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yet somehow we leave them alone to openly torture, abuse and murder their citizens Huh, like maybe "a sizeable chunk of the world's oil and gas are sourced fro

yet somehow we leave them alone to openly torture, abuse and murder their citizens Huh, like maybe "a sizeable chunk of the world's oil and gas are sourced from "non-democratic" countries in the Middle East" is the problem, and the reason those countries get a pass? So like we shouldn't be outsourcing manufacturing, we shouldn't be outsourcing energy production to terrible countries.

Retric 4y ago
If by we you mean the US then we don’t. The US has effectively zero direct dependence on middle eastern oil due to domestic production and transportation costs. Canada is much closer and has a lot of oil. Where it matters is they can impact the global prices and thus what people pay at the pump. Though the actual profits from such spikes in American gas prices end up going to suppliers in America or Canada.
- teh_klev 4y ago
  > The US has effectively zero direct dependence on middle eastern oil due to domestic production and transportation costs For now and whilst those extraction costs are cheaper domestically. The US needs the Saudis as a backstop and for infill of the types of crude oils the North American continent doesn't have access to or is in limited supply. They're also a handy client state to do the US's dirty work in the Middle East, see Yemen for example. The US also needs the Saudi's and their non-democratic allies to keep buying weapon systems to prop up Lockheed, Boeing et al. You need to look at the bigger picture.
  - tw1984 4y ago
    > You need to look at the bigger picture. The big picture is that the US needs middle east countries to price their oil in USD. Everything else is just a bonus.
    - vkou 4y ago
      The world's USD-settled oil trade is a tiny fraction of overall USD-settled trade. The petrodollar is an interesting theory, but it doesn't really hold up to very much scrutiny.
      - somenameforme 4y ago
        Imagine you created a new currency in the US: FidoBucks. Not even a crypto but a regular currency you can print at your whim. Obviously nobody's really going to want your currency and it will have zero value. But now imagine, after some backdoor deals, you make it such that FidoBucks are literally the only currency accepted at gas stations. And not only that both those gas stations agree to spend any extra profits they make buying in FidoBuck denominated treasuries. Now not only are people going to want your currency, but they will literally need it. And since FidoBucks are now directly tied to access of a critical commodity, it will have also have a guaranteed minimum "value" that's tied to the cost of oil. So people can feel pretty comfortable holding and trading Fidobucks. In fact the new stability of your currency means you'd likely see people starting to trade it for far more than oil, to the point that gas becomes just a fraction of its trade. This is essentially what the petrodollar did, but it of course started from a far higher point than zero of course. Once we ended the fixed convertibility of the USD to gold in 1971 [1], demand in the dollar started rapidly declining, and its relative value began decreasing. After the petrodollar this all reversed, hard. It's to assign a specific value to any of these changes, because it's all dynamic - just like in our simplified FidoBucks example so much would depend on the dynamic scarcity of gas, how many FidoBucks you print, the total value of outside trade, and a million other variables. What is safe to say is that it dramatically strengthened the position of the currency, and is a large reason that until extremely recently, if China and Russia were trading - they'd settle that trade in USD. Now they're trying to create the next FidoBuck backed by a combination of land, gold, and other finite resources. [1] - https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/
        Retric 4y ago
        Total worldwide production of oil is only ~90 million barrels/day and middle eastern production is a fraction of that. That’s not very significant compared to the total value of all USD in circulation. All FidoBucks in circulation might only be worth ~50 Billion in your example and depending on the velocity of money could actually be significantly less. People might start using it for other things, but it’s just as likely to be an odd quark of the oil market. What actually props up the USD is the US taxes being paid in USD. Even transactions like selling burgers for Bitcoins suddenly force someone to not only get dollars to pay their taxes on that sale but set it aside for significant periods. This is the basic mechanism which forces all fiat money to have value, which then causes it to be used for loans and whatnot which further increases value.
  - seanmcdirmid 4y ago
    The USA needs the Saudis to supply Europe and Asia, otherwise demand goes up and pumps up prices in the states. But as we and our allies move to EVs, we really won’t need as much oil anymore, so the end of the dependence is near.
  - BurningFrog 4y ago
    US has no real interests in Yemen. That's a local Saudi/Iranian conflict.
- WillPostForFood 4y ago
  We get ~12% of our oil from the middle east which is consequential but not what I meant. You'll note that after Biden called Saudi Arabia a Pariah state, he was forced to reverse course and head over, hat in hand, and beg for more production. Not because of the 12% (or 10% or 8%), we directly consume, but because of the impact on inflation and the world economy. So yes, we are beholden to middle east oil, not because we directly consume it, but because of the impact on energy prices and inflation. If we were maximizing our own energy production, not just for domestic consumption but for export, we could lessen that impact and the influence they have.
  - Retric 4y ago
    It’s 2.6% not 12%. https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-and-exports.php https://www.eia.gov/energyexplained/oil-and-petroleum-produc... “About 9% of U.S. total petroleum imports and 9% of U.S. crude oil imports were from Persian Gulf countries in 2021.” However the US produces 20 Billion barrels of oil vs 8 Billion barrels of imports. So that 9% is really 9% * (8B / (8B + 20B)) = 2.6% of the US’s total oil supply. Further that 8 Billion barrels of imports almost exactly equals our 8 Billion barrels of exports. There are many reasons to imports and export oil over the course of a year for example seasonal demand varies, but if it goes to 0 we can also stop our exports.
    - Retric 4y ago
      “About 8% of U.S. total petroleum imports and 9% of U.S. crude oil imports were from Persian Gulf countries in 2021.” Accidentally mangled the quote while cutting and pasting.

