5 ms·
How much oil-market buffer is left?
- CrzyLngPwd 19d agoIt's like a catalogue of US misadventures and ego.
- fortzi 17d agoCountries don’t have egos, they have interests. In this case, deglobalization (to an extent) and China
- CrzyLngPwd 16d agoTrump's giant ego.
- fortzi 15d agoNo one can seriously claim he doesn’t have a giant ego, but despite common belief, the president can’t and doesn’t act alone.
- anovikov 19d agoBut for the US, there's no question like that. It produces a lot lot more than it consumes anyway. There can't be a shortage. Yes US produces mostly light crude and production of refined products requires also inputs of heavy one, but it's not produced in the Middle East anyway, so current situation can't impact that, either.
- soperj 19d agoWhy would any producer in the US sell it locally if they could get more by shipping it?
- Aspos 19d agoThe real question then is how quickly export ban can be implemented?
- 361994752 19d agoSince oil companies will make good money from the price hike and exports, I guess they’ll lobby against an export ban?
- daedrdev 19d agoOil is not a single good. Different types of crude produce different products at various grades hence why diesel is so expensive in the US compared to something like natural gas
- larkost 19d agoWhy do you think Republicans would institute an export ban? Trump has been touting every export deal he can (especially promises to purchase petroleum), he has even been measuring import/export levels as if foreign countries are cheating the U.S. if they export more to the U.S. than they import from it. I am not confident that the Democrats would even implement such a ban, as they get pretty big campaign donations from the oil industry as well.
- XorNot 19d agoIt also wouldn't work. The US has refineries which can only run on various foreign import grades of oil. The US produces oil which goes to foreign refineries for the same reason. The effect of "banning exports" is non obvious. Conversely not starting a war with Iran had some really obvious benefits that every previous administration recognized.
- soperj 19d agoAbout as quickly as the Canadian Oil patch would be flooded with money. All that would do is push oil investments out of the country, and your surplus would become a deficit in the drop of a hat.
- Retric 19d agoGlobal trade means domestic prices move even when you’re a next exporter of a commodity.
- Boxxed 19d ago> It produces a lot lot more than it consumes anyway. There can't be a shortage. Clearly you haven't been paying attention to oil and gas prices
- ncallaway 19d ago> But for the US, there's no question like that. It produces a lot lot more than it consumes anyway. There can't be a shortage. It's a global commodity. The reason there likely won't be a shortage in the U.S. has little to do with our production volumes, and has more to do with the fact that we're rich enough to be able to afford the higher prices when many other countries will have to forgeo using oil. But if we weren't a rich country and we couldn't afford to pay a higher price for oil than many other nations on earth, we would produce and export oil to people that can pay more. Ireland during the famine produced enough food to feed every person. But much of it was exported to other places, that could afford to pay a higher dollar amount to survive.
- oblio 19d agoYou're 90% of the way there. The US is also sovereign and if things would become really bad the government would just ban exports. Ireland wasn't sovereign and it turns out, as much as other countries act brotherly (not that the UK really did), nobody really cares about you like you care.
- WarmWash 19d agoBanning exports would be legitimately catastrophic geopolitically. Tariffs are mostly just politics and pretty heavily partisan. Banning oil exports would be objectively evil.
- AgentOrange1234 19d agoI think banning oil exports would never happen since oil shareholders would scream, but why would it be evil?
- orwin 19d agoSome countries rely on oil imports to produce agricultural products, and suddenly cutting them off the global market would kill hundreds of millions from hunger over the next year. Look at what happened in Cuba. Without china giving them old solar panels and used batteries, they would have revolted already. They still have a huge food insecurity issue for next year, especially if the huricane season gets bad.
- laweijfmvo 19d agoHow about the “deal” with Venezuela? When will that impact anything, if ever?
- AnimalMuppet 19d agoI think I heard 3 years at a minimum (don't take that number as gospel, but the order of magnitude is roughly right as a best case). The issue is that Venezuela's oil infrastructure is basically trashed by decades of neglect and mismanagement. It's going to have to be rebuilt, which is billions of dollars and several years. That's the best case. Worst case (for Venezuelan oil) is that the Republicans lose the House and Senate in November, then the new Congress starts investigating the Venezuela deal, and court cases start flying, and oil companies back out, and the date for the impact of the deal becomes "never".
- orwin 19d agoThe issue is that they never expended the infrastructure, never exploited new fields, their old oil field started giving less, so they pumped more water in, which probably lowered the quality of oil, and made it harder on the refineries. Venezuela oil also need a lot of refinement in any case, and this is where the US made a mistake, because they could just have insisted on refining Venezualan oil rather than directly taking a cut, which will be seen worse by the locals. Basically help more venezualan crude oil to get out of the field than their refinment capacity can afford, and loan them tankers to sell the crude to US refineries. US corpos could have profited a lot more (and if the US could tax them, the US government could have taken a cut) than this weird, dumb and aggressive position of taking a cut.
- huurtehoog 19d ago> I think I heard 3 years at a minimum (don't take that number as gospel, but the order of magnitude is roughly right as a best case). I appreciate the sentiment but order of magnitude is thrown around to the point of meaninglessness. What is the 'order of magnitude' of 3 years in this case? 1-9? How is 3 years roughly the same as 1 or 9 years? Same order of magnitude, off by a factor of 3 to 9, in years is not close enough I'm afraid.
- buildsjets 19d agoYou claim there can't be a shortage, yet the rationing has already started. https://www.newsweek.com/costco-starts-rationing-motor-oil-what-it-means-for-drivers-12437829 https://www.newsweek.com/costco-starts-rationing-motor-oil-w...
