Fact CheckThe Strategic Petroleum Trap
When a government empties its strategic reserves to lower prices today, what hidden structural cost do traders immediately begin pricing into the market?
The billion dollar infrastructure cost of repressurizing the salt caverns.
The rapid chemical degradation of the remaining crude oil.
The Refill Penalty, which is the absolute certainty that the government is now a guaranteed massive future buyer.
Correct. They created a massive future liability.