Retric 4y ago

If by we you mean the US then we don’t. The US has effectively zero direct dependence on middle eastern oil due to domestic production and transportation costs. Canada is much closer and has a lot of oil. Where it matters is they can impact the global prices and thus what people pay at the pump. Though the actual profits from such spikes in American gas prices end up going to suppliers in America or Canada.

teh_klev 4y ago
> The US has effectively zero direct dependence on middle eastern oil due to domestic production and transportation costs For now and whilst those extraction costs are cheaper domestically. The US needs the Saudis as a backstop and for infill of the types of crude oils the North American continent doesn't have access to or is in limited supply. They're also a handy client state to do the US's dirty work in the Middle East, see Yemen for example. The US also needs the Saudi's and their non-democratic allies to keep buying weapon systems to prop up Lockheed, Boeing et al. You need to look at the bigger picture.
- tw1984 4y ago
  > You need to look at the bigger picture. The big picture is that the US needs middle east countries to price their oil in USD. Everything else is just a bonus.
  - vkou 4y ago
    The world's USD-settled oil trade is a tiny fraction of overall USD-settled trade. The petrodollar is an interesting theory, but it doesn't really hold up to very much scrutiny.
    - somenameforme 4y ago
      Imagine you created a new currency in the US: FidoBucks. Not even a crypto but a regular currency you can print at your whim. Obviously nobody's really going to want your currency and it will have zero value. But now imagine, after some backdoor deals, you make it such that FidoBucks are literally the only currency accepted at gas stations. And not only that both those gas stations agree to spend any extra profits they make buying in FidoBuck denominated treasuries. Now not only are people going to want your currency, but they will literally need it. And since FidoBucks are now directly tied to access of a critical commodity, it will have also have a guaranteed minimum "value" that's tied to the cost of oil. So people can feel pretty comfortable holding and trading Fidobucks. In fact the new stability of your currency means you'd likely see people starting to trade it for far more than oil, to the point that gas becomes just a fraction of its trade. This is essentially what the petrodollar did, but it of course started from a far higher point than zero of course. Once we ended the fixed convertibility of the USD to gold in 1971 [1], demand in the dollar started rapidly declining, and its relative value began decreasing. After the petrodollar this all reversed, hard. It's to assign a specific value to any of these changes, because it's all dynamic - just like in our simplified FidoBucks example so much would depend on the dynamic scarcity of gas, how many FidoBucks you print, the total value of outside trade, and a million other variables. What is safe to say is that it dramatically strengthened the position of the currency, and is a large reason that until extremely recently, if China and Russia were trading - they'd settle that trade in USD. Now they're trying to create the next FidoBuck backed by a combination of land, gold, and other finite resources. [1] - https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/
      - Retric 4y ago
        Total worldwide production of oil is only ~90 million barrels/day and middle eastern production is a fraction of that. That’s not very significant compared to the total value of all USD in circulation. All FidoBucks in circulation might only be worth ~50 Billion in your example and depending on the velocity of money could actually be significantly less. People might start using it for other things, but it’s just as likely to be an odd quark of the oil market. What actually props up the USD is the US taxes being paid in USD. Even transactions like selling burgers for Bitcoins suddenly force someone to not only get dollars to pay their taxes on that sale but set it aside for significant periods. This is the basic mechanism which forces all fiat money to have value, which then causes it to be used for loans and whatnot which further increases value.
- seanmcdirmid 4y ago
  The USA needs the Saudis to supply Europe and Asia, otherwise demand goes up and pumps up prices in the states. But as we and our allies move to EVs, we really won’t need as much oil anymore, so the end of the dependence is near.
- BurningFrog 4y ago
  US has no real interests in Yemen. That's a local Saudi/Iranian conflict.
WillPostForFood 4y ago
We get ~12% of our oil from the middle east which is consequential but not what I meant. You'll note that after Biden called Saudi Arabia a Pariah state, he was forced to reverse course and head over, hat in hand, and beg for more production. Not because of the 12% (or 10% or 8%), we directly consume, but because of the impact on inflation and the world economy. So yes, we are beholden to middle east oil, not because we directly consume it, but because of the impact on energy prices and inflation. If we were maximizing our own energy production, not just for domestic consumption but for export, we could lessen that impact and the influence they have.
- Retric 4y ago
  It’s 2.6% not 12%. https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-and-exports.php https://www.eia.gov/energyexplained/oil-and-petroleum-produc... “About 9% of U.S. total petroleum imports and 9% of U.S. crude oil imports were from Persian Gulf countries in 2021.” However the US produces 20 Billion barrels of oil vs 8 Billion barrels of imports. So that 9% is really 9% * (8B / (8B + 20B)) = 2.6% of the US’s total oil supply. Further that 8 Billion barrels of imports almost exactly equals our 8 Billion barrels of exports. There are many reasons to imports and export oil over the course of a year for example seasonal demand varies, but if it goes to 0 we can also stop our exports.
  - Retric 4y ago
    “About 8% of U.S. total petroleum imports and 9% of U.S. crude oil imports were from Persian Gulf countries in 2021.” Accidentally mangled the quote while cutting and pasting.