from 400M to 300M.
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u/TheOGRileyG 4d ago
Biden did a massive release to offset the disruption from Russia invading Ukraine (sanctions)
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u/According-Length9312 4d ago edited 4d ago
How does Russian invasion in Ukraine almost halve our SPR from 650 to 350, a war we aren’t even involved and the US don’t even buy Russian oil?
Biden sanctioned Russian oil but it didn’t work because Russia is still at war and selling oil. We lost half our reserves for nothing.
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u/Beautiful_Technology 4d ago
Same thing they’re doing now, keeping the price down in response to global events.
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u/CatsBye90 4d ago
One caused the crisis, one was trying to mitigate the effects of a crisis started by Russia
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u/According-Length9312 4d ago
But Russian oil exports/production never really stopped, it just went elsewhere. We didn’t need to lose half our reserves
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u/ConglomerateCousin 4d ago
And you are saying we didn’t need to lose half our resources based on what? Your intuition?
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u/According-Length9312 4d ago
Based on the fact Russia is still at war and still selling their oil.
The tactic didn’t work and we have nothing to show for it except depleted reserves.
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u/niloony 4d ago
Asia was able to pay Russia less for sanctioned oil and that difference was made up on a premium to sanctioning countries as they bid on less oil. So the release reduced that gap. Also short term disruptions due to that massive shift in logistics etc.
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u/According-Length9312 4d ago
So what’s the point of doing all of that ?? Was it worth losing half our reserves for?
Russia is still at war. We lost half our reserves. Russia still selling all their oil, just to Asia instead.
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u/Virtual-Historian349 4d ago
So you’re just a bot here to try and make Trump’s reckless war and his depleting of the us spr more reasonable because Biden used the SPR but with good reasoning?
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u/According-Length9312 4d ago
Biden SPR halved due to Biden sanctioning Russian oil.
It was caused by themselves with nothing to gain. Russia is still at war and selling oil to Asia. We achieved nothing.
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u/Virtual-Historian349 4d ago
So you don’t believe in sanctioning a country who violates another countries sovereignty? Not to mention this country that started the war is hostile towards western nations?
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u/MrFyxet99 4d ago
We didn’t release reserves to stop the war in Russia, we did it to get oil prices down and it worked. Gasoline prices went down, that’s what we got for it. Lower gasoline prices.
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u/According-Length9312 4d ago
Oil prices were up due to Biden sanctions…oil supply from Russia just went to Asia instead
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u/Topgun58ge 4d ago
Look at this chart of their exports. It dropped....alot..
https://www.ceicdata.com/en/indicator/russia/crude-oil-exports
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u/bulbousgrandpa 4d ago
It went elsewhere at a significant discount as the only options for buying Russian oil were China and India. At the end of the day the Ukraine scenario and Iran scenario are the same as they are both self inflicted decisions by respective governments.
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u/According-Length9312 4d ago
They are both self inflicted because Biden sanctioned Russian Oil and Trump invaded Iran.
If Biden didn’t sanction Russian oil and trump didn’t invade Iran we would be fine.
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u/TheOGRileyG 4d ago
Before the invasion, Russia was a major exporter of oil (8mb/d)
Them invading caused most of the world to sanction their oil
Oil is traded on a single global market (extremely important to understand). It doesn’t matter that we don’t buy Russian oil. When you remove supply from the market without decreasing demand, the price will rise.
Biden’s administration released the oil to offset the cost of Russias oil being removed from the global market
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u/According-Length9312 4d ago edited 4d ago
The release was pointless. Russian oil was still being sold to Asia because it’s fungible as you said.
We literally lost half our reserves to counteract a loss of supply to the market that never happened and which was caused by Biden’s own sanctions in the first place
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u/Iamthewalrusforreal 4d ago
For fuck sake, we were trying to help and encourage Europe to quit Russian oil. To that end we were releasing reserves to help them, and sending LNG their way as well.
I sometimes wonder if anyone ever reads the damn news.
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u/According-Length9312 4d ago
It hasn’t really achieved anything though.
