5 ms·

Much of that domestic consumption is used in the process of extraction and refining, so actually isn't on the market as such. My understanding is that GP is cor

Much of that domestic consumption is used in the process of extraction and refining, so actually isn't on the market as such. My understanding is that GP is correct to say that the 20% figure rather understates the potential impact of a prolonged shutdown of the Strait. Pipeline capacity to the west is pretty limited. The connection via Syria is affected by the war aftermath, the Iraq/Turkey route is already at capacity, and the Saudi connection to the Red Sea is vulnerable to resumption of Houthi attacks. There's some connectivity via Oman, but that's largely natural gas rather than oil.

_heimdall 8mo ago
The type of oil produced also varies by region. Russia mostly ships heavy and sour crude oil while much of the middle east produces light, sweet crude. I don't know enough about European refineries specifically, but even if you could entirely redirect oil out of the middle east (it wouldn't be that simple), regional refiners may not be setup to process that different type of crude at a similar capacity.
- roryirvine 8mo ago
  Yeah, most refineries in western europe were set up for Brent crude from the North Sea, which is actually somewhat lighter and sweeter than Arab Light or Dubai crude. Russia does produce some lighter oil, but the usual Ural / Volga-sourced stuff couldn't be substituted without additional hydrotreatment.
AnthonyMouse 8mo ago
> Much of that domestic consumption is used in the process of extraction and refining, so actually isn't on the market as such. My understanding is that GP is correct to say that the 20% figure rather understates the potential impact of a prolonged shutdown of the Strait. The original claim was that all of the "domestic" oil was off the market. It's also not clear why oil used for oil production requires special treatment. To the extent that it's used for transportation it's susceptible to substitution with electric vehicles like anything else. To the extent that it's used for heat in refineries it could likewise be substituted with non-petroleum heat sources when oil is at a premium. More than that, many of those costs also apply to unrefined oil currently going through the Strait, so that proportion is on both sides of the ledger anyway. And to the extent that it can't be substituted, it's just a fairly arbitrary subclass of the broader category of consumers with inelastic demand, which implies that oil-producing countries might have a higher percentage of inelastic demand (even then assuming that oil production has more inelastic demand for oil than other things), but by significantly less than the proportion used in oil production, because it's just being averaged in to the broader category of all short-term inelastic global oil consumption. > Pipeline capacity to the west is pretty limited. The connection via Syria is affected by the war aftermath, the Iraq/Turkey route is already at capacity, and the Saudi connection to the Red Sea is vulnerable to resumption of Houthi attacks. There's some connectivity via Oman, but that's largely natural gas rather than oil. Pipelines are the most efficient way to transport it, not the only way. You import some tanker trucks and drivers and you can transport as much as you want, but it'll cost more. We're not even talking about thousands of miles, bypassing the Strait of Hormuz via a land path in the UAE is about an hour. And the Houthis are a problem if you're trying to get to Asia, not Europe. The Saudi pipeline goes to the Red Sea well north of Yemen and from there has a sea path to Europe via the Suez canal. On top of that, the Iranian military is already in a full conflict with the US. Whereas if the US parks an aircraft carrier with satellite support in the narrow part of the Red Sea ready to rain down fire on any Houthis that attack an oil tanker, but is otherwise going to leave them alone, how many do they have who are inclined to choose certain death to attack a ship most likely destined for Asia out of "solidarity"?
- _heimdall 8mo ago
  What experience do you have working directly in the oil industry? You're making very specific and bold claims related to the fungibility of oil, oil infrastructure, transpiration, etc and they simply don't line up with my experience. You won't replace oil pipelines or sea-based transportation by importing tanker trucks, its completely inpheasible on any reasonable timescale. Similarly, you will never replace petroleum-based transportation at scale in any near term future with electric or other non-petroleum sources. The power to weight ratio of oil, ease of transport of liquid oil, and scale of petroleum a powered vehicles is simply unmatched. Go ahead and do the math on what it takes to replace a diesel oil tanker at sea to cross from Iran to China or the US to Europe, and don't forget to consider all the materials required to make battery storage equipment for such a trip. It doesn't work today and we aren't near a solution today that can replace oil with a viable, sustainable alternative.
  - AnthonyMouse 8mo ago
    > You're making very specific and bold claims related to the fungibility of oil, oil infrastructure, transpiration, etc and they simply don't line up with my experience. I'm not arguing that they're always and instantaneously fungible, my point is that the aren't any less fungible than they are when the thing you're transporting isn't oil, so it doesn't make much sense to make a special carve out for the cases where the load is also the fuel. > You won't replace oil pipelines or sea-based transportation by importing tanker trucks, its completely inpheasible on any reasonable timescale. An oil tanker ship holds around 55 million gallons. An oil tanker truck holds around 10,000. Truckloads per ship is therefore around 5500. If the round trip is around two hours, and assuming that pumping is a relatively small proportion of the time (you have high capacity pumps at both ends or bring a few percent more trucks so drivers can switch trucks instead of waiting or both), you'd need around 500 trucks and, assuming 8 hour shifts, 1500 drivers per oil tanker ship per day. In normal times something like 60 oil tanker ships go through the Straight per day, so if you had to do all of them it would be on the order of 30,000 trucks and 90,000 drivers. That's not a small number, but at the scale of global trade, it doesn't seem like an impossible number. And you wouldn't actually be doing all of them this way, you would be diverting as many as you can to other paths and only doing this where it's the least bad alternative. 10 ships a day would be ~5000 trucks. Is it infeasible to find 5000 tanker trucks in the world? > Similarly, you will never replace petroleum-based transportation at scale in any near term future with electric or other non-petroleum sources. You're not trying to replace all of it instantaneously, you're trying to substitute at the margins. Does it make sense to try to use electric trucks if you were doing the above, trying to run the trucks continuously in a place that presumably doesn't have adequate charging infrastructure? Almost certainly not. Does it make sense to convert fleets of millions of delivery trucks to electric or plug-in hybrids, when they're doing continuous stop and go that benefits from regenerative braking? Absolutely it does. Does it make sense to add a battery car to already-hybrid diesel electric freight trains so they can do regenerative braking on down grades, and add a pantograph and some overhead lines to the up grades so they can run electric there instead of burning diesel? Also yes. > The power to weight ratio of oil, ease of transport of liquid oil, and scale of petroleum a powered vehicles is simply unmatched. Go ahead and do the math on what it takes to replace a diesel oil tanker at sea to cross from Iran to China or the US to Europe, and don't forget to consider all the materials required to make battery storage equipment for such a trip. This seems like a pretty attractive option for large ships if you're worried about power to weight ratio: https://interestingengineering.com/energy/hd-hyundai-abs-plan-nuclear-powered-cargo-ship https://interestingengineering.com/energy/hd-hyundai-abs-pla...

