A lot of gas trapped, oil reserves tapped, and Live Nation gets a (tiny) cap

0:01Stacey Vanek Smith:NPR.

0:11Cardiff Garcia:This is The Indicator from Planet Money. I'm Waylon Wong, and I'm joined today by my co-host, Darian Woods.

0:17Stacey Vanek Smith:Hey, Waylon. Well, today we're also joined by Planet Money's Sarah Gonzalez.

0:22Cardiff Garcia:Hey, guys. Nice to be here. And on video this time, I did my hair for you. It looks beautiful. And while everyone locks in not just their glam, but their prediction market bets for the Oscars this weekend, we here at The Indicator will lock in our... Indicators of the Week!

0:41Stacey Vanek Smith:So it's that time of the week when we talk about the most interesting numbers from the news.

0:46Cardiff Garcia:On today's episode, we are talking about...

0:49Stacey Vanek Smith:Gas prices going up, up, up.

0:51Cardiff Garcia:And a plan to maybe get gas prices to go back down, down, down. And Live Nation and Ticketmaster live to see another day. Nine lives, those guys. Those underdogs.

1:24Cardiff Garcia:It is Indicators of the Week, Darian Woods. You are up first.

1:28Stacey Vanek Smith:So my indicator is 20, as in 20 million barrels of oil trapped, which is 20 % of global supply. And it's meaning gasoline prices have gone up 20%.

1:38Cardiff Garcia:I am watching the gas station closest to me. The numbers do keep ticking up.

1:43Stacey Vanek Smith:Yeah, so I'll explain the mechanics of how we got here. So 20 million barrels is how much oil and petroleum usually goes through the Strait of Hormuz every day. Now, shipping along that route has all but stopped. And so that gives you a sense of how much oil the global economy is missing due to the U.S.-Israel war with Iran.

2:03Cardiff Garcia:Are you able to put that number in like a historical context or like put it in perspective?

2:07Stacey Vanek Smith:Yeah. So this is the largest disruption to oil ever. It's far more than was blocked during the Iranian revolution. And that was huge at the time. As mentioned, this blockage is about 20 percent of global oil supply.

2:21Cardiff Garcia:Sounds not great. and you're saying gas prices are up 20 % because of this.

2:26Stacey Vanek Smith:Yeah, roughly 20 % over the month. And on Wednesday, the average price of gasoline at the pump was$3.58 a gallon.

2:34Cardiff Garcia:Okay, so high energy prices obviously slowed down the economy, but I don't know, is this going to be as bad as the oil crisis of the 1970s? I mean, we use gas more efficiently now, right? Like our cars, our electricity generators, they don't need as much fuel as they used to.

2:50Stacey Vanek Smith:Yeah, that is totally true. Our economy makes more stuff and creates more value with a lot less oil than we used to. But as mentioned, this is a huge disruption. And so if it goes on, I would expect prices to rise all over the economy.

3:07Cardiff Garcia:But don't we make so, so much oil in the US? I mean, we're a net exporter.

3:11Stacey Vanek Smith:That is true, but it doesn't shield you from what's going on around the world. You know, this is a global commodity sold at world prices. And energy independence only gets you so far.

3:22Cardiff Garcia:Well, you know, I think I'm going to give up trying to sort my plastic recycling because it seems kind of futile given what we're facing here. Maybe I'll leave the problem solving to, I don't know, some intergovernmental agency. Sarah? Oh, perfectly setting me up for my indicator of the week, which is 400 million. That is how many millions of barrels of oil are being released from the global strategic oil reserves because of the U.S.-Israel war in Iran. Okay, so this is big news this week? Yeah, yeah, yeah. This is the largest coordinated release of crude oil ever among the 32 countries that make up the International Energy Agency and its oil reserves.

4:00Cardiff Garcia:So this agency has been around since the 1970s after the oil crisis of 1973. and it is only the sixth time that these countries have voted to release oil. Okay, and where is this oil reserve held? Okay, so the U.S. pulls from its own strategic petroleum reserve. So we, the U.S., keep oil underground in these, like, salt caverns in case we ever need a bunch of oil. Other countries also have their own stockpiles.

4:25Stacey Vanek Smith:All right, and this has nothing to do with OPEC releasing oil?

