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America May Have Just Unveiled a New Weapon to Combat Russia's Action in Ukraine

"The supreme art of war is to subdue the enemy without fighting." 
-- Sun-Tzu, The Art of War

Source: Wikimedia Commons.

There are lots of weary eyes looking at the situation between Russia and Ukraine. Russia has already annexed Crimea, and a very sizable army has been deployed to the Russian-Ukranian border that has many worried there may be more to the conflict. There is little appetite for a military response from America and its Western allies, and the response so far has some concerned it isn't enough to make any significant impact. Recently, though, the U.S. government did something it hasn't done in almost 25 years, and it could be an indication of how the U.S. will retaliate. 

Source: U.S. Department of Energy.

The world's most powerful weapon: Oil
For several years, the United States' Strategic Petroleum Reserve, or SPR, has rarely garnered any attention, mostly because it is used so sparingly. Since 1977, when it was implemented, there have been only a handful of times that it has tapped, the last being in 2011, when President Obama authorized the release of 60 million barrels in response to the crisis in Libya. 

That is what makes the recent "test sale" of 5 million barrels of oil so intriguing. This is the first time since 1990 that there has been a test sale from the SPR, which just happens so coincide with the time there was concern that Iraq could invade Saudi Arabia. While correlation does not always mean causation, the release of those 5 million barrels coincided with a 2.7% drop in crude oil prices.  

Hit 'em where it hurts -- their wallet
It's no secret that Russia is one of the world's leading exporters of oil and gas. It exports about 8.5 million barrels per day of crude oil and refined petroleum products, as well as 19.3% of the worlds natural gas exports. What is less known is Russia's nearly crippling dependence on oil and gas revenues to pay the bills. The $662.3 billion petroleum industry in Russia represents 26.5% of GDP, and over 50% of the federal government's revenue comes from royalties. Unfortunately for Russia, its oil doesn't come cheap. Even with oil at $100 per barrel and current production levels, the country projects only 1.8% GDP growth, and if oil were to fall any lower it would force massive federal budget cuts. 

So what exactly would releasing oil from there do? Let's say U.S. production and imports from Canada and Mexico were to hold place. The U.S. would need to release about 950,000 barrels per day to meet all of the United States' current demand. Based on the SPR's 727 million barrels in storage, we could do this for well over two years and drive down global prices significantly. Surprisingly, though, we don't even need to go to that extreme. According to economist Phillip Verleger in a recent Quartz article, if the U.S. were to release only 500,000 barrels per day from the SPR, it would lead to a $10 drop in oil prices and would cost Russia $40 billion in sales. At this pace, we could maintain this pace for more than four years and could potentially cause Russia's GDP to drop by 4%. 

We've done it before, but it will be harder this time
There are two ways to describe the collapse of the Soviet Union: The storybook version is about the arms race that eventually bankrupted the USSR and led to its evenutal collapse. The one that doesn't get told as much, though, is the other half of what caused the bankruptcy: cheap oil. In a coordinated effort with Saudi Arabia to increase global crude production, inflation-adjusted oil prices fell 69% between 1981 and 1988. This resulted in massive revenue shortfalls for the USSR and became a critical piece that eventually led to its downfall.

The challenging part about such a move this time around is that Saudi Arabia may be less willing to go along with the idea. The Kingdom has been very much against Russia's support of the Syrian regime and even gave some veiled threats about potential terrorist attacks at the Sochi Olympics if it maintained its stance there. However, it has become more and more dependent on high oil prices to maintain its budget as well. According to the International Monetary Fund, Saudi Arabia needs oil at $85 per barrel to keep its own budgets in line. So even though a major price drop would hurt Russia more than the rest, Saudi Arabia may not have the stomach for it, either.

What a Fool believes
There have been several calls from members in Congress to expand the amount of LNG export licenses to take a bite out of Russia's dominance in the global gas markets. It sounds all well and good, but the first US LNG export facility is not expected to come online until the middle of 2015 and the rest until later in the decade. In fact, opening the SPR would actually serve a very similar purpose, because Russian natural gas prices are indexed to the price of oil. 

Using the Strategic Petroleum Reserve as a political tool is something that we have basically never done since it was created following the oil embargos of the 1970s, and using it in this situation would cause some harm to U.S. oil producers because it would lower the price of oil and by default the returns on that barrel of oil. However, most of the shale resources in the U.S. would fare much better than Russia in the event of lower oil prices, and it should be something considered if the situation in Ukraine were to elevate any further.

OPEC and Russia are absolutely terrified of this game-changer
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Read/Post Comments (92) | Recommend This Article (76)

Comments from our Foolish Readers

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  • Report this Comment On March 30, 2014, at 2:40 PM, Jim85035 wrote:

    The problem is the United States needs that oil for our country , that's why it's called Strategic Petroleum Reserve.In the event of a Global conflict it won't amount to a hill of beans!

