America BURNING Through Its Emergency Oil - w/ Economist Chris Martenson

Added: 2026-05-23

[00:00:00]I mean, in theory, there's 374 million barrels left in There's four major SPR salt caverns.

[00:00:06]And two of them have what's called medium sour in it. Two of them have light crude in it. And this is the thing. It's a salt cavern.

[00:00:14]So, what you do is you pump all this oil in and and the cavern gets full, but you don't just suck it out and leave a air gap. They push water down the bottom and it pushes the oil up as it floats.

[00:00:24]Problem.

[00:00:26]Salt isn't dissolvable in water. So, the more you do that, you start running into problems where you're actually collapsing and and you know, the salt cavern's being basically eroded away.

[00:00:35]It's It's just turning into a solution.

[00:00:38]So, there's no Nobody knows for sure, but the last time I saw an analysis said that effective minimum, like you can't take more than X out of these caverns. You can't go to zero before you irreparably damage them.

[00:00:51]Uh so, we don't have 374 million barrels in there. We have something less than that.

[00:00:55]Best guess I have is maybe half that.

[00:00:58]At the current rate we're taking it down, we got 50, 60 days to to figure this out. And Iran knows that perfectly well.

[00:01:06]Holy crap. Um What What about the whole narrative that the US is selling oil now and even China's buying American oil? I was always under the impression that US doesn't doesn't have enough oil to export.

[00:01:20]But why would these announcements be made?

[00:01:23]So, so our baseline is this. Right before the Iran war started, and so for every month, like I'll take the last 6 months of data leading up to that, right? So, um October, November, December, January, and early Feb through February. So, if you look at that, the United States was importing about 6.6 million barrels a day and exporting about 4 million barrels a day of oil. Now, why is that?

[00:01:46]Well, we export cuz we have all this shale oil. It's very light. It's It's uh our refineries aren't tuned for it. It doesn't give us the downstream products we need. So, we export that. But we need the stuff we do need, which is the heavier stuff. We get stuff like that from Venezuela, from Canada, from the Middle East, from wherever we can source it. And so, before the war started, we were a net importer of oil. Now, since then, in the last few weeks, we have been a net exporter, but that's only because, Mario, we're going into our principal balance in our bank account. We're going into the trust fund's seed money, and we're actually selling oil that we had put in inventory, on reserve, to other countries.

[00:02:28]So, I think 7 million barrels 2 weeks ago went to various Asian countries, Pakistan, India, here and there.

[00:02:34]China's, I think, got their hands on some. Of course, we're helping out South Korea and Japan as much as we can.

[00:02:40]But, make no mistake, what we're doing is we're selling Americans' strategic oil in reserve to other countries to try and keep the price tamped down as we sort through the negotiation process.

[00:02:54]Look, we're doing the complete opposite, or the US is doing the complete opposite of what China's doing. China's trying to stock up on those reserves and barely using them.

[00:03:02]I don't know if they've even shared There's been reports that they're going to open up some exports to help neighboring countries. That strategically makes sense. I think it was the Philippines or something. But, that was it, and they're being They're hoarding that oil knowing that this could last for a longer period of time.

[00:03:17]And France is saying, actually, there was a report they put out today, last couple of hours, that France is expecting the blockade to go on for much longer than other countries expect.

[00:03:25]Um So, what China's doing the is the complete opposite of what the US is doing, which is sacrificing long-term strategic leverage, or or even survival, for short-term benefits. And this whole war is that. There's actually a report that came out an hour ago that really bothered me.

[00:03:43]But, the the the first sentence in the report, on in the tweet that my team did of the report, "The US just burned through half of its entire THAAD interceptor stockpiles defending Israel while Israel conserved most of its own.

[00:03:57]That's another example of where just long-term I just don't know how the US is going to get out of this remaining superpower and that's worrying.

[00:04:08]Yeah. So, I mean and and by the way, each one of those THAAD interceptors is millions of dollars, right? Depending on which one we're talking about. So, upwards of 13 million for a single copy for some of them. So, I mean we're that was expensive right there.