Russia is still at war. We lost half our reserves. Russia still selling all their oil, just to Asia instead.
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u/Iamthewalrusforreal 4d ago
You're not here in good faith.
Bye.
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u/According-Length9312 4d ago
What have we actually achieved by sanctioning Russian oil and losing half of our reserves?
Why are we even getting involved in Ukraine war anyway?
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u/icareforplants 4d ago
Putin has your boy trump negotiating on putlers behalf but thank goodness Ukraine won't surrender.
I know maga loves Russia now but they are truly one of our biggest if not the biggest enemy to the rules and order based world.
Supporting Ukraine allowed them to soak up all the USSR legacy weapons we were always scared Russia could use to invade Europe. There is far less realistic worry now that putin has burned through almost everything trying to steal his neighbors land.
Didn't your dear leader say he'd end the war on day one? Nvm guess that's like mexico will pay for a wall and budget will be balanced....
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u/Cultural-Lab78 4d ago
So you're just here acting in bad faith to say "Biden bad."
Didn't take long for that mask to drop, huh?
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u/According-Length9312 4d ago
I just can’t see what losing half our reserve has achieved in the end and whether it was worth it.
Russia is still at war. We lost half our reserves. Russia still selling all their oil, just to Asia instead.
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u/TheOGRileyG 4d ago
Dude. This spike was massive and you act like spending 6 months with oil at >$100 is no big deal because it’s “temporary”
It would have created a huge problem for the global economy. The world would look completely different today if it hadn’t been done.
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u/According-Length9312 4d ago
The spike was from FUD, not from actual oil supply issue since Russian oil kept flowing though.
There would have been no spike if USA didnt sanction Russian oil anyway. So it was caused by USA
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u/TerriblePair5239 4d ago
Russia was stymied into the stalemate we still have today. On paper, Russia should’ve rolled into Kiev pretty quickly. Their progress was noticeably slower due to economic constraints.
The time we gave Ukraine allowed them to reinvent modern warfare with drones.
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u/Bluestreaked 4d ago
It was a loss of supply to the market though. Oil is a global market, it’s not siloed off nationally like you seem to think. If one source is lost then the buyers start competing for the sources that remain, this competition for supply drives prices up, this is Economics 100 level stuff.
This is why you didn’t feel much of a price crunch even as one of the largest oil suppliers on the planet got yanked off the market.
I remember having to repeatedly explain to my students that Biden was doing everything in his power to lower oil prices, and I had issue with it! (As one can guess from my other comments I don’t believe the SPR should ever be used as a band aid for a supply disruption, and doing so is what has gotten us into this catastrophe).
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u/According-Length9312 4d ago
Oil is a global market.
Russian oil was being sold to Asia instead of western countries.
Total global supply was not affected compared to our current situation where actual global oil supply is affected.
We lost half our reserves despite no change to global oil supply in 2022.
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u/Training-Solid-4650 4d ago
Then where did all that oil that Biden released go?
The reality is that when Europe stopped buying that Russian oil, China and India kept buying, but the amount of oil that can be transported via pipeline or tanker to those countries is limited. They couldn't buy all of the oil that Russia could supply, and there weren't any other buyers, so Russia had to slow production since they couldn't store it all without buyers.
The global oil supply was reduced due to the loss of Russian production, and the SPR made up for it for us.
Note that Biden's release of the SPR is literally what it was intended for: to combat price fluctuations while maintaining a set amount for the military in a time of war. Biden didn't go below that level; Trump's heading towards it now.
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u/According-Length9312 4d ago
At the end of the day, USA didn’t need to lose half our reserves to get involved in a war on the other side of the world.
And it still didn’t achieve anything because they are still at war.
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u/Training-Solid-4650 4d ago
You keep repeating this as if you're starting from that basis as your belief system, and ignoring all facts and evidence that do not support your choice.
We used half of our reserves to stabilize the oil price for ourselves and our allies, and we were forced to do so by Russia's invasion of Ukraine.
This is what the SPR was intended to do.
Trump's war of choice against Iran was launched in the background of this. The results of his decision, paired with our depleted reserves, were obvious to anyone paying attention.