4:28Cardiff Garcia:No. So, okay, here's how you can think about it. There are a bunch of OPEC oil-producing countries and these OPEC countries sort of determine how much oil everyone produces, meaning how much oil we pump, and then that influences oil prices around the world, right? The International Energy Agency and its stockpile is more like a safety net for countries that are some of the biggest buyers of oil. So it's kind of like a rainy day fund of oil for the biggest oil consumers in the world. So that is the U.S., Japan, most of the countries in Europe, Canada, Korea. So while OPEC is more like oil underground ready to be pumped.

5:05Cardiff Garcia:The IEA oil reserve is oil that's already been like bottled up, so to speak. So it really is this safety net to protect the global economy if there is a shock to global oil supplies like we have right now because of the whole Strait of Hormuz situation.

5:21Stacey Vanek Smith:Right. And so this is meant to ease oil prices. That's what it's meant to do.

5:25Cardiff Garcia:Has it worked? I mean, shortly after the announcement that there was going to be like some fresh batches of oil hitting the market, it did help a little bit. But then prices started to creep back up because, like Darian says, this is the worst disruption to energy markets. Some experts have said, like, we can try all these tools and all the tricks we can think of, but there really is no substitute for letting oil come through that really important shipping lane.

5:49Stacey Vanek Smith:So just doing some quick math, 400 million barrels of oil, 20 million barrels per day that went through the Street of Hormuz. And so you've got, what, 20 days worth of supply. And who knows how long this conflict is going to go on for.

6:05Cardiff Garcia:Yeah, the world has a daily demand for 100 million barrels of crude oil and 20 million of that comes from this street. Like, how do you substitute that? I don't know.

6:14Stacey Vanek Smith:Okay, well, thanks so much, Sarah. And now on to the final indicator of the week, Weyland Wong.

6:18Cardiff Garcia:Okay, my indicator is 15%. That is the maximum service fee that Live Nation Entertainment will be able to charge for tickets. And this 15 % cap comes out of a proposed settlement between Live Nation and the Justice Department. Live Nation, of course, owns Ticketmaster, and the DOJ plus dozens of states had sued Live Nation in 2024, alleging that the company had an illegal monopoly in the live entertainment industry. This is just like a company that inspires a lot of fear and loathing among its fans, right? I think a lot of people were rooting for the government to break up Live Nation and Ticketmaster.

6:57Cardiff Garcia:Yeah, because besides Ticketmaster, Live Nation also owns and operates hundreds of venues. It manages artists. It's a concert promoter. It's like the whole enchilada. So some kind of breakup was one possible outcome of this court case. The trial started just last week and the two sides announced the proposed settlement on Monday. Live Nation says it will loosen up somewhat on the ticketing side. For example, the amphitheaters that it controls will let up to half of those tickets be sold on any marketplace. And then there's that 15 % cap on ticket service fees that I mentioned earlier.

7:31Stacey Vanek Smith:One of our colleagues was actually just shopping for tickets for a Gorillaz concert in Denver. And he said that the Ticketmaster service fee was 36%.

7:39Cardiff Garcia:Yeah, he showed me a screenshot and I was like, oh my gosh. So if the judge approves the settlement, we shouldn't be seeing those kinds of percentages anymore. All right. But Live Nation isn't breaking up and it is not divesting Ticketmaster either, right? So I wonder if a lot of fans are going to be disappointed. Like they think the settlement doesn't go far enough. Yeah. I mean, certainly a bunch of state's attorneys general think that way because New York's attorney general was one of a couple dozen states that are not accepting the settlement. They say they're going to keep fighting Live Nation in court, even without the DOJ.

8:13Cardiff Garcia:So that's my indicator. And Sarah, it was super fun to have you on. Yeah, it was so nice to be here. See you at the gas line. Or the ticket line. Or the ticket line. Being 36 % in fees. Or 15%, Waylon. 15%. Or 15%. Things are looking up. I'll use my savings to buy more gas.

8:35Stacey Vanek Smith:This episode was produced by Angel Carellis with engineering by Jimmy Keighley. It was fact-checked by Corey Bridges. Julia Ritchie edited this episode and Kate Kincannon edits the show. The Indicator is a production of NPR. Catch this episode on YouTube, youtube.com slash planet money.

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