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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. Yes US produces mostly light crud

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. 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 20d ago
Why would any producer in the US sell it locally if they could get more by shipping it?
- Aspos 20d ago
  The real question then is how quickly export ban can be implemented?
  - 361994752 20d ago
    Since oil companies will make good money from the price hike and exports, I guess they’ll lobby against an export ban?
  - daedrdev 20d ago
    Oil 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 20d ago
    Why 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 ago
      It 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 ago
    About 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 20d ago
Global trade means domestic prices move even when you’re a next exporter of a commodity.
Boxxed 20d 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 20d 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 20d ago
  You'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 ago
    Banning exports would be legitimately catastrophic geopolitically. Tariffs are mostly just politics and pretty heavily partisan. Banning oil exports would be objectively evil.
    - AgentOrange1234 19d ago
      I think banning oil exports would never happen since oil shareholders would scream, but why would it be evil?
      - orwin 19d ago
        Some 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 20d ago
How about the “deal” with Venezuela? When will that impact anything, if ever?
- AnimalMuppet 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). 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 ago
    The 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 20d ago
You 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 20d ago
  Alfano 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 20d ago
Can'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 20d ago
Demand 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 20d ago
There 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.

soperj 20d ago

Why would any producer in the US sell it locally if they could get more by shipping it?

Aspos 20d ago
The real question then is how quickly export ban can be implemented?
- 361994752 20d ago
  Since oil companies will make good money from the price hike and exports, I guess they’ll lobby against an export ban?
- daedrdev 20d ago
  Oil 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 20d ago
  Why 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 ago
    It 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 ago
  About 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 20d ago

Global trade means domestic prices move even when you’re a next exporter of a commodity.

Boxxed 20d 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 20d 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 20d ago
You'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 ago
  Banning exports would be legitimately catastrophic geopolitically. Tariffs are mostly just politics and pretty heavily partisan. Banning oil exports would be objectively evil.
  - AgentOrange1234 19d ago
    I think banning oil exports would never happen since oil shareholders would scream, but why would it be evil?
    - orwin 19d ago
      Some 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 20d ago

How about the “deal” with Venezuela? When will that impact anything, if ever?

AnimalMuppet 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). 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 ago
  The 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 20d ago

You 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 20d ago
Alfano 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 20d ago

Can'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 20d ago

Demand 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 20d ago

There 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.