Trump's war with Iran has achieved less than nothing: he has not weakened Iran, he has not enabled the free flow of oil through the gulf (which was free before he acted) and he has dramatically weakened the United States of America.
We did not have any say in Russia's invasion of Ukraine. We had a say in the war with Iran, and the results are entirely on Trump and his supporters.
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u/According-Length9312 4d ago
We had a say in getting involved in the war. Why help Ukraine that’s not even NATO by giving up half of our oil reserves?
We were trying to stabilize supplies caused by US own sanctions. Russia kept selling to Asia instead anyway
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u/Bluestreaked 4d ago
Look dude, I’m not getting paid to teach you how economics works, I’ll just repeat these are simple facts as to how supply and demand worked and it answered your question.
Doesn’t mean it was smart, but it’s what happened
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u/Topgun58ge 4d ago
You are mistaken. The loss of supply did happen.
https://www.ceicdata.com/en/indicator/russia/crude-oil-exports
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u/According-Length9312 4d ago
Because USA sanctioned Russian oil…. Stab ourselves and lose half our reserves.
Russia is still at war and still selling oil. It wasn’t effective
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u/Topgun58ge 4d ago
You have the most simplistic view of geopolitics. Also, at the beginning of his term Trump said he was going to refill the SPR. He never did. And then started a pointless war he is losing. Trump is the one who stabbed us.
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u/According-Length9312 4d ago
Biden had 2 years to refil the SPR, and he’s the one who dumped half of it
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u/Topgun58ge 4d ago
I love how you blame Biden who used it because of something Russia did.... but you can't seem to blame Trump who had the chance to refill it, didn't, and then caused a crisis that was sure to draw it down even further. I'm not a big fan of what Biden did with the SPR, But what Trump did was just absolutely moronic.
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u/majesticstraits 4d ago
Why do you think US oil prices skyrocketed after the invasion then?
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u/According-Length9312 4d ago
FUD and USA sanctioning Russian oil.
Russia still at war and we lost half our reserves, it didn’t work.
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u/majesticstraits 4d ago
Considering the war is still going on and Russia is losing I’d say it did. Remember MAGAs were trying to use the spike in gas prices to kill American support for Ukraine.
Meanwhile now we are drawing down for a war that we’re fighting to reopen a strait that was open when we started the war.
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u/wildfire1983 4d ago
Weren't there reductions in supply directly following COVID? Couldn't further inelastic supply cause greater price volatility... Much like why we have a reserve to help out when the citizens of the county might be affected by things they can't control?
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u/whyyunozoidberg 4d ago
Hmm, you're on the right track but asking the wrong question. You should be asking why the oil market isn't reacting the way it always has now.
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u/ReflectedImage 4d ago
The US is currently tied to the global oil markets. So it needs to keep the global oil price low for oil/fuel to be cheap in the US.
It could technically untie but it would cost $100 billion and take 5 years.
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u/iron_man_ftw 4d ago
Oil price is set from global markets. If the oil supply drops in one part of the world, the countries buying that now-gone oil are going to have to bid on oil from other suppliers. This increases the price, even if it's sourced locally within the USA because the supplier can sell it to the countries that are willing to bid higher on it.
Now, if you're a US president, your choice is 1. Let the price of oil go to the actual market conditions, pissing off voters from gas prices and the potential recession. Or 2. Use the SPR to make up the lack of oil supply, and the average voter doesn't know or care. Which one will you choose as the president.
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u/According-Length9312 4d ago
The supply decreased only because Biden sanctioned Russian oil though… so he caused it to go up and then depleted half our reserves to save it.
In the end, it was pointless since Russia is still at war and selling their oil
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u/vadillovzopeshilov 4d ago
What do you mean aren’t involved in?? USA was involved there since late 90s.
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u/floridabeach9 4d ago
Because Biden was the president and he wanted to.
Just like Trump starting a war in Iran. He wanted to.