[00:04:23]And and you make a great point. So, long-term short-term. He Here's my Here's my chief concern economically is that everybody in power today let let's say Scott Bessent, um, you know, everybody who's sort of at the hands of of this economic response that we're doing right now, which includes we're dumping our own strategic petroleum reserve, our own commercial reserves are being drawn down. We're at dangerously low levels, you know, on all sorts of uh dimensions on this stuff. We've never been lower coming into the summer driving season, which is just about to start on Monday with Memorial Day, um, coming up, right? So, all right.

[00:04:54]So, the problem is is that you think about these people sort of cut their teeth.

[00:05:00]Well, what happened? So, we had this thing called the internet boom and we had the dot bomb, you know, blow up in 2000 and well, that's okay, you know, we just it opened up the printing press, papered over it, right? Uh okay. And then, oh no, we had this housing crisis and then we had the great financial crisis and then we had collateralized debt obligations, CDOs, the loan obligations, the CLOs, they blew up, you know, terrible. So, they printed like crazy and we got through it. So, I think it's sort of in their head to say, "Oh, crisis, it's okay.

[00:05:31]We just print our way through it and we print money. And also, we control the narrative cuz we wouldn't want people panicking or taking this the wrong way."

[00:05:40]The problem is is that this is molecules we're talking about. This is energy.

[00:05:45]This is totally different. We cannot fake our way through this.

[00:05:50]But I think they think they can because that's been their whole career experience up to this point. I mean, this is where I come in.

[00:05:56]I I I analyze energy in the economy and and if you want to look at how an economy actually works, I have a completely inverted sense from every other economist out there. They all say, "Oh, you have this thing called the economy and then there's all these subsets, right? You've got labor, you've got you know, in manufacturing, you've got real estate, you've got energy." I'm like, "Whoa, got it wrong. You have energy and then everything is a subset under that.

[00:06:24]Cuz if you don't have any energy, you can't have any economy. You can't have a fire, real estate, you know, you finance thing, you can't have anything. So, energy is the master resource, the master resource. You want more copper?

[00:06:34]Takes energy. You want to get uranium out of the ground? Energy. So, when you look at it that way, we've never faced an energy crisis of this magnitude before.

[00:06:44]Secondarily, we've never faced a crisis of any sort before with the level of indebtedness we have currently across all the Western countries, but United States in particular.

[00:06:54]And even more to the point, the United States for the past since COVID has been running an emergency level deficit, emergency, 6 7% of GDP. Kind of what we were running during World War II. We're running a wartime emergency economy without actually having a war. Well, now we have one, so I expect the deficit to go even higher. So, when you put all those pieces up, you're you know, it's a very tenuous situation and it has to be managed perfectly.

[00:07:20]And we're currently managing it minute by minute with fake tweets about fake progress.

[00:07:26]And it's just it's as astonishing as it is worrying, to be honest.

[00:07:35]Yeah, it's like survival mode. I'm trying to see how how to compare it. So, it's like the White House or the US administration or the US as a whole is in kind of survival mode.

[00:07:44]Like it's it's Sometimes when I look at all the moving pieces and how bad it really looks, I'm like, "Mario, just take a step back."

[00:07:50]And I've done this a few times in recent weeks.

[00:07:52]Maybe it's not that bad. Maybe you're too stuck in that bubble and that kind of it looking at things from a certain lens.

[00:07:57]Now look at and I have people from, you know, from all different perspectives on the show. I had an Emirati official yesterday and obviously very She wasn't as hawkish as I thought. But then I have someone who's very, um, bearish on China and talking about how China's economy is suffering and is and it's got its own problems. So I started looking at everything from different lenses.

[00:08:17]And I still come to the same conclusion.

[00:08:19]It is looking bad. Like if you look at the Putin Xi meeting compared to the Trump Xi meeting, the Trump China meeting and the Putin one.

[00:08:27]Um, Putin was greeted with much more fanfare, better press coverage, et cetera, in the in China.

[00:08:35]Trump, after the first day, was not even on the front page of the, uh, Chinese newspapers. But more importantly, what really matters, uh, Putin and and Xi signed 40 agreements and documents in all these different sectors. Not one that I know of was signed between Xi and Trump. There were vague promises about Boeing and and buying soybeans and stuff. But that was it.