  • Report this Comment On March 30, 2014, at 3:02 PM, downwithobama wrote:

    The Reserve was meant to provide for US security in time of crisis. This action will only weaken the US and have little or no long term effect on Russia. Once again a failed president risks Americas interest to boost his own ego.

  • Report this Comment On March 30, 2014, at 3:03 PM, citservices wrote:

    Brilliant idea, then we have no reserve anymore and the price of oil can be $80 a barrel 1 day and $200 a barrel a week later. Lots of opportunity for speculators there!

    As for LNG, Obama will NEVER approve it so that is 4 years away, assuming Hillary loses. If she wins it will never happen

  • Report this Comment On March 30, 2014, at 3:21 PM, amvet wrote:

    Your article follows the US government and pentagon line and I assume that you know better, but just in case you do not, here are some facts.

    Massed Russian troops on the Ukrainian border: As part of the open skys agreement, Polish and US observers flew over Russia looking for troops near the Ukranian border and found NONE: Not news worthy.

    The US financed and managed the coup in the Ukraine against an elected government. We choose the next Ukrainian leader in December. Reference the phone call between Ms. Victoria Nuland and our ambassador in Kiev.

    Our side managed the killers who shot and killed both police and demonstrators (53 or more dead people.) Reference the phone call between the foreign minister of Estonia and the EU diplomat Ms. Ashton.

    Russia did not invade the Crimea.Troops had been stationed there for years. The Crimea eagerly voted to join Russia.

  • Report this Comment On March 30, 2014, at 3:28 PM, ban566 wrote:

    so what Obama is saying is more supply lower prices ? hum so one more time Obama is a contradiction of his one words

  • Report this Comment On March 30, 2014, at 3:29 PM, amvet wrote:

    The IEA reports that globally oil consumption has been exceeding oil production so that in the last 3 months of 2013 global inventories of oil fell 1.5 million bbls per day. Global oil storage is now at the lowest level since 2008.

    In addition global demand in 2014 is predicted to be up 1.3 million bbls per day to 922.6 million bbls per day.

    Our recent "test release" from the SPR may have been related to a global shortage rather than our anti-Russian policies.

  • Report this Comment On March 30, 2014, at 3:33 PM, Throbbo wrote:

    Where was the outrage when the US annexed Iraq? Afghanistan? This article is pure pro-west propaganda.

  • Report this Comment On March 30, 2014, at 3:35 PM, PAA wrote:

    there has to be other ways besides mortgaging our future

  • Report this Comment On March 30, 2014, at 3:37 PM, PAA wrote:

    to Throbbo...there was much outrage when Bush went into Iraq because he did it for purely personal and selfish reasons. He set America back 30 yrs with his foolishness

  • Report this Comment On March 30, 2014, at 4:07 PM, btc909 wrote:

    So this will hit America where it hurts.

    The wallet.

    You VOTED for this you DESERVE this!

  • Report this Comment On March 30, 2014, at 4:18 PM, dbenitez30 wrote:

    People...if you're going to post, at least know what you're talking about. The US NEVER annexed Iraq or Afghanistan. Last I knew neither are part of the US.

  • Report this Comment On March 30, 2014, at 4:18 PM, soprano77 wrote:

    Get our OPEC friends to drop the prices for one year to Europe and save our reserves for us.

  • Report this Comment On March 30, 2014, at 4:23 PM, RHO1953 wrote:

    Moronic. It won't have any impact on Russia or Russian policy. Putin is in it for the long haul. Dumbama can't think past tomorrow. He will still have his newly annexed territory long after Dumbama is gone. Nothing the Village Idiot in Chief does will have the slightest effect on Putin.

  • Report this Comment On March 30, 2014, at 4:26 PM, CrazyDocAl wrote:

    China will buy Russian oil in a heart beat. It's just easier to send it to the EU. That means there isn't going to be a large drop in price. In fact all Russia needs to do to raise the price back up is get investors nervous that they may invade the eastern part of Ukraine.

    LNG is a dream. There's zero chance that the US could supply enough to Europe to counter Russia. Besides the obvious issues, no ports or ships the cost would be much higher than a pipeline. On top of that the price of NG in the US would jump as supplies dropped. So unless the plan is to crash the US economy so we can damage Russia's economy we are stuck.

  • Report this Comment On March 30, 2014, at 4:28 PM, MPA2000 wrote:

    Nah. We can't sustain any mass oil sales to Europe.

  • Report this Comment On March 30, 2014, at 4:31 PM, Ethiopian wrote:

    why should the USA retaliate. Is Crimea a state in the US and Russia took it by force? The people in Crimea voted to join Russia. And that is it. Please do not start another cold war. It does not concern the US.