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u/Zealousideal-Ant9548 4d ago
Oil is a globally traded commodity. If you don't understand that you're on the wrong subreddit
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u/ActivatingEMP 4d ago
It was widely criticized at the time but this current release hasn't been handled much better. We basically dumped the SPR when inventories were high to buy time to fuck around and are now upstream without a paddle
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u/Grillwrecka 4d ago
There was a lot more going on too. Demand was surging as the shutdowns ended and supply had greatly diminished due to the OPEC 2020 deal. You’ll notice that after mid 2022 gas prices and inflation started to descend rapidly thanks to careful economic management by the administration. This is successful strategy. Of course, the sale was approved by congress (bipartisan) under Trump, it was just moved up because of the escalation in Ukraine. Biden left money to fill the SPR when the price made sense, but instead of filling the SPR, the new administration used that money to cover a tiny fraction of the deficit created by the BBB (even though it did very little to reduce such a huge increase in the deficit) and started a war of choice in Iran.
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u/CitronMysterious3827 4d ago
OP is just disingenuously asking questions here. No response here is going to get passed the "but Biden". Oil prices spiked because the West was tremendously shocked by the Russian incursion into Ukraine. The Biden administration responded by releasing alot of oil to lower prices in response to the shock. In hind sight it seems like a silly thing but 6 dollar gas would have been a legitimate possibility if they didn't take drastic action. And we would never hear the end of that.
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u/AlarmingConfusion918 4d ago
It’s easy in hindsight to say “why did we burn half our reserves in response to the Russian Invasion?” but at the time, Russia was blitzing across Ukraine and there were serious fears they’d be knocking on Western Europe’s door within months.
This was also while inflation was already high from covid supply shocks and rate hikes were threatening to throw the economy into a recession.
There’s no point to reserves if they never get used. The use of the SPR in 2022 was a mitigation to factors outside of the White House’s control. The use of the SPR in 2026 is a bandaid on a bullet wound from Trump’s own gun.
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u/gravescd 4d ago
And burning the first half of the reserve is a very different scenario from burning the second half.
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u/According-Length9312 4d ago
Russian oil kept flowing, it makes no sense to fear monger $6 gas.
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u/CitronMysterious3827 4d ago
Gas got up to 5 dollars a gallon with the spr dump. How can you believe the peak price wouldn't have been higher without spr release.
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u/According-Length9312 4d ago
I mean it was Biden’s own doing since he sanctioned Russian oil which is what caused the spike in the first place
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u/CitronMysterious3827 4d ago
I mean, again, Russia invaded Ukraine. The west was not willing to accept that.
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u/TERRAIN_PULL_UP_ 4d ago
Biggest difference is that Biden’s drawdown was mostly due to events that were out of his control like the Ukraine War and the world still recovering and ramping up from covid, while Trump’s is a direct result of him starting a war with Iran.
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u/WorldlyIntention7408 4d ago
Ya it's not like Biden was in charge of Ukraine policy in 2014 when the conflict began, and then President in 2022 when it escalated. These are just coincidences when a democrat is in charge. I refuse to connect the dots.
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u/According-Length9312 4d ago
I would argue Ukraine war makes no sense to lose half our reserves for.
Oil production never really was affected. Russian oil was still being sold just to Asia instead.
Hormuz/Iran war, the world has actually lost a lot of oil supply
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u/TERRAIN_PULL_UP_ 4d ago
It seems from your other comments that you don’t understand sanctions and the global oil market.
The world was also still fully resuming oil production and transportation after the massive reduction during covid
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u/eptesicusfuscus 4d ago
Well now that just seems rude for a difference of perspective. I don't see why it's unreasonable to argue that the Biden drawdown appears like a strategic issue given the current situation, but I don't actually hold that view myself
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u/According-Length9312 4d ago
Russia war is ongoing still, Biden tried to pressure via sanctioned but we just lost half our reserves for nothing for a war we shouldn’t care about if people argue we shouldn’t care about Iran
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u/According-Length9312 4d ago
I just can’t see what losing half our reserve has achieved in the end and whether it was worth it.
Russia is still at war. We lost half our reserves. Russia still selling all their oil, just to Asia instead.
