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If oil demand decreases enough, it should get more expensive. It seems counterintuitive, but so much of the supply chain depends on moving large amounts of oil,
by labster 4y ago
If oil demand decreases enough, it should get more expensive. It seems counterintuitive, but so much of the supply chain depends on moving large amounts of oil, refineries selling different grades of molecules to different customers, and oil companies not having to pay to shut down old wells. Heh, just kidding on the last one, oil firms never pay to shut down wells, they just sell to small firms which can go bankrupt instead.
But the big complicated supply chain for petrochemicals can break at lower scale. Compare how freaked out the markets have gotten at Meta and Netflix for losing users while still being profitable, and you can see how financing could dry up before the wells do.
I doubt it’s enough to phase out plastics, but it might make alternatives more economically viable.
- onlyrealcuzzo 4y agoNone of this applies to KSA's oil - which is more than enough oil to meet plastic consumption for 100 years. At $20 per barrel - the economics alone will be tough to beat with some other material.
- labster 4y agoWow, I didn’t know that refining, shipping, and access to global capital didn’t apply to KSA. Such a magical country. They’re going to need that magic when the primary export collapses — or if it doesn’t, wet bulb temperatures in the Gulf make it literally unlivable. The $20 a barrel will be even harder to sustain in a protracted civil war, which is where they are headed if they don’t diversify enough.
- onlyrealcuzzo 4y ago> Wow, I didn’t know that refining, shipping, and access to global capital didn’t apply to KSA. Such a magical country. KSA refines all its own oil. KSA doesn't need capital. It's a money printing machine - even at $30 per barrel. Shipping will have some impact. ~40% of global shipping cargo is fossil fuels. However, my guess is, fossil fuel shipping would get even cheaper, not more expensive.