  • Report this Comment On March 30, 2014, at 5:00 PM, gogmagog666 wrote:

    The majority of that Oil in the S.P.R. was bought at 10 to 25 dollars a barrel. To replace it will cost 4 or 5 times more, even with factoring in the expected decline when they use this to lower prices. This is an insane response with the added fact that it will destabilize Saudi Arabia, which will only in reverse ratchet up the price of Oil, and all Iran has to do is bomb one of its own Oil tankers in the strait of Hormuz, and let it burn, while they also do a mock attack on that U.S. carrier replica and Oil prices will skyrocket, and if only for a few days would rock the world economy, devastate the economies of many in the European Union. When military action breaks out in the region, it will only add to the destabilization.

  • Report this Comment On March 30, 2014, at 5:07 PM, higheagleguy wrote:

    If push comes to shove, Russia could easily launch a well placed nuclear device in the Suez, perhaps?

  • Report this Comment On March 30, 2014, at 5:26 PM, quacker wrote:

    the new weapon , do as we say or we will send you obama and you have to keep him and if that doesnt work we will send in the beave

  • Report this Comment On March 30, 2014, at 5:32 PM, ilsm50 wrote:

    US has as much use for a crude oil weapon as it has for deploying a few super carriers into the Black Sea.


    throbbo was misstating the obvious: US did not annex Iraqistan it invaded them, threw out their governments, tried to make them baptists, and imposed some funky system of government but it did not annex them. Iran likely will benefit when the remnants of Iraq going full civil war.

    However, 15 years ago this month US bombed Serbia for 78 days, including the Chinese embassy in Belgrade to do what it accuses Russia to be doing in Ukraine.

    It was okay to break up Serbia but not okay to break up the neo con kluge in the steppes.

  • Report this Comment On March 30, 2014, at 5:37 PM, caustin24 wrote:

    Anyone old enough to remember WW2 will tell you that Hitler started out annexing a piece of a neighboring country, saying "I have no further territorial demands" and then went on to start the most devastating and viscous war in history. Putin needs to be addressed now, because if we wait it may be too late.

  • Report this Comment On March 30, 2014, at 5:42 PM, RodrianRoadeye wrote:

    Fools! This is an attempt to keep oil prices high while making it look like diplomacy. Same reason we went into Iraq, and it worked. Iraq was undermining Cartel prices, but our government lied and made it look like they had WMDs, and we were out to liberate the Iraqi people. Now, today, there are 8 major oil companies that are getting oil under contract from Iraq. And they have not paid a dollar bacjk to us for the cost of the war.

  • Report this Comment On March 30, 2014, at 6:12 PM, peterwolf wrote:

    'A new weapon to deploy against Russian troops'.

    Don't tell me , let me guess. A greatly improved Reset Button??

  • Report this Comment On March 30, 2014, at 6:46 PM, sabebrush6 wrote:

    Send them Obama. That'll get'em on the run.

  • Report this Comment On March 30, 2014, at 7:00 PM, toomuchgas wrote:

    If the U.S. dumps oil below cost then it hurts the taxpayer who will have to replace it later at higher prices. Also with lower prices it will force marginal wells in the U.S. to be capped and will stop the drilling of new wells unless they can be profitable.

  • Report this Comment On March 30, 2014, at 7:18 PM, sanjosemike wrote:

    Often a solid threat is enough to force a decision amongst our enemies. The problem is that this puts Obama directly against the environmentalists, who don't want any of this to happen.

    While it is true that releasing some of the Strategic oil reserves would not damage Russia immediately, and it will take at least another 4 years for us to start selling Nat. gas to Europe, we can start both now.

    There is no perfect solution and war surely is not. Complaints by posters here that "this would not be enough" to foil Russia makes no sense. When it comes to foreign policy, one looks for possible scenarios that will help. Perfection never happens in foreign policy decisions.

    The "message" to Putin is at least as important as the action itself. Putin needs to sell gas to Europe. If Europe can eventually buy most of it from us, even in 10-15 years, that will destroy their market.

    That's what I mean by the "message."

    But we need a strong president who will stand up to environmentalists.

    We don't have that yet.


  • Report this Comment On March 30, 2014, at 7:19 PM, Goldenboys wrote:

    Or Obama's "dream weapon" forcing a carbon Tax on our industries while the Russians don't! That will bring Putin to his knees...laughing yet again!

  • Report this Comment On March 30, 2014, at 7:30 PM, airjackie wrote:

    That was known when Obama set the sanctions and his meeting with the G7. Look for Romney and McCain to say it was their idea as lying works. This is why Cheney came out blasting Obama and Rumsfeld got up in the middle of the night to call Fox News and say Obama was a trained ape. Look everyone now knows the invasion of Iraq was to get control of the oil fields. Well Obama knew the 7 nations brought oil from Russia and suggest they look to other nations to buy oil like Iraq. Well that would bill Iraq's economy which has no US investors. Remember McCain, Bush, Cheney and other Republican lawmakers have investments in Russian oil.

