It was not too long ago when many people believed that oil prices would be lower for longer, says Phil Flynn of the PRICE Futures Group.

Those off base productions along with overly optimistic expectations about how renewable fuels would fill the void has left the market undersupplied. The Biden administration’s anti-energy policies have only exasperated that situation and now oil prices are surging to the highest level since 2008, and with the world facing yet another energy crisis. Yet, Crude Oil (CL=F) sold off on reports that an Iran deal is near.

Oil prices are blowing up as Russia’s war crimes in Ukraine become too much for many oil buyers to fathom. WTI prices hit the highest level since 2008. Cash buyers are not buying Russian crude and that is causing a price spike because they must look elsewhere for supply. OPEC plus Russia is not going to be any help as it appears that because of OPEC’s deal with Russia they seemed to ignore that anything was going on in Ukraine. President Bidens along with the International Energy Agency 60-million-barrel oil engineered release from global strategic reserves is having no impact on cooling off prices.

The EIA Data was extremely bullish as the EIA reported big draws in crude inventories at a time when war threatens supply. The EA put commercial crude oil inventories down by 2.6 million barrels from the previous week despite a 2.3 million barrel from the Strategic Petroleum Reserve at 413.4 million barrels, US crude oil inventories are about 12% below the five-year average for this time of year.

Total motor gasoline inventories decreased by 0.5 million barrels last week and are about 1% below the five-year average for this time of year. Finished gasoline inventories increased, while blending components inventories decreased last week. Distillate fuel inventories decreased by 0.6 million barrels last week and are about 16% below the five-year average for this time of year. Propane/propylene inventories decreased by 0.8 million barrels last week and are about 20% below the five-year average for this time of year. Total commercial petroleum inventories decreased by 3.9 million barrels last week.

With a war in Ukraine, these numbers are disturbingly tight. That’s why President Biden is pushing the Iran Deal. Oil prices dipped on a report from energy journalist Zandi that “I have received definitive news that within the next 72 hours the Iran nuclear deal will be signed in Vienna."

The Iran nuclear deal may cool off prices in the short term but it makes one wonder if anybody in the world has learned anything about depending on bad actors for energy supply. Gabriel Noronha, a Former Iran official at the state department who is not a partisan guy, is warning that this impending deal with Iran is a major threat to US National security. Mr. Noronha was fired By President Trump for tweeting that “President Donald Trump is unfit for office and was to blame for the mob attack on the US Capitol” and is now tweeting dire warnings about this Iran deal.

He tweeted: "NSC and EU colleagues are so concerned with the concessions being made by @RobMalley in Vienna that they’ve allowed me to publish some details of the coming deal in the hopes that Congress will act to stop the capitulation. 'What’s happening in Vienna is a total disaster' one warned. The entire negotiations have been filtered and 'essentially run' by Russian diplomat Mikhail Ulyanov. The concessions and other misguided policies have led three members of the US negotiating team to leave."

Mr. Noronha went on to list the specifics of what this deal might be and he tweeted that “This is a long and technical thread, but here’s what you should know: the deal being negotiated in Vienna is dangerous to our national security, it is illegal, it is illegitimate, and it in no way serves US interests in either the short or long term."

Despite the green energy push, the Energy Information Administration (EIA) is reporting that Petroleum and natural gas remain the most-consumed sources of energy in the United States through 2050, but renewable energy is the fastest growing. The EIA projects that US energy consumption will continue to grow through 2050 as population and economic growth outpace energy efficiency gains. Petroleum and other liquids will remain the most-consumed category of fuels by 2050. The transportation sector will consume most of these fuels, particularly motor gasoline and diesel.

Nevertheless, The EIA says that the production of renewable energy will grow more quickly than any other fuel source through 2050. Consumption of natural gas will continue to grow as well over this period, maintaining the second-largest share of all fuel sources, driven by expectations that natural gas prices will remain lower than historical levels.

In other words, higher prices for longer for oil, gasoline, and natural gas.

Learn more about Phil Flynn by visiting Price Futures Group.