US Oil Reserves HIT 22 YEAR LOW As Price Spike Imminent

Turning now to the economy, the Treasury Secretary Scott Besant testified before Congress yesterday, assuring Americans that inflation is just a slight blip.He was also asked about Trump's infamous comments about how he doesn't care about America's financial situation.Let's take a listen.

that he does not think about Americans' financial situations.Do you think about the financial situation of the American people?

I do, and as the ranking member distorted my statement, as he often does, I had prefaced my statement with, we understand that these are challenging times for the American people, that we will get over this, and that at present the average household has paid about $200 more in gasoline.We think about this every day.

Well, I'm glad that you do.Do you think your boss should too?

I believe his remarks were taken out of context.

No, look, here's what he said.He said, quote, I don't think about Americans' financial situation.I don't think about anybody.So I'm asking you, that's the direct quote, do you think about how the American people are paying more for gas, groceries and utilities since the president clearly said he didn't?And you speak with the president regularly.Are you trying to tell him the truth about how much costs have increased for the American people?

Well, Senator, I'm going to have to disagree with you on some of that because I have groceries are going down.And to be clear, since President Trump took office, food prices, or as many people like to call them, groceries, food at home, in the statistical data, ends up 2 .5%.

When's the last time you were in a grocery store?Because my husband and I were just in one.And look, the average granite stater, the average granite stater is paid, let me be clear, the average granite stater has paid $3 ,000 more since Donald Trump took office for basic goods and services.Meanwhile, the country lost 100 ,000 manufacturing jobs2025.So do you tell the President this information or not?

Again, Senator, except for inflation, which is, I believe, going to be a short -term blip, the economic data is very strong.

Except for inflation, the data is very strong.

Economic data is very strong.

That's Maggie Hassan, right?Granite State is New Hampshire.So they don't even have sales tax.So those people are actually doing even better than the rest of us.But yeah, man, I just don't know how they can possibly think they could get away with this talking point, except for inflate.Imagine if Biden said that.

They would destroy them.Oh, absolutely.I mean, it's like they've recreated all of the problems of Bidenomics, except this time it's genuinely entirely their fault whenever it comes to the Iran war.And they won't acknowledge it.They're like, nope, everything is perfectly OK. on the oil front.

And the numbers are worse too, just to be clear.I mean, because we have the inflation, but also during the Biden, partly, you know, we're coming out of the COVID recovery and there was a lot of stimulus spending, but job growth was going bananas.You know, I mean, this is now we have this anemic job growth.Yeah.Wages are now behind, back behind inflation where the, you know, we turned that corner during the Biden administration.And to your point, it's all because of Trump's own economic decision -making, which, which by the way, he's got a new, tariff scheme that he's implementing as well at this same time, because that's based on human rights and protecting against forced labor, which we all know is something he really deeply cares about.

He's very committed to.

It's only because forced labor is one of those provisions in the law which they pass, which is they're able to implement tariffs.My wife actually used to work exclusively on this, and I was asking her about this.She's like, yeah, this is insane.We can put C7 up there on the screen.total of 60 trading partners, including the EU, China, Japan, and Britain would be affected.So, yeah, I'm sure they have a lot of forced labor in Japan or in Britain.

But, you know, what do I know?Clearly, it's just a simple workaround.It will almost certainly not survive significant court challenge.But the one thing I really wanted to flag was oil because, you know, We've been a broken record, I'm sure, on oil.Some people are like, oh, a lot of these prognostications haven't worked out.The reasons for that are actually fascinating.

I'll get to in a second.But let's put C3, please, up on the screen.Yesterday, the Iran war has now drained U .S.oil stocks to the lowest level since 2004.Total stocks of crude and petroleum products fell by 10 .6 million barrels last week to 1 .57 billion barrels.

That is the lowest level since 2004.The sharp fall has triggered new warnings from industry analysts that oil prices are poised to move sharply higher again within weeks.The U .S.oil price rose 2 .6 percent in afternoon trading on Wednesday to some Now, Bob McNally, he's the president of Arabidane Group, former White House advisor, said the prices will reach $200 a barrel this summer unless the Strait of Hormuz was reopened to tanker traffic.The combination of low oil inventory and a low amount of reserve in the strategic petroleum reserve basically just means there's no more like slush, like extra oil to fulfill demand.

Now, the reason why this has not actually happened earlier, and this is so interesting, I've been spending a lot of time reading about it, is that China, as of this morning, has now plunged their oil imports by 40 % compared to 2025.And nobody knows why.The Chinese government has not issued any explanation.And so I can come up with only three answers.Number one, it's a way to basically get a significant amount of soft power with Japan and South Korea.And be like, listen, you guys are heavily reliant on LNG.

So as a gift to you, and perhaps for some future deals, we are going to import way less oil.They have a massive strategic petroleum reserve.And so we're going to draw that down.We're going to ban our jet fuel and other exports.And we're just going to use what we have here.So that's one that's bad for the US.

Number two is that they did it at the behest of the US, which basically means Trump perhaps in some sort of deal, which she said, look, man, you guys drive down your SPR, and you buy me a lot more time in Iran so that I don't have to face a significant crisis.Because the current analysis is that if China was just importing at normal levels, that it would put the price around $130, $140.So that's a very different landscape here in the US, where maybe, what, $6 a gallon, $5 .50, something like that.The historic price, right?Much more so than normal.The third answer is basically, they're just showing it.

as a flex to say, we're massively energy independent.We can do whatever we want.We filled up our SPR when the price of oil was very, very low.Might as well use it.We'll let the rest of you suckers pay the premium at $100 a barrel.All three, I think, are signs of weakness.

