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.
> 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.
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.
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.
Depends what 'sovereign' implies. The will of the people? Or maybe the will of those that lobby government the hardest (e.g. oil companies)? If the latter, then export bans might not arrive anytime soon.
Sovereign doesn't mean any of those in this context. It means that the US can set its foreign and domestic policies as it pleases. How it decides those policies is another matter.
Thing is, if there is a worldwide shortage, US wins.
To the benefit of those on the political left, an oil shortage shows itself almost exclusively in poor countries (because they actually don't have money to pay), and these tend to not have automotive industries of their own, thus have no reservations about switching to electric cars, which means that any oil consumption decline these days tends to be sticky - when the oil flow resumes, these people won't need it anymore. No one is going to get back to driving an ICE car once they tried electric, even if they initially did it under duress.
It’s a global commodity unless there are export restrictions. Russia maintains petrol/diesel prices way below world level thanks to export ban among other things. China did impose temporary export restrictions too. I would not be surprised if Trump will eventually impose export restrictions on refined products to maintain low domestic prices.
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".
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.
> 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.
Venezuelan oil production has declined by about half since Chavez took power. Given the losses they suffered from expropriation, the oil majors aren't particularly keen on returning to Venezuela without stronger guarantees, and oil executives aren't idiot--they understand that Trump is not a reliable partner and that there's a good chance that any deal he strikes with Venezuela will fail to be honored past 2028 (or possibly even before then).
There's also the fact that Venezuelan crude oil is basically among the worst grades of crude oil, the sort of stuff that the refineries don't want to use unless they have no other options. Which also means that as global oil demand hits its maximum (likely within decades), this is also going to be some of the first oil production to be permanently mothballed. With massive necessary investment to get anything running, subpar product, and a very uncertain political situation for the necessary long-term investment, most oil companies are reluctant to invest.
As a result, the only major oil company to have really been contemplating investing in Venezuela is Chevron (which itself appears to be mostly hedging its bets); Trump more recently announced another deal with a supposed major investment in an unnamed operator to extract oil from Venezuela, but without any companies being named, I'm skeptical of how real it is as opposed to merely being a vehicle for graft.
As AnimalMuppet says, if anything does get built, it's on the order of years before anything starts flowing.
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?
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.
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.
Wrong. Storage is the issue. In my town in switzerland we produce a surplus of solar energy, so much that we can't even sell it back to the electricity company.
But the storage is too limited. The surplus during the summer doesn't translate to the winter months so other types of electricity generation is still required.
> The demand is already there. It's the supply that is the issue.
Somehow many societies are able to power a huge amount of transportation via electrified rail and bus systems. That's an existing solution that requires zero new technology.
And of course there are EVs for places that somehow can't figure out how to do electrified mass transit.
That is still demand destruction: under supply of a resource triggers substitution activity which means the demand for that specific good never returns after.
Can 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?
This years RAAM (Race Across America) winner finished in 8 days 19 hours, that's almost 350 miles per day.
Normal people no, but top ultra endurance cyclists can do 300 miles a day for two weeks straight. Especially if they are not self-supported and/or the course is not too hilly.
Trump supporters will tell you not to worry as he has a deal that almost done and oil will once again be cheap soon. (I didn't look up what he is saying, but he typically says things like that).
There are a number of pessimists that will tell you that things will never get better. Or maybe they get better for a short time but peak oil is here and things will get worse again soon.
My guess: Iran has every incentive to keep oil prices high in the US until after the election in November as the Democrats are yelling that much of high gas prices are caused by Trump attacking Iran; the higher fuel prices are the more likely it is Trump supporters in Congress lose their reelection bid and in turn hurt Trump. However I can't predict what happens after this - there are a lot of different force in the world (Both Iran and other countries) that are hurting and nobody know who will "blink" or "do something"; much less what what actions will be taken as a result.
If you can charge at home then trading in for an EV makes sense. Electric at home is vastly cheaper than fuel. If you can't charge at home, electric prices are all over, generally cheaper, but often not by enough to be worth the bother.
Better yet, demand your town put in good public transit. Good transit is expensive in the short run, but a good network means almost everybody in the city sells one car (most people live in a family situation with multiple cars so selling leaves one for whatever their objection is).
I think the future of gas prices looks ... interesting. In the short term we have the war jacking the price up, but in the medium term the increasing popularity of EVs pushes down demand and along with it prices. For a time. Until we start permanently turning off capacity, at which point prices start going back up again. I'm obviously no expert, but I envision the process of going ICE->EV being a series of waves, ebb & flow, as fuel prices react.