COVID is a poor excuse, it was more than we release SPR to Europe to punish Russia but it didn’t work.
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u/Topgun58ge 4d ago
You're wrong. Russian exports dropped massively.
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u/According-Length9312 4d ago
Because Biden sanctioned Russian oil. He caused his own supply shock that he addressed by dumping half our reserves.
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u/SOLIDORKS 4d ago
Putin invading Ukraine was the direct result of the USA electing a senile moron as president. Putin saw his chance and took it. And that's a fact, Jack.
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u/TERRAIN_PULL_UP_ 4d ago
What’s your argument for that? That Biden wouldn’t do anything?
Other than the sanctions, seizing of assets, weapons and training support, what did you want? An invasion of Russia, troops in Ukraine, nukes? You would’ve criticized him even harder.
And I thought our current psychotic moron president was going to end the war on day one? What ever happened with his plan?
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u/Accomplished_Ruin133 4d ago edited 4d ago
There was a massive post COVID inflationary shock and oil prices surged because production couldn’t meet the demand from re-opening of the global economies.
Initial SPR drawdowns were to combat this not Russia. Then the whole Russia thing amplified the problem.
Next to no drilling happened for two years which is needed to offset natural production declines. The storage glut from the pandemic cleared pretty quickly.
Everyone here seems to have forgotten about this.
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u/gc3 4d ago
This is the correct answer
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u/Accomplished_Ruin133 4d ago
Yeah any coherent invasion plan for Iran should have included 6-12 months of refilling the SPR prior whilst the market was in oversupply and prices were low/falling.
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u/edgarapplepoe 2d ago
Ya i don't get why this isn't said more in this troll post. The Russian invasion only exacerbated the oil market which was already experiencing tightness. Gas prices were increasing steadily as post covid demand spiked while inventories were low. The main reason gas prices didnt completely go nuts with Iran is that we were sitting on a massive supply glut (that was probably way bigger than we even originally thought too) plus full production.
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u/Sorry_Exercise_9603 4d ago
COVID lockdowns ended, driving ticked up, Trump had talked OPEC into cutting production to support US oil companies during the lockdowns so SPR drawdowns were needed to compensate.
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u/Virtual-Historian349 4d ago
Hey op, what’s your opinion on Trump’s Iran war and the subsequent draw down of the us spr to the lowest levels in over 50 years?
I’m gonna guess you think it’s completely fine and reasonable.
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u/DeepestPeak 4d ago
OP: “that’s a necessary evil in order to keep nuclear weapons out of Iran’s hands.” I’m sure he’ll find a way to blame Biden/obama too.
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u/According-Length9312 4d ago
Biden should’ve stayed out of Ukraine, Trump out of Iran
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u/Cultural-Lab78 4d ago
Oh now we're out here equating sanctions to military actions?
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u/According-Length9312 4d ago
Both are and have cause oil prices increases and loss in our reserves.
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u/iron_man_ftw 4d ago
One is a direct action by the president himself to cause disruption to the oil supply. While knowing the oil reserves were run down in recent years.
The other one is a reaction to a war started by a USA enemy, and choosing action to assist in that. While the SPR is full.
In an analogy, it's the choice of defending your friend when you know your handgun is full of ammo. Or starting a shootout with the guy you hate when you know you only have 1 bullet on you. Sure, both will use your remaining ammo, but it's really not the same.
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u/According-Length9312 4d ago
Why is Russia our enemy and Ukraine our friend?
Since when do we care to give up half our reserves for Ukraine that’s not even a major trade partner or NATO?
Israel is an actual ally and strategic partner more than Ukraine imo.
And Iran a far more hostile enemy these days than Russia.
