Tapping Strategic Reserves Is A Ploy

In response to the attack on the Saudi oil refinery, Trump has said he will tap the National Strategic Reserve. This is a ploy. If not for it being a ploy, I would be forced to say, “My, how SOCIALIST of him.”

The strategic reserve is in place to safeguard against a national oil and gas shortage, as happened in the early 70’s. We are not there, nor are we at risk of being there.

Not long ago, Trump was crowing about how the US is now a “net” oil exporter. Meaning we export more oil than we import. We still import oil. Lots of it from Saudi Arabia. So, what’s the problem? Stop exporting, right?

Wrong. There are several issues at play here.

First, ceasing the export of US oil would mean impacting the petrodollar system directly. Which will already see a significant impact because Saudi oil is sold anywhere in the world in dollars, a significant portion of the petrodollar system and the original petrodollar itself. For that to be reduced by half takes a huge bite out of the petrodollar system because a lot fewer dollars are being traded internationally. If we stopped exporting oil, that would result in a drop of roughly 75% of the value of the petrodollar itself. Assume import/export to be equal, so 50/50. Half of the imports gone means a reduction of 25% of the petrodollar. Reduce export by 100% and you cut another 50% of the petrodollar value.

Second, this is a giveaway to the oil companies. There is no federal oil refinery, no federal wells in…