Oil Reserves & a World of Shifting Power

Summary

Governments established strategic petroleum reserves after the 1970s oil embargo to insulate economies from supply shocks, with the US and China holding the largest stockpiles, though China's numbers are less transparent. Historically, the US held the largest reserve due to its import dependence, but as it became an exporter, its significance lessened. The current geopolitical landscape, marked by attacks on energy infrastructure and the normalization of war crimes, challenges the post-World War II international order. This shift toward a 'law of the jungle' means that while temporary shortages can be managed, the long-term real price of commodities like oil is expected to be lower, as governments actively discourage speculative long positions. In this evolving multipolar world, while opportunities exist in enabling energy production, particularly for companies like Exxon in Guyana, the market's resilience is evident as alternative routes are found for disrupted supplies, like rerouting cargo around the Strait of Hormuz. Even seemingly niche commodities like helium, which experienced temporary disruptions, are plentiful globally, with markets finding ways to adapt.