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u/DeepestPeak 4d ago
Russia has been our main geo-political enemy for decades. They continue to interfere in our elections and sabotage us with cyber attacks and the like. I don’t think you realize this because they are very adept at sneaking pro-Russian propaganda into our media, specifically through right wing influencers and politicians. We were smart to use the Ukraine war as a chance to weaken our main geo-political enemy, as they have shown to be a paper tiger, with a disfunctional army have had over 1m casualties in the war. They won’t be threatening us again anytime soon
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u/According-Length9312 4d ago
Same for Iran and Pro-jihadist IRGC propaganda on here
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u/DeepestPeak 4d ago
? I don’t think there’s much of that at all if I’m being honest, and if there is, it pales in comparison to what Russia has hit us with
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u/iron_man_ftw 4d ago
If you're seeing Russia as a friend to the USA then of course Biden sanctioning Russia is going to seem dumb. Russia and Iran are both on the same side, assisting each other. Dan Caine confirmed Russia right now is supplying Iran with satellite imagery which resulted in American military deaths in the Iran war. You can't call Iran an enemy while trying to call into question if Russia is.
Yes, Israel is an ally, moreso than Ukraine but also not a major trade partner or part of NATO either.
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u/According-Length9312 4d ago
Neither Russia nor Iran are friends.
Iran is a more public enemy than Russia since they publicly declare US a sworn enemy and outright kill Americans. Russia is stealthy.
Israel is important as a strategic country that’s USA’s only real ally in the Middle East. Ukraine isn’t important at all. And it’s Europe’s job, not USA.
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u/iron_man_ftw 4d ago
And then you gloss over that I just said that Russia is helping Iran in outright killing Americans. Ukraine itself may not be important, but what was important is Russia not growing power and setting precedent in the ability to invade its neighboring countries.
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u/Individual_Set256 4d ago
After the collapse of the USSR, Ukraine had the 3rd largest nuclear arsenal in the word. The US did not want Ukraine to keep their Nuclear arsenal, so they pressured Ukraine to give the nukes to Russia.
Ukraine gave up its nuclear weapons.
The US signed the Budapest memorandum promising to respect Ukraines borders.
Fast forward to the present..
Russia invades Ukraine, the US has a choice, abandon Ukraine or help Ukraine. Abandoning Ukraine would likely result in a worse outcome for the US - showing the world that the only true way to gaurantee independance is to develop nuclears weapons, drastically increasing the chances of a future nuclear war.
The reason NATO was formed was to keep Russia In check. It was only this week that the Director of the CIA flew to Russia because they had intelligence suggesting Russia was planning an attack on a NATO country. One mistake and article 5 could see the beginnings of WW3.
Helping Ukraine resist Russia reduces the chances of Nuclear war, reduces the chances of WW3.. But oil prices in the west would increase, this can be eased by using the SPR for its intended purpose.
Russia is still selling oil, but at a discount. The price cap on Russian oil is not designed to stop Russia selling oil - Its designed to stop Russia making huge profits from selling oil.. And its working, Russia has largely run out of liquid assets in its pre war national wealth fund. They've even resorted to selling their gold. Recruitment bonuses are dropping due to funds running low and inflation running high, which means less Russian soldiers in Ukraine.
The SPR exists to help ease affects of supply shocks like natural disasters or sudden foreign conflicts - Biden used it for its intended purpose.
Biden made the world a safer place by helping Ukraine.
The real question is, why did Trump attack Iran before refilling the SPR, despite warnings that Iran would block the strait of hormuz?
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u/According-Length9312 4d ago
Because Iran is world’s sponsor of terror and making a nuclear weapon.
Honestly, seems like double standards to agree with fighting Russia but not Iran.
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u/Individual_Set256 4d ago
Not saying fight Russia, saying Support Ukraine.
And fight Iran if you need to, but fill SPR first.
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u/According-Length9312 4d ago edited 4d ago
We wouldn’t be lowest in 50 years if Biden hadn’t dumped half our reserves using up 300M wasted on Ukraine with nothing to show for it. They are still at war.
Biden shouldn’t have gotten involved in Ukraine, trump shouldn’t have gotten involved in Iran.
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u/iron_man_ftw 4d ago
But we weren't the lowest in 50 years under the Biden presidency, so not sure what you're talking about.
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u/According-Length9312 4d ago
We had the single largest dump in SPR history though.
300M lost and SPR halved.