Unlike wars, EV adoption is a slow, steady, relatively predictable process. I don't think it'll have a very noticeable impact on gas prices the way short term crisis tend to.
The more noticeable factor will be reducing how many people even care about gas prices in the first place.
>If you can charge at home then trading in for an EV makes sense. Electric at home is vastly cheaper than fuel. If you can't charge at home, electric prices are all over, generally cheaper, but often not by enough to be worth the bother.
Sadly, in CA, charging at home (minimum $0.26/kWh) isn't that much cheaper. Sure, maybe half the price of fueling up an efficient gas car, but not like 5x cheaper or anything..
I do have SUV ( Pathfinder ) for camping, skiing, kayaking, and other long trips. And 2 seats electric Smart for local commute - groceries, school drop off/pickup, gym visits etc. This is 95% of my family car use. The 90 miles charge is about $2, I do it 2 times a week.
Yes, this is CA
> Sadly, in CA, charging at home (minimum $0.26/kWh) isn't that much cheaper.
Just get some solar panels. We live on a sailboat and charge the electric outboard of our dinghy (kind of our "car", this is what we use to go to stores etc) with the surplus on sunny days.
Iran has continued to fire at tankers exiting the Strait of Hormuz under U.S. Navy escort, and apparently the U.S. can't afford to do anything about it.
The Bab el-Mandeb Strait, which is an alternative route used by the Saudis, is being closed by the Houthis. The Houthis are a close partner of Iran.
And the East-West pipeline, which was another alternative route owned by the Saudis, was blown up. They went for the pumping stations, so repairing it will take at least a month, and there is no way to repair it without it possibly being hit again anyway.
The oil infrastructure attacks by Ukraine are mainly targeting refineries, which would normally lower oil prices, since crude oil is an input to these refineries. These attacks are increasing diesel prices, though.
Iran is trying to break the world economy so the US packs up and leaves. Israel wants to keep the US there because the US is fighting one of their strongest enemies. Because Israel "is the US's greatest ally" (as many politicians have proclaimed over the years), they have a lot of sway as to what the US does. Not to mention, they seem to do whatever they can to derail any peace process.
Iran knows this, and therefore wants to make sure the US experiences enough pain to never come back and try to fight them again.
So, until the US is willing to stop, which rests heavily on when Israel is willing to stop, oil prices will remain high. (Or Iran folds, which they aren't going to do, they've been preparing for years and have seen how the US treated Venezuela - they stole all their oil, and left the regime intact)
Also, we've seen nothing yet, as the soft storage (the amount of oil that's normally floating through rhe global network) and the SPR's are all running dry. I would guess $150 oil in about a month.
This is the might our 20 trillion dollars spent on military has bought us.
A month or two ago they sent out an email asking common military members for ideas to deal with Iran. We've paid think tanks millions of dollars for plans like that. Guess they weren't worth anything in practice though.
The US has a lot of military hardware but questionable leadership just now. At least they've brought in testosterone tests so the military should look the part.
This is what you get when you hire a TV personality who cares more about soldiers looking masculine (and white) than anything else and launch an illegal war for no reason other than "those guys make me angry."
We are governed by people who think the very idea of expertise is dumb. A system of pure id and grievance. Like children playing war in the bath tub.
Depends whether you expect this conflict to continue.
If these are the opening salvos of WW3 or even just a protracted regional Mideast war, yes you should get the EV. Experience in WW2 was that it became impossible to get petrol & diesel at any price. Supply lines would often be disrupted, and what petroleum products were available were usually allocated to the military.
If tensions die down after the midterms and eventually a peace accord or even stalemate is reached, you're looking at about 2-3 years of current prices. It'll take time to rebuild production in most Middle Eastern countries, many of which have had large oilfields, pipelines, and tanker loading facilities destroyed. You'll have to run the financials yourself of how much an EV costs, how much life you have left in your existing vehicle, and what local gas and electricity costs are, but I believe most EVs don't pencil out economically if it's just 2-3 years of current gas prices.
A third option is that everybody else (notably China and India) switches to EVs. If this happens gas will go down in price through reduced competition for it, and so you may be able to enjoy cheap gas for the remainder of your vehicle's lifetime. But note that in this scenario, you probably want to switch to an EV yourself, as eventually parts, repairs, and infrastructure for gas cars will become impossible to find.
