Due to the virus crisis, the price of oil has dropped to an all-time low. Experts in the energy sector might be panicking, but Donald Trump has come up with a brilliant idea. This week, he discussed a plan that would capitalize on this moment, while empowering the United States for future need.
Thanks to the fear of the virus, most of the modern world has shut down. Although it looks like we’ll be coming out of our government-mandated lockdowns soon, the fallout of the virus will still be felt all over the world. Concerns about contracting the disease have quite literally shut down tourism. Even without lockdowns, people have avoided travel—even within their own towns.
That fear—felt around the world—had decimated the price of oil. With such low demand, the price has steadily dropped over the last month. Add to that a price war between Saudi Arabia and Russia, the price continued to plunge into negative territory.
That might make some economic and energy experts worry. After all, if the price of oil stays so low, it would hurt oil producers in the long-term. But when others see problems, Donald Trump sees opportunity. He has taken note of the historically low price of oil and is working on a brilliant deal of his own.
With oil prices sitting deep in the red for the first time in history, shocking even the most seasoned energy veterans, President Trump plans to turn the financial bloodletting into an opportunity for the United States.
“Based on the record low price of oil, it is at a level that is very interesting to a lot of people, we’re filling up our national petroleum reserves, strategic reserves and we are looking to put as much as 75 million barrels into the reserves themselves that would top it out, that would be the first time in a long time its been topped out and we’d get it at the right price,” said Trump…
If Trump’s plan gets approved by Congress the SPR would act as the motherload of U.S. storage purchased on the cheap.
“We’ll ask for permission to buy it or store it one way or the other it will be full” he added. [Source: Fox News]
Trump tried to replenish the SPR through the last emergency bill, but was blocked by Democrats. Once again proving how idiotic and short-sighted they are. Purchasing oil right now is a stroke of genius. It wouldn’t cost the government much money at all. Replenishing those reserves is preparing the country for a potential crisis in the future. President Trump is thinking ahead (you know, unlike what Obama when he depleted the country’s emergency stockpile of medical supplies and never replenished it).
But this move does more than refill our SPR. A huge purchase like that can help energize the oil market. Trump wants to buy roughly 75 million barrels of oil. Not only will he get them at a massive discount, but that takes a good amount of oil off the market. That could help bring oil prices back up to a reasonable level, staving off major, long-term losses for the industry.
By late spring, early summer, we’ll be clear of this crisis. You better believe there will be a global explosion of travel, tourism, and movement. All at once, the price of oil will skyrocket. That in itself won’t be great. Helping to keep it at a steady level now will prevent the oil from fluctuating too much, once we get back to normal.
Nobody else seemed to understand this, except Trump. Now all that needs to happen is to get Congress to approve.
I’m sure Trump can twist a few arms to make it happen.