There are a few obvious problems with that suggestion, the first being that not many people have a billion dollars to spare, and then there's the challenge of finding storage facilities at a time of a glutted oil market.

 

But what the US President is doing, filling the country's strategic oil reserve, makes perfect sense because the price war launched by Russia and Saudi Arabia will not last, for two very obvious reasons.

 

Firstly, neither can afford the fight and secondly, neither Russia nor Saudi Arabia is run by people silly enough indefinitely give away their country's most valuable asset at bargain basement prices. At some point an alarm bell will ring and it will be game over.

 

Right now, it doesn't look like either side will blink because what's happening is a classic personality clash that started as a squabble over whether to extend production cuts to help lift the oil price and ended with the commercial equivalent of nuclear war.

 

Why it had to go that far is an interesting question with the answer perhaps to be found in the government structure of Russia and Saudi Arabia - both are a form of dictatorship even if one is a kingdom (perhaps the ultimate dictatorship) and the other run by a band of thugs.

 

The key point is that neither is answerable to a parliament or elected representatives of the broader population so when it comes to doing something crazy because it seems like a good idea at the time, or a way to score a point over an opponent, then it gets done, whatever the cost.

 

The problem in this mega-sized game of chicken is knowing exactly who is the real target.

 

The Saudis have made it clear that they want to hurt Russia because it defied the wishes of the world's de-facto oil leader.

 

The Russians see an oil-price war as a way to hurt high-cost US shale producers which have been feeding off the high oil price created by OPEC and Russian production cuts.

 

Both Saudi Arabia and Russia will achieve their objectives. Russia will be hurt. US shale producers will be hurt, but the Saudi economy will also be hurt. Pain all round.

 

Oil consumers, and that's everyone else in the world, will get a free kick though the dramatically lower oil price is likely to trigger a burst of deflation (the opposite of inflation) which can have seriously disruptive effects on the global economy and certain commodity prices.

 

Gold, for example, fell sharply late last week because of deflation which has the effect of lowering real US interest rates (the rate after allowing for inflation - which is likely to be negative this year) even as nominal interest rates rise.

 

The net result is that US Treasury bonds have become more appealing than gold - which is a seriously odd turn of events as the world circles the drain that leads to a global recession.

 

What neither side in the Saudi vs Russia brawl seems to appreciate is that the biggest victims of an oil war are countries which rely heavily on oil to balance their budgets, and the US is not one of them - quite the opposite actually, which is why Trump is buying oil and saying thanks to Russia and Saudi Arabia at the same time.

 

It would not surprise The Slug if a few clever investment bankers are doing the same thing as Trump, as well as renting storage space on any old oil tanker they can get their hands on.

 

The more important questions than how the war started or how it's being fought, are those of how long will it last, and who gets hurt apart from the lead players?

 

The answer to the second question is everyone producing oil at more than the current Brent-quality crude price of US$33.85 a barrel - and any project developer (oil or gas) who has not finalised the approvals and funding process because banks are going to be very wary of lending during price war.

 

For Australia that means Woodside Petroleum has its job cut out to finalise its twin LNG proposal for the Scarborough and Browse projects, with another timetable deferral looking more likely by the day.

 

The first question of how long is more difficult but it seems highly unlikely that either side in the oil-war of Saudi vs Russia either (a) wants an indefinitely lower oil price, or (b) can afford it.

 

The US, meanwhile, is an interested spectator watching its small shale oil industry melt under the heat of a $30/bbl world while the rest of the economy enjoys a summer of cheap fuel.

 

As a foot-shooting exercise by the Russians and the Saudis it doesn't get much better than this.