RE:SPR Depletion - So What?
I don't know... I think they will begin to fill the SPR sooner rather than later. The release was a way to buy votes with public assets at no cost to the Democrats. Otherwise why would the release end around mid terms? Why did Biden release oil from the SPR in the first place when Russian petroleum products only made up 8% of imports to the USA and the sanctions haven't even come into effect yet?
Optics are everything and the public has a short memory. When Putin finally reacts to the incoming sanctions he will be the scapegoat as to why the cost of WTI is raising towards the cost of Brent as we do everything we can to support Europe. It won't be the sudden stop of magic oil that's been flooding the north american market for political gain. Even though the Republicans will be sure to do everything they can to point out Bidens policy error as he runs out of bullets before this war of economic attrition really begins.
All it takes is a shift in public messaging. When filling the SPR becomes a matter of national security in the face of an energy crisis vs a tool to help american consumers navigate inflation. Suddenly filling theSPR becomes palatable. I could be wrong however I don't predict the same drop in energy prices as you do in the short term (1-1.5years.) I instead predict it will become the weapon of choice in this war of economies bringing wild price swings as we adjust to the "new normal."
In any event I view the SPR releases ending as bullish for us. At the very least the WCS differential should shrink. Let's hope a major hurricane this year doesn't knock off more US production capacity... You know... the physical infrastructure emergencies and sudden embargos the SPR was designed to combat.