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Oil is a fungible commodity. Selling it to a different country at the same price would just mean China becomes the next buyer and gets it from the next source
by nl 4y ago
Oil is a fungible commodity.
Selling it to a different country at the same price would just mean China becomes the next buyer and gets it from the next source at whatever the next price is. And because the other country didn't buy it that price would be cheaper.
The whole point is to lower prices, and prices are set globally.
- PaulHoule 4y agoSomewhat. Oil refineries are build to use a certain kind of crude, if you got crude from somewhere else you might have problems. When there was a minor supply shock in the early 2000's some refineries in the US South got the wrong stuff and produced batches of gas that could dissolve the plastic float that indicates your fuel level and people ran out of gas because the fuel gauge would always read full. (I went through a phase of filling the gas every time I went for a drive and it freaked out my wife and my son because they knew that story and thought the gas gauge had failed.)
- landemva 4y agoPhysical items have geographic price differences due in part to transportation costs. If the point is to lower worldwide oil prices, the USA government should stockpile oil closer to China. I'm not recommending USA operate a CN Military Oil Reserve.
- ozzydave 4y agoOil transport is so cheap relative to the product that it’s not really a factor: https://steno.ai/planet-money/breaking-down-the-price-of-gasoline https://steno.ai/planet-money/breaking-down-the-price-of-gas...