And you could criticize me for saying that, but if China's using it as a soft power gift to the critical US allies of Japan, South Korea, and the rest of Southeast Asia, that dramatically undermines.So if they're helping, we're hurting.Number two, the idea that we have to do it the best of the US basically means what?It means that we have to go to them hat in hand and say, please bail us out of this problem.Number three is a flex just to say, you're a joke.Your inventory is down to 2004 levels.

Your price of oil is very, very high.You're exporting all your oil.the rest of the world, which is great for Chevron.Chinese consumers, they're doing OK, a lot better than the rest of you.All of them, I think, undermine our image.And it also just demonstrates where this talking point about net oil exporter has come back to bite us in the ass.

Because who cares if you're exporting a ton of oil if the price is still damn high?It only matters in their context where they just banned a bunch of exports and are basically keeping the price generally low.for Chinese consumers relative to Japan, to South Korea, and the rest of Southeast Asia.

Well, the other thing is China has invested massively in renewable energy.They're the global leader in renewable energy.And by the way, their exports of solar panels have skyrocketed as not just China, but other countries around the world seek to replace some of their fossil fuel infrastructure and fossil fuel energy generation with renewable energy.Because yeah, I mean, that is the real lesson of all of this is it doesn't matter if you're a net energy border, if you're participating in the global oil markets, you are also going to be subject, your consumers are also going to be subject to those price pressures.The only real energy independence is from renewable energy.That is quite the opposite, though, of what the message has been coming from Energy Secretary Chris Wright, who is saying that actually the high energy prices are not because of the Iran war at all.

No, no, no.They're somehow because Democrats wanted green energy.Let's go ahead and take a listen to that.

We're in the middle of solving a 47 year old problem that's a growing problem about a nuclear armed Iran.I've never met anyone not even a Democrat who's comfortable with a nuclear armed Iran.But the bigger problem, the even bigger problem with gasoline prices, electricity prices, heating prices, is Democrat green policies.They've done everything they can for 20 years to drive energy prices up, and now they're upset about high energy prices.I'm glad.I hope they keep that attitude going forward and will work with us to drive energy prices back down.

A week ago, it was $4 .45, so it's come down in a week.But here's from a New York Times piece now.They went out and talked to Trump voters in the state of Michigan, the state of Maine, and here's how they feel about high gas prices.Here we go now.Last time I filled up, I was like, oh, this hurts.It's affecting me in a lot of ways.

It's been rough for the last couple of months.Those are the quotes.To them, you say what, Mr. Secretary?

Oh, we feel your pain.We absolutely want to drive energy prices down.

We feel their pain.I mean, this is just the... polar opposite of reality.In fact, if there had been more investment in renewables and you had more Americans driving EVs and more renewables who are fueling the electricity grid, we would be in a better position than we are right now.And the American prospect did a good piece on exactly what we've been talking about.All of the reasons why the gas price crisis has not been even worse than it is right now.We can put C5 up on the screen here.

Something is going to snap.So far, the closure of the Strait of Hormuz has not led to a major economic disaster, but that won't last forever.And the factors that he identifies, Ryan Cooper here, who's the journalist behind this piece, are, as Sagar was saying, the fact that you have a lot of nations who are drawing down on their strategic petroleum reserves.So you have levels in those reserves reaching the proverbial bottom of the barrel.So that is not something that can be kept up indefinitely.Another factor that he does

identify is the incomplete but significant transition to green energy, which has helped to serve as a buffer.Chinese exports, the rights of solar and EVs are soaring.Even very poor countries buying in bulk for a nation like Egypt, whose oil imports have been a crushing burden on a struggling economy.Renewable energy is not about hippy -dippy environmentalism.It's a matter of life and death.Same thing happening in Cuba, by the way, right now because of our blocking of oil imports.

imports there.And then the other thing that he points to is the fact that you have had a lot of countries, in particular in Asia, multiple, like several dozen countries around the world that have cut back their consumption already through rationing and other controls.So they already concede the writing on the wall.They're already implementing these restrictions so that you can, you know, help to stave off the worst of the price hikes.Obviously here in the U .S.

we haven't taken any such measures.We're just relying on the market prices getting so high that demand destruction, as it calls, happens naturally.Yeah.

I mean, look, even, you know, still $4 .24 a gallon, about $5 .97 in California, which means something $6 or so in the major metropolitan areas.It really is just so bad for so many.Let's put C6 up there on the screen.This is actually quite interesting.The OECD just released a new report saying even if oil prices peak soon, the global economy will stall this year.year.

The conflict is significantly disrupting the world's supply of energy and critical commodities, slow economic growth, and raise inflation through 2027.Global economic growth was slow to 2 .8 % this year from 3 .4 % before recovering to 3 .1 % next year.Projections assume energy prices have peaked and then will gradually fall.So this is the assumption that you will have a slowing of economic growth worldwide, even if oil prices have peaked right now, which is in no way a guarantee.As we said earlier, I just want to confirm your point about Hezbollah.they have officially come out and said, absolutely not, we're not doing those ceasefire terms, which means if those ceasefire terms are not locked in, that means that no ceasefire terms with Iran can be locked in either.

I always found it hard to believe.How could you sign on to a ceasefire?We said, yeah, half of our country will be occupied, effectively in perpetuity.

That would be nuts.Well, and a lot of times what seems to be happening, I'd be curious to hear Jeremy's reporting on all of this, is like the US and Israel will talk to the official government of Lebanon and then Hezbollah will be like, we didn't agree to this.You know, no, we're not withdrawing and the IDF can stay in Southern Lebanon.That's not happening.So certainly appears something of that nature occurred.

Actually, literally as we were talking, sirens sounding in Northern Israel amid a Hezbollah rocket and drone attack.Oh boy.Okay.So price of oil, I wouldn't hold my breath anytime soon.