A editorial by Nick Guarino
October 3, 2026
Reserve releases may buy time. My concern is what happens when that time runs out whe the reserves run out.
1.Opening
This is Nick Guarino. Today’s commentary is called “The Cat’s Out of the Bag.”
Claims about coordinated shortages, reserve exhaustion, and future military decisions are my suspicions and scenario gleamed from my sources.
Is it not amazing what you can do when you tell the story CNN forgot to report,
Now you know why I have been described as the most hated man on wall street.
A little reporting can change the equation. Once people start asking who has the barrels, who is releasing them, and who is profiting from the shortage, the oil story looks different.
2.Who benefits from the shortage
Uncle Sucker—the American consumer—has been getting suckered again.
We have been asking how the oil trade works when supplies tighten. Crude is one market. Diesel is another. You can have crude available and still have trouble producing or delivering the diesel people need.
The spread between the cost of crude and the price big oil gets for the refined products is called the crack spread. Refined fuel is where there is big money to be made and things gets interesting. In the scenario I’m disclosing you need to understand how a normal crack spread of, thirty-to-thirty-five-dollar spread becomes a hundred-and-fifty- or as much as a two-hundred-dollar spread on diesel.
You got to create shortages to achieve that kind of magic
Put Europe holding back reserves into that evil brew that they up till now they refused to release. Even though they promised a 100 million barrel release. A joke since we are short at least 10 million barrels a day. In ten days that release is gone. Add Russia withholding diesel as Ukraine drone targeted their refineries deep into Russia. To this evil mixture add due to Iranian attacks damaged Gulf refineries, and a little spice to the mix is disruption around Hormuz. Not to be left out of the fun is Chinese refiners keeping more fuel for domestic use and halting exports. .
That is my explanation for a energy squeeze that is coming….. After the elections.
The question: who benefits when fuel is scarce and the refining spread blows out?
The consumer pays. The sellers with available supply collect. Called big oil. Their profits are the most in the history.
Americans have been carrying too much of the burden while others held back barrels. People benefiting from high prices had little reason to hurry the relief. And the politicians are to stupid or too payed off to do anything about it.
3.The pressure brings a release
Now look at the two reports supplied for this commentary.
They describe an European agreement to release up to one hundred million barrels of emergency crude oil and diesel over four months, with a focus on diesel. They also describe American pressure, including the threat of a diesel-export ban, and a commitment against export bans.
That is crude and diesel combined. It is not one hundred million barrels of diesel alone.
According to the fuller report, diesel’s premium over crude temporally fell as traders anticipated the extra supply.
Ring, Ring. The phone wakes up.
“Wait a minute are you reporting. Europe has supplies sitting there while we’re taking the heat?”
“That’s the argument, Sir.”
“Then get them to release it. At least until after the elections”
Sir that is a temporary solution. The world is short 2 billion barrels of oil. And emergency reserves will run out completely in December
I’d like to think our disclosures helped. Our recent reporting caused should we say a lot of activity.
4.The barrels release will only buy a little time
Don’t make the mistake of treating an emergency release as a permanent supply source.
These are finite barrels. They can ease a crunch. They can give the market breathing room. They cannot keep replacing interrupted production forever.
One hundred million barrels spread over roughly four months works out to about eight hundred thirty thousand barrels a day. Useful relief—but the effect depends on how much supply is missing and how quickly those emergency barrels arrive.
My more severe scenario assumes a cumulative shortfall of a billion to a billion and a half barrels can only be solved if the straights are opened and Russian production is back on line.
I have also raised concerns about American strategic reserve located in salt-cavern which have reached supply limits, Chinese emergency supplies are exhausted, and European reserves could last only a matter of months.
I do have evidence establishing that America is about to reach cavern salt dome-damage threshold. China is down to a military minimum and Europe releasing its last reserves will soon peter out.
My warning is based on the realty that the world is consuming more oil than its producing. Global demand is 100 million barrels a day. And global production reaching market is at best 80 million barrels a day. Now add to the fact that emergency reserves are running out and total oil supplies have dropped by over 2 billion barrels.
And oil inventories are not recovering.
