Except there is plenty of oil all over the world flowing, and sellers eager for USD. The “big tank” can be filled still, with an endless supplies of USD, and it’s no where near empty now.
The bigger issue IMO is that over the last couple elections we’ve seen politicians trying to buy votes. Trump cut taxes, then delayed their payment, then wrote stimulus checks, and now Biden forgave student loans and is spending US oil reserves to keep gas prices low until *checks notes* November.
That has been true for decades it might not be true right now - otherwise why is the US running down its strategic reserve?
Obviously the Americans don't believe they can print money and exchange it for oil - or they would do so. Paper for oil is a much better trade than running down the strategic reserves. Their relationships with a lot of the top 10 oil producers range between highly competitive to low-intensity war.
ostensibly this is what's going on. when citizens and corps receive stimulus or other breaks, they buy petroleum products that floated over on a petroleum powered barge, were driven to a hub by a petroleum powered intermodal freight transport, trucked via petroleum products to the retailer where the consumer drives a petroleum based and often still petroleum powered vehicle to go and make their purchases of petroleum made plastic products.
Petroleum is in everything. If you print american dollars, it will eventually end up purchasing petroleum products many times over in the lifetime of those dollars, whether they be paper or digital.
> otherwise why is the US running down its strategic reserve?
Because it keeps domestic oil prices low which keeps an electorate happy. The government can’t force OPEC to pump more oil at a low price nor can they set prices, but they CAN increase oil supply on the market through reserves.
That sits in conflict with the idea there are lots of people who want to sell the US oil though, does it not? They don't. The US dollar isn't exciting enough for them to go out and pump oil. It isn't obvious that the US firing up the printing presses would suddenly make them excited at the thought because it isn't like that gives them a better deal. The US has the same capability to get them goods, services and assurances before & after the printing.
And unless the electorate are very stupid (an option, I suppose) they will note that at some point they will be paying even higher prices if the SPR is refilled. It'll be even worse than it would be right now.
> They don't. The US dollar isn't exciting enough for them to go out and pump oil.
They do, in fact, pump oil for US dollars right now. They obviously have an incentive for prices to rise, and they’re a cartel. OPEC colluded to raise prices.
Of course, we also have treaties that say when the do sell their oil it’ll happen in USD.
> they will note that at some point they will be paying for even higher prices
Yea but that’s ok when it’s not an election year and inflation isn’t raising other expenses. Or, just play chicken and hope that you can last until the next political party takes office, then they look bad for raising prices.
> it will be even worse
Not if it’s done slowly at a time when the demand is lower or supply is higher.
The bigger issue IMO is that over the last couple elections we’ve seen politicians trying to buy votes. Trump cut taxes, then delayed their payment, then wrote stimulus checks, and now Biden forgave student loans and is spending US oil reserves to keep gas prices low until *checks notes* November.