The war in Israel is happening almost exactly 50 years to the day since the Arab-Israeli war (Oct 6, 1973), which led to the creation of the Strategic Petroleum Reserve.
The Strategic Petroleum Reserve is an emergency stockpile of petroleum maintained by the United States Department of Energy. It is the largest publicly known emergency supply in the world; its underground tanks in Louisiana and Texas have capacity for 714 million barrels.
Right now it’s low. That’s because the Biden Administration is fundamentally incompetent but also very sensitive to criticism – in this case the rising price of gasoline. America’s emergency oil stockpile has plunged to 40-year lows. The shrinking Strategic Petroleum Reserve is limiting Washington’s ability to shield consumers from the fallout of Saudi Arabia’s aggressive supply cuts, according to Goldman Sachs.
Couple this with a series of catastrophic energy decisions, including cancelling shale drilling, stopping pipelines, banning offshore drilling, subsidizing inefficient alternative power sources, allowing most of our refining to be conducted in the Middle East, etc., has led us to the brink. Russia has been supplying the world with oil via India. That is likely to end. Expect gas prices to go through the roof.
And if we end up participating in a war, it’s going to be expensive. At some point it won’t be paid for by foreign bonds. The chickens will come home to roost and they are going to squeeze us until our pips squeak to make good on all that debt.
Whenever there's turmoil in the Middle East, it's always comforting to know we have a sizeable Strategic Petroleum Reserve…— E.J. Antoni, Ph.D. (@RealEJAntoni) October 7, 2023