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Oil's Spare Capacity Illusion

Jun 12, 2026 by P. Nordvik

Spare capacity is the oil market's central bank — production held back that can, in theory, be released to cap any price spiral. But the reserve is concentrated in a few states, its true size is unaudited, and its release is a sovereign decision taken for sovereign reasons.

A promise, not a stockpile

Every major price shock has featured spare capacity that was smaller, slower or more conditional than assumed. Analysts who treat the figure as geology rather than statecraft keep being surprised on schedule.


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