Note that it is now outside of the control of the POTUS or U.S. military whether this conflict continues. They can prolong it, but they can't stop it. Recent aggression has been driven by Iran and its proxies, who are demonstrating that there is nothing the U.S. can do about it.
Well the US could put boots on the ground, launch nukes, do any number of crazy things. And sadly with the current administration it seems everything is on the table.
They don't really fix the problem, though. Problem is a lack of commercial activity in the region because people don't want to die. Turning the place into a literal warzone (again), launching nukes, or other crazy things does not instill confidence that you won't die sailing there.
This is one of those cases where the only winning move is not to play, and both belligerents have proven stupendously bad at not playing.
It's not outside their control. The US can stop the conflict by giving Iran what they want, but it would admit defeat and lose face, so it will continue.
I mean the EV is a good choice, but the bigger impact here is that everything gets more expensive due to the increase in costs of shipping, refining, producing, and heating/cooling...
Which often aren't as visible as paying $82.00 to fill up your ICE vehicle, but add up to much more of an impact.
If you can install a charger at home, get a plug in hybrid at a minimum (if you can afford it). The concept is old enough to support a used market but still pricey.
My mom won't get rid of her 2014 Leaf and won't go back to gas after a recent electric VW pickup. It's the only way to go (if you can afford it).
The big commodity traders have no problem with taking delivery. They use storage and shipping as a part of their strategy. They make many billions each year, even more so when there is disruption.
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[ 0.27 ms ] story [ 36.2 ms ] threadYes 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.
Clearly you haven't been paying attention to oil and gas prices
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.
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.
Tariffs are mostly just politics and pretty heavily partisan. Banning oil exports would be objectively evil.
> It’s silly to blame the current generation for something their ancestors did.
As silly as it is, it's widespread practice around the world.
To the benefit of those on the political left, an oil shortage shows itself almost exclusively in poor countries (because they actually don't have money to pay), and these tend to not have automotive industries of their own, thus have no reservations about switching to electric cars, which means that any oil consumption decline these days tends to be sticky - when the oil flow resumes, these people won't need it anymore. No one is going to get back to driving an ICE car once they tried electric, even if they initially did it under duress.
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".
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.
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.
There's also the fact that Venezuelan crude oil is basically among the worst grades of crude oil, the sort of stuff that the refineries don't want to use unless they have no other options. Which also means that as global oil demand hits its maximum (likely within decades), this is also going to be some of the first oil production to be permanently mothballed. With massive necessary investment to get anything running, subpar product, and a very uncertain political situation for the necessary long-term investment, most oil companies are reluctant to invest.
As a result, the only major oil company to have really been contemplating investing in Venezuela is Chevron (which itself appears to be mostly hedging its bets); Trump more recently announced another deal with a supposed major investment in an unnamed operator to extract oil from Venezuela, but without any companies being named, I'm skeptical of how real it is as opposed to merely being a vehicle for graft.
As AnimalMuppet says, if anything does get built, it's on the order of years before anything starts flowing.
https://www.newsweek.com/costco-starts-rationing-motor-oil-w...
Costco is the only one rationing right now.
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.
But the storage is too limited. The surplus during the summer doesn't translate to the winter months so other types of electricity generation is still required.
And what's great about EVs is that they are also storage.
Somehow many societies are able to power a huge amount of transportation via electrified rail and bus systems. That's an existing solution that requires zero new technology.
And of course there are EVs for places that somehow can't figure out how to do electrified mass transit.
Normal people no, but top ultra endurance cyclists can do 300 miles a day for two weeks straight. Especially if they are not self-supported and/or the course is not too hilly.
Trump supporters will tell you not to worry as he has a deal that almost done and oil will once again be cheap soon. (I didn't look up what he is saying, but he typically says things like that).
There are a number of pessimists that will tell you that things will never get better. Or maybe they get better for a short time but peak oil is here and things will get worse again soon.
My guess: Iran has every incentive to keep oil prices high in the US until after the election in November as the Democrats are yelling that much of high gas prices are caused by Trump attacking Iran; the higher fuel prices are the more likely it is Trump supporters in Congress lose their reelection bid and in turn hurt Trump. However I can't predict what happens after this - there are a lot of different force in the world (Both Iran and other countries) that are hurting and nobody know who will "blink" or "do something"; much less what what actions will be taken as a result.
