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The price of 1 barrel of West Texas Intermediate to be delivered in May was -$37.63 | Source: Business Insider

Like everything else in the economy, commodity prices are determined by the balance of supply and demand, and oil happens to be enduring the perfect storm: demand has utterly evaporated due to the economic shutdown from the coronavirus, but supply remains elevated, particularly as Russia and major OPEC countries like Saudi Arabia are reluctant to give up market share and haven't sufficiently cut production. This has left the world awash in unwanted oil, and storage facilities have quickly reached capacity. As a result, buyers who had purchased futures contracts** for delivery of oil in the month of May suddenly found themselves no longer needing the oil and with no place to put it; hence, these buyers were willing to pay somebody, literally anybody, to take the unwanted oil instead and get them off the hook for it

**Note: A futures contract is a legally binding agreement to buy or sell a commodity or security at a predetermined price at a specified time in the future. If I've agreed to buy 100 barrels of oil on May 1st, I can't renege

My buddies in finance have all been joking, "yo man, I'm down to make some quick money, how many barrels of crude do you think I can stash in my apartment?" But while lower crude oil prices on commodity exchanges do translate to cheaper prices at the pump, don't show up at your nearest Shell asking for money. The futures contract for May delivery has already rebounded to positive territory, and for June and the months afterward, prices have remained reasonably stable. But it got me thinking, RP-1 is a petroleum-derived product, and it's one of the most reliable and widely-used rocket fuels out there. Could lower oil prices bring down launch costs, even temporarily?

As someone who studied finance at the University of Texas, I inevitably picked up a thing or two about energy finance and fossil fuel production, so I find it worthwhile to give some background on RP-1 and its chemical makeup. When crude oil is extracted, it needs to be sent to a refinery and separated by density into various refined products. RP-1 is a rather niche product whose specifications were first set forth in 1957, but it's basically a super-refined kerosene (think jet fuel) designed to avoid excessive polymerization or coking that can clog a rocket engine. For my chemistry buffs out there, John D. Clark's book Ignition (in my opinion the best work on rocket fuel out there) describes RP-1 as a kerosene in the C12 region with a hydrogen/carbon ratio between 1.95 and 2.00, containing ~40% branched paraffins, ~55% naphthenes, <5% aromatics, and <1% olefins

So let's do some back of the envelope math to see how much a hypothetical reduction in RP-1 costs would save on a typical Soyuz launch:

The 4 side boosters, the first stage, and the second stage of the current Soyuz rocket consume a total of about 600,000 pounds of propellant (source), but this is both RP-1 and liquid oxygen. The optimal mixture ratio of LOx to RP-1 is about 2.5:1, meaning about 170,000 pounds of that is RP-1. Given RP-1 has a density of 6.84 lbs/gal (0.82 g/mL), this tells us the Soyuz uses about 25,000 gallons of RP-1

According to Statista, the average price for a gallon of jet fuel was \$2/gallon from 2004-2019. Because RP-1 is a much more heavily refined specialty product, let's assume on average RP-1 costs twice as much, about \$4/gallon. If we shave off 25% of that, we save \$1 per gallon, coming out to a measly \$25,000 in savings. Russia doesn't publish exact numbers, but it's safe to say the Soyuz probably costs well over \$100 million per launch. Clearly cheap oil isn't going to save us much money getting to space - better find more storage space for your crude!!