  • Report this Comment On March 30, 2014, at 7:31 PM, Dahun wrote:

    A much smarter and long term restraint on Putin would be to develop the 80% of our energy reserves on Federal land and become energy independent and increase worldwide supplies by 10% or more. There is one trillion barrels of oil in the Green River formation according to a 2007 Rand report for the Department of Energy.

    Another idea would be to help Europe develop their natural gas supplies which could make them independent of Russia's natural gas supply which is the biggest problem, not oil as oil can be and is supplied to Europe from the Middle East.

    Depleting our strategic reserves is a short-term, and unnecessary idea. The mere movement toward a san e energy policy to work toward energy independence will lower oil prices dramatically. Even stopping the blockade on the XL pipeline would help

  • Report this Comment On March 30, 2014, at 7:39 PM, skipgainer61 wrote:

    Yes Obama and America to fight back against Putin in the Ukraine. Obama just hung a white flag out the White House window.

  • Report this Comment On March 30, 2014, at 7:41 PM, AssetDesignCente wrote:

    Why bother with actual physicals? Just short sell the hell out of the futures and other paper markets just like they are doing with the precious metals. Don't give away our important strategic reserves for some petty disagreement.

  • Report this Comment On March 30, 2014, at 7:49 PM, regotoguy wrote:

    Pretty stupid idea. Kind of like Russia selling all of their US Treasuries. Any other bright ideas?

  • Report this Comment On March 30, 2014, at 7:50 PM, yooperintx wrote:

    I wish people would learn to read and comprehend before posting on an article. There is nothing in the article that indicates that Obama is considering this tactic, it is something that the Fool is putting out there for discussion. Yes, we did a "test sale" of oil from the SPR, but there has been no indication that more sales will happen.

  • Report this Comment On March 30, 2014, at 8:54 PM, speculawyer wrote:

    We are the 2nd largest oil importer (China just passed us). Russia is the largest or 2nd largest oil exporter. The thought of us using oil as a weapon is laughable. I'm amazed that people are ignorant enough to believe it is even possible.

  • Report this Comment On March 30, 2014, at 8:56 PM, TibetanMonkey wrote:

    We can all to bring Russia to her knees by NOT consuming oil and riding a bicycle!

  • Report this Comment On March 30, 2014, at 9:13 PM, SLTom992 wrote:

    Well, you have to admit, no one says "Duhhhhhh" with quite the verve as Obama.

  • Report this Comment On March 30, 2014, at 9:15 PM, medicinestick wrote:

    To bad people fail to check the U.S. Energy Site before posting about all these trillions of barrels of oil we are suppose to have,now this is what they have on their site the U.S. HAS 26 billion barrels of RECOVERABLE OIL we use 6.87 billion barrels of oil per year which means the U.S. has just about enough oil to run us 3.5 years.!!!

  • Report this Comment On March 30, 2014, at 9:18 PM, francko wrote:

    Russia is three times as large as the next largest country. It has more natural resources than half the world combined. It can not lose.

    By the way any reportage from the west is riddled with propaganda. Notice how the photo of Putin has been tinted to make him appear yellow. Look at the microphones. They have a green tint.

  • Report this Comment On March 30, 2014, at 9:28 PM, ok1 wrote:

    Two Words : Still Veiled.

  • Report this Comment On March 30, 2014, at 9:34 PM, redmanrt wrote:

    Used sparingly, could be an effective tool. Combine it with choking off Kaliningrad with Polish and Lithuanian troops and US navy and airforce, and you have something that would really get Putin's attention.

  • Report this Comment On March 30, 2014, at 10:19 PM, kafantaris wrote:

    That's right, Russia's oil and natural gas economy is a "one-trick pony," just as Adm. James Stavridis had said.

    And with such an obvious Achilles' heel, Russia will remain more bluff than menace.

  • Report this Comment On March 30, 2014, at 10:20 PM, sdansker wrote:

    Okay, fools, I'll wait 15 minutes before posting....there, that ought to do it. Us poor, uneducated retail "investors" are pawns in this world-wide struggle for power. I like Putin. He is what he is: a bold, ruthless reincarnation of the depots of the past. You don't have to guess what he will do. Just watch. In this instance, he'll get more out of NOT invading Eastern Ukraine that he would if he actually did. The only way to stop him is use his own tactics against him. Anybody got a spiked cup of tea? See, that was easy. Unless we actually get rid of him, he'll keep doing what he knows best: rule with an iron fist. Get used to it.

