Ok, I have to comment about the chart on oil prices that shows a massive rise from 2020 to 2022, which the article blames on the Russian invasion of Ukraine, even though that didn't happen until early 2022 and the spike began 2 years earlier. That's just jouranlistic misconduct. Let me tell you what actually happened because, for some reason, nobody actually talks about it. First, some context:

1. OPEC/OPEC+ meet every 3 months to adjust output based on expected demand to keep oil prices relatively stable. That is, they want to maintain a floor and a ceiling. Too low and they don't make enough money. Too high and it causes political instability and threatens oil-for-security guarantees that have existed since FDR agreed to such with King Faisal of Saudi Arabia in 1945;

2. Oil has different flavors based largley on how light or heavy the hydrocarbon blend is (called API Gravity) and the sulfur content. this is what Brent and West Texas Light Crude means. Generally, lighter crude is more valuable because it makes more valuable products like avgas and gasoline;

3. Oil is traded on both spot (physical) markets and future (paper) markets. A futures contract is a standardized contract for 1000 barrels of oil of a particular blend delivered or received (depending on which side you're on) on a given date. Generally, when we see oil prices in the news we are looking at futures prices. Historically short-dated futures prices and spot prices have been pretty similar. Spot prices are proprietary but this didn't matter. Now it does as that link has been broken [1]

3. When the world shut down in March 2020 due to the pandemic oil demand fell off a cliff and supplies backed up in production facilities. People weren't taking delivery and oil prices briefly went negative (technically, this was an "extreme contango" market);

4. Because of this, the Trump administration cajoled MBS to get OPEC to cut oil production [2][3][4]. This was a 2 year agreement that initially cut oil production by 9.7 million barrels per day ("Mbpd") going to to 6.3Mbpd ultimately. IMHO the administration panicked that US oil producers would go belly up. This represented ~10% of the world's crude oil supply;

5. In 2021 oil demand came roaring back. Prices went through the roof; and

6. Republicans blamed Biden. The Biden administration tried to get OPEC to increase production [5] and Biden never blamed OPEC or even Trump. Democrats took the "oil companies bad" approach.

This 2 year deal was completely unnecessary. OPEC would've cut production as necessary anyway. And it entirely matches the increase in oil and gas prices and inflation for this 2 year period and nobody ever mentions it.

Russia invading Ukraine in early 2022 was just the cherry on the cake.

Look at that chart. Where it's marked as "COVID-19" is March-April 2020. The deal begins in June 2020. It ended in June 2022, which is at the exact point of the big red bar to the right of the Russian invasion, after which oil prices dropped despite the fact that the war was still going on (and still is).

[1]: https://www.reuters.com/markets/commodities/iran-war-has-sha...

[2]: https://www.reuters.com/article/economy/special-report-trump...

[3]: https://www.reuters.com/commentary/reuters-open-interest/tru...

[4]: https://www.reuters.com/article/business/opec-agrees-largest...

[5]: https://www.reuters.com/world/middle-east/us-call-opec-its-a...

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hedora an hour ago | parent [-]

I’ll just add that from 2016-2020, Trump perpetuated a zero interest rate policy despite the economy booming.

Macroeconomics 101 says this will cause inflation on a few year delay, which is what happened, and Biden was also blamed for that.

	▲	jmyeet 19 minutes ago \| parent [-]
		ZIRP (also, Quantitative Easing or QE) was the policy since 2008. Rates actually rose in the first Trump admin [1] so this isn't quite as causative as you suggest. Other things did happen that contributed to the inflation shock of 2020. This goes back to the Obama admin too, specifically: 1. After the OPEC oil shock of 1973, the US banned crude oil exports (in 1974 I believe); 2. In the early 2010s, hydraulic fracturing ("fracking") was invented, which created the US oil boom in the Permian Basin (from west Texas up to the Dakotas). Almost all oil wells in the last 10-15 years have been fracked. This was a massive capex outlay by oil companies at the time. This is important; 3. Obama, facing a hostile Congress in 2015, wanted solar and wind subsidies so he made a deal with Congress that included lifting the 1974 crude oil export ban. Oil production quickly went up and ever since we've been exporting ~3Mbpd of crude oil, which is essentially excess demand, and this is how the US became the largest single oil producer in the world; 4. OPEC but really Saudi Arabia in particular crashed the oil market in 2015-2016. There are two competing theories on why they did this. A lot of people think it was to kill the frackers. I don't think this makes sense. It was years after fracking came about. I think it was to punisht he US for becoming a crude oil exporter. And it worked. Roughly half of oil producers and services companies went bust [2]; 5. When oil prices are low, producers will generally suspend production until prices increase because they're selling at a loss. They'll layoff staff and come back when prices improve. So this is self-correcting. But oil companies had to keep selling because of their massive debt; 6. Because of (5), oil inventories exploded and when Trump took office in 2017, oil experts believed that oil prices would remain low because of persistently high crue oil inventories [3]; 7. Trump pulled out from the JCPOA in 2018. To counter expected Iranian sanctions, Trump got OPEC to increase production [4]; 8. In October 2018, Saudi agents, allegedly on the orders from MBS, killed Saudi citizen and US permanent resident Jamal Khashoggi in a Saudi embassy in Istanbul. I actually believe this is relevant to what happened subsequently; and 9. In November 2018, Trump granted 8 waivers to Iranian oil exporters to continue exporting [5]. This crashed the oil markets [6] and basically screwed over OPEC. But I think MBS had to eat it because of the Khashoggi fallout. So come 2020, it is my belief that when Donald "Art of the Deal" Trump got MBS to cut oil production and then MBS later refused to increase production (to both Trump and Biden), it was payback for 2018. So I don't think there's any causation between ZIRP and the inflation shock. It was a combination of two things: the oil price shock and the pandemic became the perfect environment for companies to raise prices, something many believed they'd get punished for prior. This is the era when dynamic pricing really took off. [1]: https://www.reuters.com/business/energy/us-oil-producers-pac... [2]: https://fred.stlouisfed.org/series/FEDFUNDS [3]: https://www.eia.gov/todayinenergy/detail.php?id=29532 [4]: https://www.cnbc.com/2018/06/22/opec-ministers-strike-deal-o... [5]: https://www.cnbc.com/2018/11/02/trump-will-grant-8-waivers-t... [6]: https://www.cbsnews.com/detroit/news/the-great-oil-crash-of-...