_heimdall 8mo ago

The type of oil produced also varies by region. Russia mostly ships heavy and sour crude oil while much of the middle east produces light, sweet crude. I don't know enough about European refineries specifically, but even if you could entirely redirect oil out of the middle east (it wouldn't be that simple), regional refiners may not be setup to process that different type of crude at a similar capacity.

roryirvine 8mo ago
Yeah, most refineries in western europe were set up for Brent crude from the North Sea, which is actually somewhat lighter and sweeter than Arab Light or Dubai crude. Russia does produce some lighter oil, but the usual Ural / Volga-sourced stuff couldn't be substituted without additional hydrotreatment.

AnthonyMouse 8mo ago

> Much of that domestic consumption is used in the process of extraction and refining, so actually isn't on the market as such. My understanding is that GP is correct to say that the 20% figure rather understates the potential impact of a prolonged shutdown of the Strait. The original claim was that all of the "domestic" oil was off the market. It's also not clear why oil used for oil production requires special treatment. To the extent that it's used for transportation it's susceptible to substitution with electric vehicles like anything else. To the extent that it's used for heat in refineries it could likewise be substituted with non-petroleum heat sources when oil is at a premium. More than that, many of those costs also apply to unrefined oil currently going through the Strait, so that proportion is on both sides of the ledger anyway. And to the extent that it can't be substituted, it's just a fairly arbitrary subclass of the broader category of consumers with inelastic demand, which implies that oil-producing countries might have a higher percentage of inelastic demand (even then assuming that oil production has more inelastic demand for oil than other things), but by significantly less than the proportion used in oil production, because it's just being averaged in to the broader category of all short-term inelastic global oil consumption. > Pipeline capacity to the west is pretty limited. The connection via Syria is affected by the war aftermath, the Iraq/Turkey route is already at capacity, and the Saudi connection to the Red Sea is vulnerable to resumption of Houthi attacks. There's some connectivity via Oman, but that's largely natural gas rather than oil. Pipelines are the most efficient way to transport it, not the only way. You import some tanker trucks and drivers and you can transport as much as you want, but it'll cost more. We're not even talking about thousands of miles, bypassing the Strait of Hormuz via a land path in the UAE is about an hour. And the Houthis are a problem if you're trying to get to Asia, not Europe. The Saudi pipeline goes to the Red Sea well north of Yemen and from there has a sea path to Europe via the Suez canal. On top of that, the Iranian military is already in a full conflict with the US. Whereas if the US parks an aircraft carrier with satellite support in the narrow part of the Red Sea ready to rain down fire on any Houthis that attack an oil tanker, but is otherwise going to leave them alone, how many do they have who are inclined to choose certain death to attack a ship most likely destined for Asia out of "solidarity"?

