This article was originally published by Austin Litman on Proofofwork.ca
Oil is all over the news now because the price is so high. The main reason being told is Russia is causing it / supply chain issues. But there is something else going on. For the first time, the US is using their reserves to satisfy the public’s demand.
During the Great Recession of the 1980s, the US stockpiled a huge amount of oil so prices would go down. They stocked too much, and it caused an “oil glut” (which means they overstocked oil). This resulted in a massive crash in the oil price.
Similar events to oil prices happened in 2008 and during other recessions. Oil prices would rise like crazy and then crash even more. But the US didn’t dig into their own oil supply like they are this time.
The US can’t decrease their oil reserves to 0, so they will need to order more from other countries (they already started getting more from Canada) to compensate. They also need to keep prices for consumers as they are to ensure demand stays the same. If prices go down too much, they will run out of oil. This means countries with oil are about to get invaded for random reasons. So let’s hope that doesn’t happen.