  • Report this Comment On March 30, 2014, at 10:21 PM, BobMorris wrote:

    Yes, let's once again consider the idea of an oil embargo. If I recall my history, it was around 1940 that the U.S. government decided to use that ploy to keep Japan bottled up. The result: The attack on Pearl Harbor and World War II rather than just a war in Europe. BRILLIANT STRATEGY

  • Report this Comment On March 30, 2014, at 10:31 PM, Oregonboy wrote:

    Can we just send Obama over to Russia in exchange for a case of Vodka? I think that is about as fair trade as we will ever see..

  • Report this Comment On March 30, 2014, at 10:32 PM, Tucson21 wrote:

    In lieu of tapping their SPR, they should repeal or amend the Energy Policy and Conservation Act of 1975 which makes it illegal for American oil to be sold outside the country. It can only be sold as refined petroleum products. This means oil producers are stuck at whatever capacity the refineries have, leaving them to idle fields and equipment when the capacity isn't there or refineries get taken offline.

    Amend that law to still protect American consumption, but also allowing increased domestic production that can then be sold abroad, and you'll see the price of oil go down as well. Set it so that above a certain threshold for domestic use, the remainder can be sold overseas, and watch the price drop. The Chinese would have ships lined up in a minute if we did that and they're the leading purchaser of Russia's oil exports. Peg it at whatever dollar amount Saudi Arabia wants to keep them happy and away we go.

  • Report this Comment On March 30, 2014, at 10:37 PM, QuickDraw53 wrote:

    if they want to hurt them with oil then build that darn pipeline. flood the market with any oil or gas that you can. when russia goes bankrupt they will have to listen

  • Report this Comment On March 30, 2014, at 10:38 PM, rotorhead1871 wrote:

    they are the evil empire.....they know it. they need to be completely isolated....and neutralized.....

  • Report this Comment On March 30, 2014, at 11:03 PM, rolivas wrote:

    This may work,however, know where their fleet is. The last time we did this, Pearl Harbor was bombed.

  • Report this Comment On March 30, 2014, at 11:31 PM, DeepBlueFish wrote:

    The Russians are not as neolithic as is being reported. Though, putting a firewall in front of Putin would be a good idea. We can double U.S. oil production within 12 months if needed, and put Russia into a tailspin and looking for a war to stabilize their political situation. As always, the U.S. has under estimated some newly emerged technology, and over estimated the Russians. The real questions concern the deflationary reality of the Republican Right, and our barriers to technological development. We are far more likely to implode ourselves than to see massive changes in the Eastern European old block.

  • Report this Comment On March 30, 2014, at 11:38 PM, dickiefickle wrote:

    You want to do something to help ? Cut down on consumption . Instead of driving take the bus if possible for one day . Limit trips to the stores, to stopping on the way home from work.

  • Report this Comment On March 30, 2014, at 11:39 PM, DeepBlueFish wrote:

    Russia has massive natural resources. We need to redefine them as such. The faster we pull up the economic structure of Russia, the faster we lower world tensions. When I was there 40 years ago, they were still running steam engines for much of their freight. They have jumped ahead by maybe 3 decades in that time, but there are significant holes. Besides, the Russian paranoia needs a couple more decades to soften.

  • Report this Comment On March 30, 2014, at 11:54 PM, DeepBlueFish wrote:

    You want to save the planet, then encourage the adoption of new technology. Currently, we have entrenched money, yes the .1% of the top 1%, who are adamant about retaining industrial and political power, and to them change represents their greatest threat to survival. Shall I list the technology available to double oil and gas production, to basically eliminate heating and cooling costs within 10 years for all buildings, to remove petroleum and coal as power production sources, to change to a renewable world where agricultural production is removed from our land and placed within production towers. These things are achievable within 10 years, they exist now, but need implementation time. The available technology is massive, we are being constrained by our politics.

  • Report this Comment On March 31, 2014, at 12:39 AM, TheAncient wrote:

    Judging by many of the comments posters here do not understand much about the SPR, how much reserve there is, how it will be replenished. The SPR has been used before by other Presidents for the same purpose; a quick hit on the market to temporarily drop the price of oil as a message to some other country.

    In 2001 we invaded Afghanistan, ignoring the several TRILLION dollars in natural resources the country has. We invaded Iraq in 2003 falsely believing that by 'winning' we'd get access to all their oil, one of the largest reserves in the world. We missed on both counts. Enter China, they show up in both countries with shipping containers loaded with cash, accepting whatever price the seller made. But be assured any contract China made would in the long run favor them. They will buy officials, place them in very strategic positions within businesses and the governments. Thus showing that American leadership is about as dumb as humanly possible and still be alive.

  • Report this Comment On March 31, 2014, at 1:50 AM, Gorgotherabbit wrote:

    Oil? Who needs oil!

    Oil is only good for contaminating your air that you breathe.

    Use solar energy. It is asfer & cleaner.