[00:08:56]Um, so that's on that front looking bad.

[00:08:58]On the Iranian front, you saw the report today. Iran is months away from rebuilding its military capabilities.

[00:09:04]90% of the missiles, 70% of the missile launchers are intact. China's helping significantly. So that's Iran and Iran is is ready for a continuation of the war. They're not hesitating from it. The Gulf that's freaking out. Then you have the Gulf. The Gulf are really upset with the US reports that, um, you know, Saudi is very very, you know, going to join your red line for Trump in continuing the war. So looking terrible on that front. Europeans, Asian countries, allies looking for alternatives to American security. Taiwan, out of out of nowhere, Trump is like, "Oh, Taiwan is now a negotiating chip with China. Like the level of desperation for you to just suddenly out of nowhere you saw that in the interview in the Fox News interview.

[00:09:43]Trump about Taiwan he goes um uh with that so the the interviewer on Fox News said, "Will you Will you approve the aid to Taiwan?" He's like, "I don't know. We'll see.

[00:09:54]Um I might use it as a negotiating chip with China."

[00:09:56]For Taiwan to suddenly become a negotiating chip after a trip to China that was meant to get concessions from China on Iran?

[00:10:04]Um everything just points in a very worrying direction and that we didn't even talk about what's happening in Russia and how um Russia's putting, you know, drawing red lines for Europe and starting to to warn NATO on on what's happening in Ukraine. Um very worrying and very sad to be honest, very very upsetting to see the world's biggest biggest democracy go through this.

[00:10:29]Yeah, it's it's how many so many dimensions to take that on. Um there's the optics of it, there's the diplomacy of it, there's the um there the actual physical damage that's being done to the infrastructure of the world. So, you know, we talk about the Gulf and and it's oil. Okay, actually it's oil and oil products.

[00:10:46]Okay, well, actually it's that plus sulfur plus helium plus aluminum plus urea on and on and on. Each one of those is a crisis all on its own and um so you have that.

[00:10:57]And again, it feels like the way the United States is managing this is almost it's just so short-term. It's just minute by minute, day by day, almost making it up, just winging it, you know, which I don't think that's how geopolitics is supposed to be sort of managed. And you and I talked about this last time. I can only imagine being the US negotiators working hard to try and make some progress over there, you know, in Pakistan and then Trump tweets out the exact opposite of something you've just agreed to, you know, facepalm. It just must be awful, you know.

[00:11:27]>> Al-Alister Al-Alister former MI5 um Alister Crook said to me today, he's like, "Mario, the mediators are just a postman. They're people with a piece of paper with proposals on them and they go give it to the other side and then take the counter proposal back to the president. So, everything's in writing and not electronically." And that's what he That's what he told me.

[00:11:47]>> [snorts] >> Oh, I'm I'm I'm imagine that. So, um But but I don't So, I I too, you know, with my team every day, uh we have big long romping calls and and in the dominant dominant every day for the past 2 months has been, "How do we have this wrong? Like, what's another way to look at this? Is there something we've missed here? Is this Am I just locked in a in a in a cylinder of of view that I can't get out of?"

[00:12:15]And we haven't we haven't broken our own frame yet. So, here's the thing. Economy is the energy. The world is missing 13 million barrels a day. We're going to have to make that up. And every day that ticks by, that gets worse. And that's not even including the derivative things like sulfur. Sulfur's a whole giant story all on its own.

[00:12:33]And so, when we add that up, there's going to be economic heck to pay here.

[00:12:37]There just There just has to be. And the only response that Trump has made directly about that is, "I don't care about Americans' financial situation."

[00:12:47]He doesn't care about other countries.

[00:12:49]We've got plenty of oil, you know? So, it's just this whole I don't care about anybody Me and my team are fine. And and it's just um I mean, optically, politically, geopolitically, diplomatically, on those fronts, I've I don't think I've seen as much damage done. And I was I was alert and awake during the Bush years and I thought that was I thought you can't get lower than that, right? Made up weapons of mass destruction and all that. Um But we're doing worse than that right now.