Well let me put it to you this way. We are in deep shit Batman!
A simpler question: what replaces the emergency barrels as they run out as the disruptions continues?
My expectation is that European releases could push oil prices a little lower, possibly into the ninety-dollar range, and temporarily ease pressure on winter diesel, heating oil, and other distillates. Key word is temporarily.
5.The election and Trumps next move
Now comes the political part of our discussion.
Lower fuel prices before an election are useful to the party in power. Trump is not personally on the congressional midterm ballot, but his party is. He can still claim credit: “Look, prices are coming down.”
My suspicion is that relief MAY buy him political time.
And my darker forecast is that, after the election, his calculation could change. I don’t think Trump wants to go out a loser. I think he wants a legacy that goes beyond restraining Iran’s nuclear program to defeating the regime itself.
In the blunt version of my scenario: he buys time, gets past the election, and then bombs the shit out of Iran.
When that happens, Iran only bid for survival is to play their last remaining card… retaliate against shipping and Gulf state energy infrastructure. A renewed or wider interruption around Hormuz could overwhelm the relief those reserve releases provided.
I interpret the Patriot deployments to gulf oil states described earlier as preparation for Iranian retaliation.
6.Russia opens the door a crack
And now Russia is opening the door a crack. Reuters reports on October 2 that Deputy Prime Minister Alexander Novak says Moscow will consider partially reopening diesel exports if production exceeds domestic demand. The ban for fuel producers remains extended through October. This is a conditional opening, not a confirmed restart.
My take: even the possibility of some Russian barrels coming back gives traders another reason to mark down the shortage premium. But an announcement does not fill a tanker. Watch the actual shipments. And available Russian export supplies are minuscule.
Here is a measure of the squeeze. S&P Global reported that Russian Black Sea diesel and gasoil export shipments fell to zero in the week ending September 24. Total Russian diesel and gasoil shipments were still 81,000 metric tons that week for domestic consumption. So the Black Sea stoppage was complete for that measured week;
And the scale of lost supplies out of Hormuz is enormous. EIA estimates petroleum-liquid flows through the strait averaged 21.6 million barrels a day in the fourth quarter of 2025, then 4.9 million in the second quarter of 2026. That is a decline of about 77 percent in transit through that route. And for the 3rd quarter lower still.
That is why I keep coming back to diesel. Crude reaching a buyer does not automatically mean a damaged refinery can deliver the fuel a trucker needs. Reserve releases and a possible partial Russian reopening can slightely ease the pressure. Sustained refinery production and delivered cargoes are what make the relief last. And I don’t see that happening.
7.What I am watching
So here’s the deal.
The emergency barrels may bring prices down a little for a while. People may mistake that relief for a lasting recovery in supply.
I think that could be a dangerous assumption.
If the barrels flow and regular supply recovers, the relief can hold. That has a snowballs chance in hell of happening.
If reserves are drawn down while the conflict expands, the next squeeze could be worse. And that is exactely what I am predicting.
That is the scenario I am warning about: a temporary lull, followed by a much larger shock.
The cat’s out of the bag. Now watch whether the barrels actually arrive. Watch what happens to refinery output and shipping. And watch the military decisions after the election.
SHOW ME THE FREGGING OIL! Not bullshit press releases!!!
This is Nick Guarino. That is my opinion.
8.Research references
Reuters, October 2, 2026 — Russia will consider partial lifting of diesel export ban in case of overproduction, Novak says. https://www.reuters.com/business/energy/russia-will-consider-partial-lifting-diesel-export-ban-case-overproduction-novak-2026-10-02/
S&P Global, September 29, 2026 — Russia’s Black Sea diesel exports fall to zero for first time on record. https://www.spglobal.com/energy/en/news-research/latest-news/refined-products/092926-russias-black-sea-diesel-exports-fall-to-zero-for-first-time-on-record
EIA, September 2026 Short-Term Energy Outlook — historical Hormuz transit estimates. https://www.eia.gov/outlooks/steo/pdf/steo_text.pdf
Reserve-release discussion is based on the two news excerpts supplied by the author. The political forecast and imagined phone call are editorial speculation. Sources are reference material, not part of the spoken narration.