If you can charge at home then trading in for an EV makes sense. Electric at home is vastly cheaper than fuel. If you can't charge at home, electric prices are all over, generally cheaper, but often not by enough to be worth the bother.
Better yet, demand your town put in good public transit. Good transit is expensive in the short run, but a good network means almost everybody in the city sells one car (most people live in a family situation with multiple cars so selling leaves one for whatever their objection is).
The more noticeable factor will be reducing how many people even care about gas prices in the first place.
Sadly, in CA, charging at home (minimum $0.26/kWh) isn't that much cheaper. Sure, maybe half the price of fueling up an efficient gas car, but not like 5x cheaper or anything..
Just get some solar panels. We live on a sailboat and charge the electric outboard of our dinghy (kind of our "car", this is what we use to go to stores etc) with the surplus on sunny days.
Solar panels are ridiculously cheap now.
The Bab el-Mandeb Strait, which is an alternative route used by the Saudis, is being closed by the Houthis. The Houthis are a close partner of Iran.
And the East-West pipeline, which was another alternative route owned by the Saudis, was blown up. They went for the pumping stations, so repairing it will take at least a month, and there is no way to repair it without it possibly being hit again anyway.
The oil infrastructure attacks by Ukraine are mainly targeting refineries, which would normally lower oil prices, since crude oil is an input to these refineries. These attacks are increasing diesel prices, though.
Iran is trying to break the world economy so the US packs up and leaves. Israel wants to keep the US there because the US is fighting one of their strongest enemies. Because Israel "is the US's greatest ally" (as many politicians have proclaimed over the years), they have a lot of sway as to what the US does. Not to mention, they seem to do whatever they can to derail any peace process.
Iran knows this, and therefore wants to make sure the US experiences enough pain to never come back and try to fight them again.
So, until the US is willing to stop, which rests heavily on when Israel is willing to stop, oil prices will remain high. (Or Iran folds, which they aren't going to do, they've been preparing for years and have seen how the US treated Venezuela - they stole all their oil, and left the regime intact)
Also, we've seen nothing yet, as the soft storage (the amount of oil that's normally floating through rhe global network) and the SPR's are all running dry. I would guess $150 oil in about a month.
A month or two ago they sent out an email asking common military members for ideas to deal with Iran. We've paid think tanks millions of dollars for plans like that. Guess they weren't worth anything in practice though.
That rhetorical horse left the allegorical barn a long time ago.
We are governed by people who think the very idea of expertise is dumb. A system of pure id and grievance. Like children playing war in the bath tub.
What if they deploy hordes of those cheap Ukrainian anti-drone interceptors, near each station?
If these are the opening salvos of WW3 or even just a protracted regional Mideast war, yes you should get the EV. Experience in WW2 was that it became impossible to get petrol & diesel at any price. Supply lines would often be disrupted, and what petroleum products were available were usually allocated to the military.
If tensions die down after the midterms and eventually a peace accord or even stalemate is reached, you're looking at about 2-3 years of current prices. It'll take time to rebuild production in most Middle Eastern countries, many of which have had large oilfields, pipelines, and tanker loading facilities destroyed. You'll have to run the financials yourself of how much an EV costs, how much life you have left in your existing vehicle, and what local gas and electricity costs are, but I believe most EVs don't pencil out economically if it's just 2-3 years of current gas prices.
A third option is that everybody else (notably China and India) switches to EVs. If this happens gas will go down in price through reduced competition for it, and so you may be able to enjoy cheap gas for the remainder of your vehicle's lifetime. But note that in this scenario, you probably want to switch to an EV yourself, as eventually parts, repairs, and infrastructure for gas cars will become impossible to find.
Note that it is now outside of the control of the POTUS or U.S. military whether this conflict continues. They can prolong it, but they can't stop it. Recent aggression has been driven by Iran and its proxies, who are demonstrating that there is nothing the U.S. can do about it.
This is one of those cases where the only winning move is not to play, and both belligerents have proven stupendously bad at not playing.
It remains to be seen for Iran. I wouldn't be surprised if Iran gets out of this with the sanctions removed (to say the least).
Which often aren't as visible as paying $82.00 to fill up your ICE vehicle, but add up to much more of an impact.
My mom won't get rid of her 2014 Leaf and won't go back to gas after a recent electric VW pickup. It's the only way to go (if you can afford it).
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."
This feels more like an "e-bike for the mind" and less of a chauffeur.