  • Report this Comment On March 31, 2014, at 2:38 AM, nbfresno wrote:

    I have been commenting about the Ukraine on other sites that we do have a huge amount of untapped resources which we should be using if Russia withholds theirs to the EU. Not only would the LNG resources and SOME of our oil reserves be excellent to sink into the market, but also we have untapped oil galore that we have not touched and the pipeline from Canada as a plus. We need to do this in an environmentally sensitive way, but we need to do it. There is no reason for us to hold back, just because environmentalists say so. After all, in the middle east and other countries they are sucking the oil out at break neck speeds, not caring about the environment at all. If we produce and sell more, but do it in an envornmentally sound way, we will actually be saving the earth. We all live on the same planet, don't we? Of course our solar and wind resources must be used as well.

  • Report this Comment On March 31, 2014, at 3:10 AM, alehpoor wrote:

    Lavrov offered peace and federalisation of Ukraine . U.S. Secretary of State John Kerry and new Ukraine's foreign minister declined the offer .

  • Report this Comment On March 31, 2014, at 3:16 AM, cri33 wrote:

    downwithobama ..this was written by Motley Fool and not by Obama. It has not been done and may never be done so why are you jumping to conclusions. Oh yeah I just don't like Obama. Now I understand.

  • Report this Comment On March 31, 2014, at 3:27 AM, luichose wrote:

    Is not a big secret,the best weapon of usa,is the loud mouth of the politicians,they talk and talk,and is sad,when they include innocent people in their own mess.

  • Report this Comment On March 31, 2014, at 3:42 AM, rodgerolsen wrote:

    The problem with all of these "solutions" is that Russia is not some broken down third world country that we can easily bully. They are fiscally sound, have a very small deficit, and provide more value to EU than the US does.

    Every one of the sanctions so far proposed does more to hurt the US than it does Russia.

    This one is one of the most bizarre - we are 17 trillion in debt, so they want to sell billions of barrels of crude at a loss to punish Russia for winning a fair election in the Ukraine. I hope all of the hawks are wearing cheap shoes, 'cause they are going to shoot themselves in the foot.

  • Report this Comment On March 31, 2014, at 3:45 AM, Rolland wrote:

    Send them our number one weapon, President Obama. There is a whole host of problems for them to figure out with that.

  • Report this Comment On March 31, 2014, at 4:05 AM, duudaa wrote:

    I thought Obama would unveil a Russian version of Obamacare that would bankrupt the Russians.

    You know Stalin is laughing in his grave.

  • Report this Comment On March 31, 2014, at 5:29 AM, bobusoroh wrote:

    The number of americans supporting Putin goes to show common sense is not dead, these people will support either putin or Obama when any of them pulls the right string, irrespective of their redpective nationalities. Kudos to them that cater for the fate of mankind as whole.

  • Report this Comment On March 31, 2014, at 6:13 AM, ajff wrote:

    The idea is good, but the technique is limited because it is a limited capacity stockpile. It is also sort of a vindictive response - US will increase its own risk in order to "harm" Russia.

    Better options which help USA and "harm" Russia:

    1) Green light the Keystone pipeline - this will lower the oil prices immediately in a psychological reaction sort of way, and over time as the pipeline actually comes on line

    2) Start selling natural gas to Europe to reduce Russian dominance in this area.

    Both are big wins for US businesses, workers and tax payers. Sanctions makes all the same people losers.

  • Report this Comment On March 31, 2014, at 7:41 AM, scipiojr wrote:

    Clearly some of the comments on here are more motivated by hatred of Obama than common sense. Putin's moves are classic propaganda ones and have not considered the economic impact on Russia, which is not a major economic power.The Crimea will likely prove an economic loser for him and he has no plans to invade the Ukraine unless he's a bigger fool than I think. It's not the Cold War anymore and Russia is very dependent on the rest of the world economically. AJFF's ideas are much more sound---hit him economically and be patient.

  • Report this Comment On March 31, 2014, at 8:21 AM, lm1b2 wrote:

    Sell off our Oil reserve,what happens if we go to war?Why are we still allowing American Companies like GE,Pepsi,etc to Trade with Russia ?Why did we allow Timken in Akron Ohio to recently sign a multi million dollar contract with Russia ? Why hasn't Obama,and Congress passed serious economic sanctions against Russia to stop us from ending up in WW111 people !

  • Report this Comment On March 31, 2014, at 8:28 AM, pebear wrote:

    George Sorros is not a man that I like very much at all, actually I despise him. But he had made a comment last week that made sense. He said that Obama should not have posed the sanctions on the Russian Oligarchs because it forces them to keep their money inside of Russia where it will prop up the Russian economy. Russia is a gas station masquerading as a country. Take the sanctions off the Oligarchs and flood the market with cheap oil from the reserves and see how long the Russian economy stay afloat. Not very long.

