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> All that's happened is some oil companies are making less money per barrel because of transport expenses. This reduces fuel supply, shifting the supply curve
by graeme 6y ago
> All that's happened is some oil companies are making less money per barrel because of transport expenses.
This reduces fuel supply, shifting the supply curve left. Ceteris paribus, this increases the world price for fuel.
- beloch 6y agoThe slight change in world oil prices is entirely due to the cost of burning fuel to transport oil around a continent. There is literally no upside here.
- graeme 6y agoFuel costs are well under 100% of transport costs. Well, well under. This says 20-40%, and ship costs are not the only costs associated with transport, so it’s an even smaller fraction of total cost. https://www.morethanshipping.com/imo-2020-and-oil-prices-in-shipping/ https://www.morethanshipping.com/imo-2020-and-oil-prices-in-... Moreover, the total energy being transported is surely much higher than the oil burned. That’s the key feature of oil....it is energy dense!