At first glance, no, but if you think about it,
by G.K.Chesterton (2024-03-24 11:42:59)

In reply to: Running down oil reserve restricts domestic production? *  posted by ufl

Cannot Reply Return to Political

the releasing of the oil is distorting the marketplace, keeping prices lower in the short-term, thus discouraging producers from looking for more (by suppressing prices) and while also draining reserves that are meant for emergencies. Nixon's ill-founded price controls come to mind.


As long as you don't think about it too deeply
by ufl  (2024-03-25 12:14:58)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

The incentive to increase long run capacity depends on producers' expectations of the future price (as opposed to the current price). The notion that those expectations respond to factors which are, by their nature, temporary is hard to accept as a portion of the "much" which Biden has supposedly done to restrict supply.

You might want to focus on his demand policies if you want a serious analysis.
A lot wrong here IMO
by DBCooper  (2024-03-24 12:23:26)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply


First of all the SPR was used for an emergency, when Biden sold 40% when Russia invaded Ukraine. So, emergency seen and countered.

Second, Nixon times are much different than modern times. We were not big oil producers in the mid 70s, now the US is the biggest in the world and we export more than we import.

Finally, price of oil has gone up and down while Biden has sold of the SPR, so while it’s a nice headline, it doesn’t have as much of an effect on the price of oil as people may think. And it’s a bit bizarre to claim that if it did the fact it reduces the price of oil would eliminate oil production here in the US which has reached all time high levels as the price of oil has been relatively stagnant over the last 18 months. Oil production is still profitable well below $70/80 a barrel. I think it’s close to $30/40 a barrel when profitability is not there

With that said I do think Biden should have added to the reserve when it got under $70 as he supposedly promised Saudi Arabia. So he made a mistake there IMO, but it isn’t a game changer or destroyer of our energy policy because he didn’t.

They are adding to the reserve. It's not instantaneous
by gregmorrissey  (2024-03-24 13:54:16)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

I posted on this a few weeks ago when the same claim was made. The administration is replenishing the reserves and will likely have a net positive affect for the Treasury (sold higher than it cost to replace) depending on whether prices don't spike over the next year or so. My understanding is there are physical limitations on how much oil can be pushed back into the SPR.

Reuter's article from January

DOE release from February



We've added back 13M barrels since 08/25/2023 (7 months).
by G.K.Chesterton  (2024-03-24 23:54:26)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

At that rate, it will take over 12 years to get back to where we were in January 2021, assuming we *never* draw it down at all during that entire time period.

Note that the administration had already drained 58M barrels after it took over before the Russian invasion of Ukraine in Feb. 2024.
My understanding is we've been restrained by maintenance
by gregmorrissey  (2024-03-25 10:55:18)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

So, I don't think it's correct to extrapolate the recent replenishment rate on a straight-line basis. We've also cancelled some Congress-mandated sales that were to occur over the next few years. I'll admit that I'm suspicious of the "politician math" at work here.

To your argument about supporting domestic production, wouldn't the government basically setting the price floor at $70/barrel support domestic production? What's the point of a reserve if it can't be used to stabilize prices in the event of a destabilizing geopolitical event that had us trying to get Europe to go along with a Russian oil embargo.

Understandably, it only works if we follow through with replenishment. No different than deficit spending in a recession. We all know how good our politicians have been about reducing spending during economic expansion /s.


In general, I interpret attacks on the administration's energy policy as partisan "Fox News" partial truths. Using terms like "allegedly" and "President Kerry" only increases my skepticism of the arguments.