- instagib 19d agoAlfano said. “Additional Group III production is being built in the U.S., but it won’t be ready until the end of next year.” Costco is the only one rationing right now.
- sssilver 19d agoCan't the US producers sell oil outside of the United States, where it's more expensive, thus generating more profits for their shareholders, thus creating a shortage in the United States, thus dragging the prices up to the global equilibrium, thus dissipating any effects of the US producing more oil than it consumes?
- pipodeclown 19d agoDemand is genrally destroyed in places where people can't afford the higher oil price which is most definately not the US. Poor countries are ehere people will suffer.
- beloch 19d agoThere absolutely can be a price shock that will make current prices look economical. Oil is priced on a global market, and if the price is high enough, that might mean many Americans are priced out of some of their own oil. The only way to decouple the domestic and international markets is export and price controls. One need only look to Canada's NEP of the 80's to understand how that's likely to turn out. Also, the U.S. is currently prosecuting a trade war against Canada that has, thanks to Trump, become a question of sovereignty for Canadians. The U.S.'s largest source of foreign oil is, potentially, one outburst from Trump away from Canada placing export duties on oil. It has been discussed in Canada, and it's viewed as an extreme option, but an option nonetheless. Trump would have to say or do something truly outrageous for that to happen, but his ability to turn allies into enemies should not be underestimated. Bottom line, fuel could become a lot more expensive, quickly. Even if there's still gasoline to be had, it still qualifies as a shortage if it becomes unaffordable. Fuel prices affect food production, delivery of goods to markets, and pretty much every aspect of the economy. Oil tankers travel at about the speed of a bicyle. If a price shock does happen it will last for months. If the war with Iran is not resolved promptly, this is precisely what will happen.
- formerly_proven 19d agoThe real question is how quickly demand can be destroyed.
- manofmanysmiles 19d agoI am hesitant to ask, and yet morbidly curious what you are gesturing at.
- positr0n 19d agoSimple not morbid at all example is me buying an EV instead of a gas car and leaving the heat at 68 instead of 70 this winter. That destroys some demand for oil.
- seanmcdirmid 19d agoI'm guessing China? China has shown the world that it can tolerate the shock, and it was even a huge boon for them as they are successfully exporting excess EV production. World demand is significant, China alone was expected to increase world oil demand to a breaking point, and that isn't happening, and in fact, China is exporting oil demand destruction.
- kasey_junk 19d agoChina has almost certainly been dramatically drawing down their oil reserves. They don’t publish trustworthy numbers on it like western countries do, but their import rates dropped too fast for any other explanation. That’s not to say they haven’t done a phenomenal job with demand destruction it’s just their own domestic usage is still very high and they have to import unlike other heavy users.
- bryanlarsen 19d agoChina is the 5th largest oil producer in the world and the 2nd largest consumer. It's not just pulling from reserves that has dropped their consumption: for instance they have been switching very rapidly to electric trucks. At the same time they've been increasing internal production. I'm sure their goal is to balance production and consumption, to electrify enough of their demand that internal production can cover the remaining demand that's more difficult to electrify: jets, tanks, plastic, etc.
- bix6 19d agoCan anyone speak to the long term impacts of this? Like is gas going to remain high for years (or even worse get rationed) and I should trade in for an EV now?
- karmakurtisaani 19d agoGet the EV. They're better anyway.
- bix6 19d agoYes they’re better. But it’s very expensive to get the EV I want that would replace my current cars capabilities.
- geoffbp 19d agoCode for the site: https://github.com/mattcone/depletion-ledger https://github.com/mattcone/depletion-ledger
- deleted 19d ago[deleted]
- grebc 19d agoThey should be banning all the financial only/paper traders. If you can’t take delivery you can’t trade.
- xboxnolifes 19d agoWhy?
- AnimalMuppet 19d agoI think the idea is that oil is expensive primarily because of speculators. That seems nuts to me. Oil might (just hypothetically) be expensive due to some kind of supply-demand imbalance.
- grebc 19d agoYou don’t need people trying to pick up pennies in front of a gigantic steam roller.
- pipodeclown 19d agoThat really makes absolutely no sense. Derivatives whole purpose is to allow people to hedge their exposure to the underlying, in this case oil prices. Many parties active on these markets have such exposure but are unable or unwilling to take delivery as part of that hedging contract..
- bluGill 19d agoThe people who take delivery hate that. They want someone else to pay for the oil that isn't in their possession yet. There is a lot of money worth of oil sitting in transport and the people who trade oil are the only ones who want that much money sitting around. (often people play the same market, but they like the separation anyway)
- grebc 19d agoYou speak to refiners do you?
- thefourthchime 19d agoI like that no one is immediately jumping on this website for being AI generated. Of course most of it is, but it looks like the author put some care into this. It doesn't seem like a one off slop from Astra or anything. Actually my favorite part is on the very bottom. The author attributes Qwen running on his local computer. "Built with help from a local AI (Qwen 3.8-27b) running on an HP Omen 30L (RTX 3090) in my office."
- drooby 19d agoI too noticed this and liked it.. This feels more like an "e-bike for the mind" and less of a chauffeur.
- deleted 19d ago[deleted]
- Sabinus 19d agoThe amount of times "global commodity" was explained in this comment section was interesting.
- dgudkov 19d agoOff-topic: what a well designed infographics. Clean, easy to read, great layout. A very good job!
- indemnity 19d agoHappy we made the switch to all EVs + solar this year. Knock on effects on the economy are going to be brutal though.