#279 | Matt Schrimpf; Price of oil, strategic reserves, enterprise succession

About this episode

Vance sits down with longtime friend Matt Schrimpf, CEO of the 90-year-old family fuel wholesaler PSA Enterprises, for a deep dive into the mechanics of oil and gas pricing — refinery capacity decline, the "backwardation" and "widow maker" spread trades, negative oil prices in 2020, the political calculus behind tapping the Strategic Petroleum Reserve ("it's elections, plain and simple"), and the dollar's grip on global oil trade. The two riff on parallel Vance-brand themes: ESG-driven capital misallocation at companies like ExxonMobil, government subsidies distorting refinery-to-renewable-diesel conversions, and Vance's own Stewart Brand/BP anecdote about how "the government has always willing to write the check" shapes corporate behavior. A major thread covers Ukraine/Russia sanctions, media filtering of Putin's own words, and Vance's milkshake-theory explanation of dollar dominance amid inflation fears. The back half pivots to enterprise succession: PSA has passed through five generations, with Matt detailing the hard, deliberate family conversations, buyouts, and estate planning (family limited partnerships that compensate uninvolved heirs with non-business assets) that kept the business intact — a structure Vance immediately maps onto farmland succession dynamics. The episode closes on raising the next generation inside a legacy business, the constant "eyes are always on you" scrutiny that comes with being family, and a light speculative question about when gas-pump fueling will feel as archaic as horseback riding.

“It's elections. I mean, it's plain and simple. You're, it's, it's votes... as an industry, the biggest thing we put out on our street signs... is the price.”

“Crude oil went negative for the first time ever... it went down to a negative $34 a barrel... it's amazing how people can find a little more room when the price gets cheap enough, or in this instance, potentially getting paid to take it.”

“My grandfather was always very much about the estate planning... he passed along the business to his three kids through a lot of early estate planning.”

Key moments

• Refining capacity has declined for 15+ years partly because refineries are being converted to lower-output renewable diesel plants — "reduced 90% of the production... that won't be rebuilt or replaced."
• Vance's Stewart Brand/BP story — BP rebranded away from "petroleum" and bought unprofitable wind farms because "the government has... is always willing to pay, write the check."
• Strategic Petroleum Reserve tap explained bluntly as electoral politics, not energy strategy.
• Negative oil prices in April 2020 — refiners and pipelines couldn't "flip a switch," so producers paid buyers to take crude.
• "Widow maker"/"suicide squeeze" spread trade between gasoline and diesel futures explained.
• Milkshake theory of dollar dominance — raising US interest rates pulls global capital home, propping up the dollar (and Vance's related oil-denominated-in-dollars/petrodollar explainer).
• Five-generation succession history of PSA — buyouts of siblings/uncles via estate planning, family limited partnerships giving non-business heirs equal-value non-business assets.
• Farm-industry parallel — the risk-taking operator, not absent heirs, should be rewarded in succession decisions.
• "Eyes are always on you" — how the next generation earns credibility inside a family business through visible, hands-on work (rebuilding jet-fuel testing protocols).

Notable quotes

“Crude oil went negative for the first time ever... down to a negative $34 a barrel.”

“It's elections. I mean, it's plain and simple.”

“My grandfather was always very much about the estate planning... he passed along the business through a lot of early estate planning.”

“Everybody's watching... there's a tremendous amount of scrutiny.”