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I was referring to my statement earlier in this thread: > And they could be using 1960's technology to refine their oil into higher value products but they sim

I was referring to my statement earlier in this thread: > And they could be using 1960's technology to refine their oil into higher value products but they simply aren't, for reasons I don't understand. "Refine" was used loosely, but the bulk of the plastics market are still relatively simple products that don't necessarily require extremely high technology to produce. It's still a cutthroat commodities business, but producing a little plastic has the potential to add a lot of dollars. You can see this happen in Saudi Arabia over the past decade. They worked with Dow Chemical to produce the "Sadara" plant - a very large refinery and chemical plant. Crude oil made up over 80% of Saudi's exports from 2010-2014. The first phase of Sadara began selling product in 2015, and the final major piece (of 26) was commissioned in 2017. When Sadara opened its first phase, crude oil dropped from ~80% of export dollars in 2014 to just 55% in 2015. So yeah, opening a chemical plant can massively change your export profile. Now, this data includes a huge drop in oil price after 2014 so it's not entirely fair. But is is reasonably fair vecause it wasn't just oil prices that dropped - chemicals+plastics dropped up to 50% as well. Their $ value in exports stayed constant despite the price drop, indicating a large surge in export volume. And this is largely driven by the construction of a single integrated refining facility.

akiselev 6y ago
> "Refine" was used loosely, but the bulk of the plastics market are still relatively simple products that don't necessarily require extremely high technology to produce. It's still a cutthroat commodities business, but producing a little plastic has the potential to add a lot of dollars. Injection molding and most other plastics manufacturing methods are much more sensitive processes than combustion which means that the commodity is much less fungible and much more logistics sensitive than fossil fuels. It's pretty common for a manufacturer to pay 2-10x market price for plastic pellets because of repeatability. Few would risk the repercussions to buy unrefined crude from Iran at a discount and there's certainly no one who;'s going to do it at $200 a barrel.

akiselev 6y ago

> "Refine" was used loosely, but the bulk of the plastics market are still relatively simple products that don't necessarily require extremely high technology to produce. It's still a cutthroat commodities business, but producing a little plastic has the potential to add a lot of dollars. Injection molding and most other plastics manufacturing methods are much more sensitive processes than combustion which means that the commodity is much less fungible and much more logistics sensitive than fossil fuels. It's pretty common for a manufacturer to pay 2-10x market price for plastic pellets because of repeatability. Few would risk the repercussions to buy unrefined crude from Iran at a discount and there's certainly no one who;'s going to do it at $200 a barrel.