Even if this was resolved today, it would be weeks before shut in wells are producing at capacity again, weeks more before tankers started reaching markets, and years before some of the damaged facilities were fully operational.
What a cluster
24
Mobile-Base73874 days ago
+1
weeks is incredibly optimistic
1
copperblood6 days ago
+21
Shout out to the gulf states for the worst bribes in history!
21
Novel-Lifeguard64916 days ago
+3
The gap between what the cartel can promise on paper and what can actually reach global markets while the strait stays shut is almost impossible to close through any other means.
3
Boys4Ever6 days ago
+1
Simple supply and demand dictates gas at the pumps and costs of good rising.
1
PhDinDildos_Fedoras6 days ago
+3
Really most people will just drive less, but transportation costs going up will really drive up the price of everything.
3
Boys4Ever6 days ago
+1
People cannot drive to work less. Cannot eat less? Cannot utalize utilities less? Perhaps those unemployed and living at home but rest of world has no choice.
1
Odd-Row94855 days ago
+3
Depends where you live. In car centric North America it’s an issue, in May other places in the world it’s completely doable.
Watch the mode of transportation shift to public transit and other manual forms of transportation.
3
Boys4Ever5 days ago
+1
What shift are we talking about because if it was going to shift it would have happened in 2009 when I was paying $4 per gallon which compared to today is crazy expensive. There’s no shift coming from higher oil prices. Just people burden with higher costs and no benefit from it and no sensible reason to have caused this.
1
PhDinDildos_Fedoras5 days ago
+2
People can only drive to work, they can carpool, they can take busses and trains when available. People can definitely eat less and eat simpler items.
2
Boys4Ever5 days ago
+1
Think outside your known universe. Not all can take mass transportation. For example, living in Florida mass transportation not an option form most. Those working in large cities already using mass transportation therefore this doesn't impact them. Not all can car pool. Many who could might have already.
You cannot eat less. This is fundamental to staying alive in an environment where inflation has already forced many who are paycheck to paycheck to reduce consumption and seek lower cost alternatives.
You're commenting as if rising oil prices is a new strain on the economy vs the fact it's just piling onto it. Tariffs didn't help. The supply constrains from COVID didn't help. Everything costs more today than it did 10 years ago. Current CPI of 3% something is just on top of existing CPI accumulating since the economy started and it never goes back unless we have a recession which this war might actually cause.
I'm done. I actually have a background in finance/economics. Unless you bring the same credentials then I'm assuming you just want to argue or you are trying to d******* the effect or rising costs as we can just manage it.
1
PhDinDildos_Fedoras5 days ago
+1
Throw your degree in the trash, because wtf, of course people will decrease spending, travel etc during times of economic hardship. Geez. I hope you get a refund.
1
boogi3woogie6 days ago
+2
So... the deficit is about 8m barrels per day. There's about 1.8 billion barrels held in reserve globally.
I guess that's enough to keep things going at 100% for 2/3 of the year.
There will be demand destruction when the price of oil is 70% higher. So looks like the world can sustain a closed strait for long term.
2
pkennedy5 days ago
+1
That is 225 days. Already in this for about 40 days. How many countries are going to allow the draw down to zero happen? Probably about 100 days realistically out there.
What you didn't mention is the 34% of world fertilizer that pass through there, and without any reserves anywhere. Got any useful insights into how that might impact the world?
Pretty sure Irans government can function perfectly fine for a few years. The people might not be too happy. But the government can hold it together for a few years. Not sure about the world losing 30-34% of it's fertilizers.
1
boogi3woogie5 days ago
+1
225 days of reserves - and pre-war hormuz oil is still in transit, so no, you’re not 40 days in. You’re still a week away from starting the timer. Also note that China is the second largest consumer of oil and has a separate 1.4b barrels in reserve.
We’re also assuming that oil consumption remains the same despite being 70% more expensive, which is nonsensical.
I guess everyone will have to buy US soybeans!
1
pkennedy5 days ago
+2
Takes 15 days to get to Japan/South Korea from there. Takes less to India. Those are the main importers of that oil, which means the majority of those tankers landed weeks ago. You're cherry picking the longest numbers. Right now oil is over 150, while those reserves are being used, once those reserves dip, it will be well over that.
China will be hoarding it's reserves and putting pressure on the world reserves where ever possible.
Fertilizers will skyrocket in price and already have this year, let alone for the next crops. Skyrocketing food prices will follow.
2
ruskyandrei5 days ago
-2
Most of that 1.8 billion is in China, which is not releasing anything since it's not a member of the IEA.
-2
boogi3woogie5 days ago
+6
No, that 1.8b is exclusive of china.
6
Impossible-Bus15 days ago
+2
Yep including china it's more like 4 billion and there's another 300-400 million barrels in sanctioned oil from Russia/Iran sitting offshore.
21 Comments