_heimdall 8mo ago
What experience do you have working directly in the oil industry? You're making very specific and bold claims related to the fungibility of oil, oil infrastructure, transpiration, etc and they simply don't line up with my experience. You won't replace oil pipelines or sea-based transportation by importing tanker trucks, its completely inpheasible on any reasonable timescale. Similarly, you will never replace petroleum-based transportation at scale in any near term future with electric or other non-petroleum sources. The power to weight ratio of oil, ease of transport of liquid oil, and scale of petroleum a powered vehicles is simply unmatched. Go ahead and do the math on what it takes to replace a diesel oil tanker at sea to cross from Iran to China or the US to Europe, and don't forget to consider all the materials required to make battery storage equipment for such a trip. It doesn't work today and we aren't near a solution today that can replace oil with a viable, sustainable alternative.
- AnthonyMouse 8mo ago
  > You're making very specific and bold claims related to the fungibility of oil, oil infrastructure, transpiration, etc and they simply don't line up with my experience. I'm not arguing that they're always and instantaneously fungible, my point is that the aren't any less fungible than they are when the thing you're transporting isn't oil, so it doesn't make much sense to make a special carve out for the cases where the load is also the fuel. > You won't replace oil pipelines or sea-based transportation by importing tanker trucks, its completely inpheasible on any reasonable timescale. An oil tanker ship holds around 55 million gallons. An oil tanker truck holds around 10,000. Truckloads per ship is therefore around 5500. If the round trip is around two hours, and assuming that pumping is a relatively small proportion of the time (you have high capacity pumps at both ends or bring a few percent more trucks so drivers can switch trucks instead of waiting or both), you'd need around 500 trucks and, assuming 8 hour shifts, 1500 drivers per oil tanker ship per day. In normal times something like 60 oil tanker ships go through the Straight per day, so if you had to do all of them it would be on the order of 30,000 trucks and 90,000 drivers. That's not a small number, but at the scale of global trade, it doesn't seem like an impossible number. And you wouldn't actually be doing all of them this way, you would be diverting as many as you can to other paths and only doing this where it's the least bad alternative. 10 ships a day would be ~5000 trucks. Is it infeasible to find 5000 tanker trucks in the world? > Similarly, you will never replace petroleum-based transportation at scale in any near term future with electric or other non-petroleum sources. You're not trying to replace all of it instantaneously, you're trying to substitute at the margins. Does it make sense to try to use electric trucks if you were doing the above, trying to run the trucks continuously in a place that presumably doesn't have adequate charging infrastructure? Almost certainly not. Does it make sense to convert fleets of millions of delivery trucks to electric or plug-in hybrids, when they're doing continuous stop and go that benefits from regenerative braking? Absolutely it does. Does it make sense to add a battery car to already-hybrid diesel electric freight trains so they can do regenerative braking on down grades, and add a pantograph and some overhead lines to the up grades so they can run electric there instead of burning diesel? Also yes. > The power to weight ratio of oil, ease of transport of liquid oil, and scale of petroleum a powered vehicles is simply unmatched. Go ahead and do the math on what it takes to replace a diesel oil tanker at sea to cross from Iran to China or the US to Europe, and don't forget to consider all the materials required to make battery storage equipment for such a trip. This seems like a pretty attractive option for large ships if you're worried about power to weight ratio: https://interestingengineering.com/energy/hd-hyundai-abs-plan-nuclear-powered-cargo-ship https://interestingengineering.com/energy/hd-hyundai-abs-pla...