  • Report this Comment On March 31, 2014, at 8:58 AM, dannystrong wrote:

    The Fool has missed the reason for the 'test sale' entirely. The Congressional Elections are coming up in 7 months. What better way to manipulate the anger of voters than to artificially 'make the economy better' by lowering oil prices?

    The Administration couldn't care less about the Crimea. But salvaging obamacare? Those are stakes (they believe) that are worth any dirty tricks there are.

  • Report this Comment On March 31, 2014, at 9:31 AM, Aquatavros wrote:

    It work work.

    (1) It will hurt the US shale energy resource production

    (2) It would hurt Canada than it would hurt Russia for US is the Canada's largest oil buyer

    (3) Arabic countries will be very unhappy by US driving oil down and what US has seen in Afghanistan/Syria/Libia/Iraq/Egypt so far would seem like a Cinderella story in comparison with what's come when the allies would no longer be allies.

  • Report this Comment On March 31, 2014, at 9:55 AM, Drifter855 wrote:

    People act like Russia doesn't have a reserve of its own. Or a contingency plan. Maybe start selling more if its nuke stockpile to Korea?

    Don't underestimate them. They're just a hop and skip away from becoming another North Korea.

  • Report this Comment On March 31, 2014, at 11:02 AM, dusty10x wrote:

    Threaten to send Obama over to handle their finances and health care....That should scare the heck out of them.....

  • Report this Comment On March 31, 2014, at 11:17 AM, RenaissanceTroll wrote:

    Umm, this is not "new" news. People like me have been commenting on using oil as a weapon to weaken Russian power (so dependent upon fossil fuel prices) for some time now. And, we don't even necessarily need to use our strategic reserve to do so; rather, we just need to keep what's been called the "New Industrial Revolution" in oil drilling technology going and keep on drilling that shale oil in North Dakota. And, when the energy bubble pops, Russian power will deflate along with it just like it did in 1984-85.

  • Report this Comment On March 31, 2014, at 11:38 AM, Rockyvnvmc wrote:

    It would make far more sense to build the Keystone pipeline, as well as leasing out far more lands held by the Federal government, to gas and oil exploration, as it's more sustainable, than drawing down our oil safety net.

    Or, a combination of both could be more palatable, only drawing down the SPR until Keystone comes on line and until new gas and oil leases could significantly increase our domestic production levels.

    Then there's the bottleneck in refining, since we haven't built a new refinery since the 1970's. That would have to be addressed, as well, in order to make this a long term push.

    We beat them the last time utilizing America's most powerful weapon, our economy. We could do it yet again, but first we would have to unfetter the engines of industry, that made America great, in the first place.

    As it stands, today, American industry has been stifled by excessive taxation & regulation, keeping our nation from properly recovering, from the financial upsets of 2008. You can blame this upon the Socialist ideology of the current regime in DC.

    America needs to create more jobs, than the number of Americans coming of age and entering the workforce, annually. Something that the current 'administration' has hindered, completely, in it's efforts to kill capitalism. (aka the Goose that laid the golden egg)

  • Report this Comment On March 31, 2014, at 11:59 AM, ceh4702 wrote:

    America is stupid. What Iran does is they make their own oil and fuel in their own country and they set their own internal price for gasoline and crude oil. It is a shame, we are too stupid to learn how to do this.

  • Report this Comment On March 31, 2014, at 1:30 PM, jerry8888 wrote:

    Rockyvnvmc - 1) The keystone pipeline will not be used by US oil. It is an Canadian pipeline, which their own government won't let them run across Canada due to the risk to the environment. Trust me, there is no profit for the US in Keystone (unless your wealthy and have invested in Trans-Canada)

    2) The economic powerhouse that launch the USA from 3rd world nation to world power was not US industry. It was the US consumer, after FDR put minimum wage into effect. To this day, the US economy is based on the US consumer (nearly 80%!) Stagnant wages have destroyed our buying power and corporate tax breaks and deregulation will do nothing to help in any fashion, so I think you might need to do some more research here, because historically, unfettered industry only brought us the Great Depression and we don't need a repeat of that Republican mess!

  • Report this Comment On March 31, 2014, at 2:03 PM, conservativefail wrote:

    Blah, blah, blah. The same old tired conservative talking points. Too much regulation. Blah, blah, blah. Too much taxes. Blah, blah, blah. Drill, baby, drill. Blah, blah, blah.

  • Report this Comment On March 31, 2014, at 2:15 PM, BenHammer wrote:

    We would have the same effect by building the Keystone pipeline. We put more Canadian oil on the market and keep our reserves. And it doesn't cost us anything while we create jobs.

  • Report this Comment On March 31, 2014, at 2:56 PM, ThatGuyInTheBack wrote:

    Do you guys at the Fool even know how to use Google? Or a calculator?

