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What the price of oil does and what you think it will do are often two completely separate things. One quick point-- Argentina might have more reserves than Sa

What the price of oil does and what you think it will do are often two completely separate things. One quick point-- Argentina might have more reserves than Saudi, but how much does it cost to pull it out of the ground? 60 years ago Saudi just stuck a straw in the ground to pull out its resources, but now most extractions require the equivalent of a small space station just to get started. Brazil is facing the same issue with its deepwater reserves, and I'd expect Argentina to have similar obstacles.

bryanlarsen 16y ago
"What the price of oil does and what you think it will do are often two completely separate things." Very true. A true Taleb style black swan investment would be to bet on both $30 oil and on $300 oil, and bet against $100 oil. Except that there are a lot of people betting on $300 oil, making that bet exceptionally expensive, so Taleb probably wouldn't bet on it. "how much does it cost to pull it out of the ground?" A lot less than $90, the current price of oil. In Argentina's case much of the cost is in refinement, since their oil is very heavy. If my memory serves me correctly, Argentinian oil becomes profitable at about $30 a barrel. Brazilian deepwater reserves do require the equivalent of space stations to extract, but hundreds of billions of barrels of oil is a pretty nice incentive to make that investment...