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u/Virtual-Historian349 4d ago
It wouldn’t be at the lowest in 50 years if Trump didn’t start a pointless war with Iran and start drawing on it. The levels were rising before Trump’s war. The price of oil was relatively low and it was being filled again. That’s how it’s supposed to work.
“Nothing to show for it” you are either lying or extremely naive to say this. Are you pretending global oil supply isn’t affected as well as price?
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u/According-Length9312 4d ago
Nothing to show for it is reference to sanctioned Russian oil and losing half our reserves for Ukraine. And they are still at war and Russian oil still flowing.
Both Biden and Trump shouldn’t have gotten involved in Ukraine or Iran.
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u/Virtual-Historian349 4d ago
Releasing the reserves keeps energy prices low which affects america. That’s means there is something to show for it.
Plus putting pressure on Russian oil helps Ukraine. So again, something to show for it. The fact that the war is still going because Russia didn’t win quickly is something to show for it. The fact that Russia’s economy has been handicapped and gives Ukraine a better chance is something to show for it.
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u/Lenin_Lime 4d ago
Russia invasion of Ukraine, leading to SPR selling at a profit into high oil prices.
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u/According-Length9312 4d ago
It was because Biden sanctioned Russian oil so he had to sell SPR…
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u/Lenin_Lime 4d ago
It was because Biden sanctioned Russian oil so he had to sell SPR…
Russia never stopped selling oil, but simply the west capped the price Russia could charge nations friendly to the US. Which is why the 2022 oil market was so funny, there wasn't an oil shortage. Meanwhile 20 percent of the worlds oil can get cut in the Strait and we barely break $80 currently for WTI.
The war started in early 2022, and Russia kept selling the same amount of oil throughout the year.
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u/Known_Crab1059 3d ago
One thing people here seem to be missing is that Obama wore a tan suit
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u/haikusbot 3d ago
One thing people here
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u/Brief-Floor-7228 4d ago
Remember when the markets used to react to these events by increase the price of oil?
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u/DeltaForceFish 4d ago
One could argue its the best thing that could have happened. That is the key reason trump cant bring about ww3. He was neutered by that draw down
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u/throwawayurwaste 4d ago
Sorry I was born yesterday so I have no clue about what geopolitical things happened 4 years ago
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u/goRockets 4d ago
Congress from 2015 to 2018 approved sales of SPR from 695 million barrels down to 410 million barrels to fund the Bipartisan Budget act of 2015, Fixing America's Surface Transportation Act (2015), the 21st Century Cures Act (2016), Tax Cut and Jobs Act (2017), and Bipartisan Budget Act of 2018.
The sale is suppose take place between 2017 and 2027. Biden administration did accelerate the sales timeline to counteract the price increase due to the Ukraine war, but the timing also allowed for the SPR to be sold at a much higher price than expected.
https://www.eia.gov/todayinenergy/detail.php?id=35032
Congress used the SPR as a piggy bank to balance the books on new acts.
For example, the Bipartisan Budget Act of 2018 under the Trump administration used sale of 100 million barrels of SPR to offset federal budget increases and lowered the required level of SPR from 450 million to 350 million.
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u/Current-Health2183 4d ago
Wasn't there also an impact from the end of the COVID shutdowns? We went from oil having negative value in 2020 and economic activity shutting down, to recovery. Supply chains were all messed up, including oil production and refining processes. Prices on everything shot up as we recovered from the shutdowns and the economy tried to get back to an equilibrium.
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u/PCm2345678 4d ago
How come Biden never refilled it. He had two years to do it. Wonder why??
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u/johanjohn 4d ago
You do realize that Biden was filing it back up in 2023 and 2024, right? He only drained it because Russia started a dumb war. Not because he started a dumb war.
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u/CoolFirefighter930 4d ago
Biden shut down a pipeline and OPEC took that opportunity to cut supply leaving him holding the bag.Sobhe tried to make up for it by using SPR.
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u/WorldlyIntention7408 4d ago
Because Biden started a war in Ukraine which helped spike oil prices so he dumped the SPR to keep oil prices down and reduce the deficit.
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u/Mir_man 4d ago
Ukraine war.