    The USA uses about 20 million barrels of oil a day. The SOR has about 727 million barrels. That's about 36 days of supply. If we released it at about 1/10th of what we could release, we could make it last about year.

    And then what?

    So sure, we can release some oil and bring down prices, for a while. A very little while. The Saudis need $85 a barrel for break even. How long do you think they plan to go along? How many billions do you think they, and our oil producing allies are willing to lose over a dispute about which none of them care?

    Some secret weapon. More like a secret popgun.

  • Report this Comment On March 31, 2014, at 3:33 PM, smilingdon wrote:

    Frankly I think Putin would get a real long laugh after we drain our SPR! This seems to be a stupid idea to me since we rely on that for extreme emergency or war.

    What do I know, I voted for Goldwater!

  • Report this Comment On March 31, 2014, at 3:36 PM, nmwander wrote:

    These dipsticks over at our Govt Bldgs in DC have lost their minds.

    The reason why its called "strategic oil reserves" cuz we put it there so's we'd have enough oil to power the military in case we go to war.

    So while all the slope-heads are fist pumpin and yelling out "whoo-whoo-whoo...take that ruskies"....

    China masses for attack.

    And we're out of gas.


  • Report this Comment On March 31, 2014, at 3:44 PM, johnnyfrankie wrote:

    Yea, good luck with that 'action'! I'm sure Russia is shaking in their socialistic boots!

    The world is not that complicated and the US policies of the present administration are the weakest since Carter. Get ready for other countries to follow suit.

  • Report this Comment On March 31, 2014, at 4:19 PM, johnwest2 wrote:

    Keep the oil reserves just send in the obamacare team Sebelius Reid and Pelosi let them start up Kremlincare that will ruin them for sure.

  • Report this Comment On March 31, 2014, at 4:33 PM, utilitybug wrote:

    Talk about nuclear solution. The fallout of manipulating oil prices will hit not only Russia - Saudi Arabia, Mexico, and Canada will suffer as well - all our allies. In addition, Nigeria and Libya will destabilize even more as they are heavily reliant on oil revenues. The ones that will benefit will be Asian countries that will use the opportunity to stock up on cheaper oil needed for their economies.

  • Report this Comment On March 31, 2014, at 5:19 PM, steveg541 wrote:

    I dont think America gets it..the Russians have plenty of friends, including the Chinese. They do not need...and aren't afraid of the buffoons in Washington. It is about time our government started focusing on what is going on at home.

  • Report this Comment On March 31, 2014, at 7:55 PM, fulredy wrote:

    Tell me again, why is it our business to get involved in a regional dispute with Russia?

  • Report this Comment On March 31, 2014, at 8:09 PM, jasmith909 wrote:

    We could always invade Iraq again.

  • Report this Comment On March 31, 2014, at 8:16 PM, tom474e wrote:


  • Report this Comment On April 01, 2014, at 3:42 AM, RandomSaint wrote:

    I think America is going to need that reserve for when the well dries up. It will eventually and it will be good to know America has a reserve that will last for several years while a solution is worked out.

  • Report this Comment On April 01, 2014, at 9:38 AM, Fight4Justice wrote:

    In 1992 the US and Great Britain signed an agreement with the Ukraine to ensure its sovereign borders and for its part the Ukraine agreed to hand over all nuclear weapons which it did. I believe that it is vital that we always honor our commitments. The use of the SPR could very well financially harm the Russian appetite for further expansion and it is certainly better than our being slowly pulled into some kind of military involvement. Also, the NPR can be replenished even as it is being used. Finally, rest assured that our coming to the defense of the Ukraine is vital to our own national security not to mention that of Europe.

  • Report this Comment On April 01, 2014, at 10:15 AM, ghelmz21 wrote:

    It sure is easy in this world to get confused as it appears the people of Crimea and also the Ukraine want to be part of the Russian Federation so the support of the news media and big governments evidently trumps the peoples will. Curious as to the why our elites pass off the peoples will111

  • Report this Comment On April 01, 2014, at 10:35 AM, DrG wrote:

    Not sure about this idea but don't we have 500,000 barrels leaking into the Gulf or a river somewhere in this country every few weeks.

  • Report this Comment On April 01, 2014, at 10:54 AM, maxoverload wrote:

    IMHO , another move by this admin weakening this countrys self sustainability , Its our defense reserve and has No business being tapped . Just bleeding this country to death .

  • Report this Comment On April 01, 2014, at 11:01 AM, maxoverload wrote:

    the united monetary fund has just given billions of dollars to this area , with the expectation of another (country) member joining the UN , Russia does not want this and has threatened this membership , the billions given to the Ukraine , are being paid to Russia for debt , Russia will take this money , and build its military up further . And our admin now is going to deplete our reserves further ? whats the foolhardy logic in this .

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