Marble Falls       Big US-based, international oil giants, Exxon and Chevron, recently reported windfall profits for the last quarter.  Combined they banked $26.5 billion between the two of them.  I don’t know if this is war profiteering or just war profits, but there’s no question that Trump’s Iran war, and the Iranian response in the Middle East, is allowing them to make bank.  Driving in Arkansas and Louisiana in recent days, I saw pump prices over $4 per gallon, common across the country even in these states, even as I was pained at paying $3.74 when I passed one station later at $3.50, all of which are ridiculous prices.

Despite the huge profits they are making, the big boys aren’t putting that money into more drilling and production.  They argue that the long timelines between investment and payoff are impossible decisions given the unpredictability of Trump’s “on again, off again” war and ceasefire proclamations.  Brent Crude the main benchmark has gone over $100 a barrel and as low as $70 a barrel in recent months, so they say, who can tell?

Dealing with windfall profits is more a political stance than an economic one.  Let’s root for those who argue for more distribution and sharing, even if the odds are low.  There’s another argument that seems constantly in the wind now and buttresses the companies and their defenders, and that has to do with the state of our strategic reserves and those of other economically powerful countries.  Should we buy this or is it “what me worry?”

The backstory dates to the 1970s oil crisis, once again with Iran.  Big countries agreed to keep a 90-day reserve so that they would never be caught short again and passed laws to enforce the agreement.  The US, Canada, Mexico, and Norway were actually exempted from the 90-day rule, although the US has huge raw crude supplies in salt domes.  Right now, the US Strategic Petroleum Reserve (SPR) stands at 307.65 million barrels out of the 714 million barrels authorized storage capacity, as of the week ending July 24, 2026. This marks the lowest inventory level since 1983.

For all the talk, the UK and EU continue to hold 90-day oil reserves.  Theirs are for actually refined products, rather than crude, so are more turnkey, if that’s the right way to understand the issue. The pinch is less the reserves than the fact that many EU countries rely on Middle East imports for jet fuel and diesel, just as India and other countries rely on propane.  All the same, generally they’re not at panic point.  Germany is holding ~110–130 million barrels, France ~120 million barrels, and Italy ~76 million barrels, so all are sitting near their required 90-day baselines.  Australia has consistently had a problem in this area with only a 40–50-day cushion.

My guess, from various searches, is that the bottom line today is supply reserves are a red herring to justify all the attacks and counter-attacks in the Strait of Hormuz, the Red Sea, and the Suez Canal.  All of that is serious of course, but not immediate and not sufficient to justify continued war.  If Trump compounds his reckless error in triggering this conflict, and it lingers on towards another “forever war,” then it’s “Katie bar the door” and the sky is actually falling in many countries given the continued dependence on oil now and in coming years, regardless of some countries efforts to reduce their reliance.

The price at the pump is a real issue, and it will move politics even faster than any debate about windfall profits.  We need to focus on these issues and opportunities.  Keeping an eye on reserves is smart, but we shouldn’t allow ourselves to be confused in the fight right now that that particular concern is real and immediate.

At least, that’s my two cents.  Don’t bet on it.  I’ve been wrong many times before!