{"id":30499,"date":"2026-10-01T20:51:53","date_gmt":"2026-10-01T17:51:53","guid":{"rendered":"https:\/\/www.liberalglobe.com\/?p=30499"},"modified":"2026-10-01T20:51:53","modified_gmt":"2026-10-01T17:51:53","slug":"options-for-resolving-the-oil-market-crisis-are-running-out-dramatically","status":"publish","type":"post","link":"https:\/\/www.liberalglobe.com\/?p=30499","title":{"rendered":"Options for Resolving the Oil Market Crisis Are Running Out Dramatically"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">First, the Strait of Hormuz. Now, the Bab al-Mandab. Shipping through these two key routes\u2014which handle over 30% of global oil trade\u2014has been severely disrupted. To make matters worse, Houthi rebels in Yemen have damaged Saudi Arabia\u2019s East-West Pipeline, a conduit that had previously allowed the Kingdom to partially bypass the Strait of Hormuz.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Global oil inventories have fallen to levels where refineries are struggling to maintain normal operations. Oil flows are unstable. The risk of disruption is rising, and any potential downtime would only inflame an already highly tense fuel market.<\/p>\n\n\n\n<p class=\"has-medium-font-size wp-block-paragraph\"><strong>The reasons of the Oil Market crisis<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">According to JPMorgan, global oil stocks currently stand at 7.6 billion barrels and are declining at an alarmingly rapid pace; should they drop to 6.8 billion barrels, the operation of pipelines and refineries would be significantly hampered. Refineries in the US\u2014the world\u2019s largest oil producer\u2014are already operating at near-full capacity. They are utilizing up to 98% of their capacity. In practice, this means that the safety margin allowing them to respond to disruptions, carry out necessary repairs, or handle other unforeseen problems has all but vanished.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This leaves us with solutions that currently appear unlikely for various reasons. Theoretically, larger quantities of oil could reach the global market from China&#8217;s reserves, but Beijing views its resources as strategic and is unwilling to export them. Consequently, such a scenario seems improbable. Another possibility is the easing of sanctions against Russia, which is even less likely.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The crisis is being exacerbated by the high cost of oil transportation. Charter rates for a large oil tanker currently exceed one million dollars per day, meaning that logistics costs have become a primary factor driving up fuel prices. This is due to insurance costs, which have risen to record levels.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Furthermore, as noted below, US strategic oil reserves are at their lowest level in 40 years. As a result, the option of reducing oil exports is being seriously considered in the United States. Due to the three factors mentioned\u2014namely,<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the declining spare production capacity of OPEC countries,<\/li>\n\n\n\n<li>the reduction in US strategic oil reserves, and<\/li>\n\n\n\n<li>the declining processing capacity of refineries<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">the world has entered a new phase of the energy crisis, characterized by a lack of simple and readily available solutions.<\/p>\n\n\n\n<p class=\"has-medium-font-size wp-block-paragraph\"><strong>The Strategic Petroleum Reserves (SPR)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is worth recalling that the need to create a Strategic Petroleum Reserve (SPR) arose in the 1970s, when OPEC cartel nations announced an embargo on oil supplies to the US. The result was a fuel crisis\u2014specifically, a sharp rise in fuel prices and miles-long queues at gas stations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">SPR oil is stored at depths exceeding 1,000 meters in underground salt caverns. The four storage sites are located in the Gulf of Mexico region, across Texas and Louisiana. The maximum capacity of these caverns exceeds 700 million barrels of crude oil. This system ensures safety, with no leakage and extremely low operating costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Stockpile levels reached a record high of 727 million barrels in 2010. Today, that figure stands at just 289 million (the lowest level since 1982), putting the system at risk. Salt caverns are not ordinary storage tanks. If the oil level drops too low, the pressure inside the cavern falls dramatically, and the immense weight of the earth begins to press against and compress the cavern walls, leading to their irreversible destruction. How did this massive depletion of reserves come about?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In March, Trump authorized the release of 172 million barrels from the reserves to minimize the impact of a blockade of the Strait of Hormuz and prevent price hikes at the pump.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Month by month, the reserves dwindled, reaching their current low. On August 28, Donald Trump announced the &#8220;biggest oil deal in history,&#8221; boasting that he had secured a majority stake in over 65 billion barrels of Venezuelan reserves under a 100-year concession.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, Venezuela&#8217;s oil industry has been devastated for years by sanctions and a lack of maintenance. Billions in infrastructure upgrades and investments are required to get actual oil flowing to U.S. refineries and the Strategic Petroleum Reserve (SPR).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The earliest possible timeframe for deliveries from Venezuela is 2028\u20132029. Consequently, the Straits of Hormuz and Bab al-Mandab remain key factors for the coming winter; the immediate future of the SPR depends on whether they remain blocked.<\/p>\n\n\n\n<p class=\"has-medium-font-size wp-block-paragraph\"><strong>In this context<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>are the US capable of prolonging the conflict with Iran?<\/li>\n\n\n\n<li>are they capable of engaging in further potential conflicts, such as over Taiwan?<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">In the event of a new conflict, there would obviously be an oil shortage, similar to the one in the 1970s when the US military required oil on a massive scale due to the Vietnam War.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Incidentally, does the US military have enough missiles to sustain conflicts, given that it has depleted 50% of global stocks of MIM-104 Patriot and THAAD (Terminal High Altitude Area Defense) systems in the conflict with Iran?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The situation in the fuel market has spiraled out of control. The oil market crisis is becoming increasingly real, and the available options for a solution are running out.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>First, the Strait of Hormuz. Now, the Bab al-Mandab. Shipping through these two key routes\u2014which handle over 30% of global oil trade\u2014has been severely&#8230;<\/p>\n","protected":false},"author":1,"featured_media":30500,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[818,390,819],"tags":[8433,142,1040,1180,3514,4633,8434],"class_list":["post-30499","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-europe","category-politics","category-usa","tag-bab-al-mandab","tag-crisis","tag-middle-east","tag-oil","tag-oil-market","tag-strait-of-hormuz","tag-strategic-petroleum-reserve-spr"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/30499","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=30499"}],"version-history":[{"count":1,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/30499\/revisions"}],"predecessor-version":[{"id":30501,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/30499\/revisions\/30501"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/media\/30500"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=30499"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=30499"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=30499"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}