Posted on 01/30/2024 8:24:15 AM PST by governsleastgovernsbest
It is a global market. Take Iranian oil off that market and prices rise globally.
Hitting Iran’s refined products though, makes a lot of sense, IF Saudi Arabia’s (etc.) oil production facilities can be defended.
The LNG (Liquified Natural Gas) part of the story:
The federal government has responded by trying to destroy Texas’s LNG industry, a major part of its economy.
And that move against LNG is a whole other story that’s just as important as the war on the border itself.
Destroying America’s and American companies’ hold on LNG has always been a core part of the Obama-Biden administration.
The O’Bidens were going to enter into an LNG partnership with China and Ukraine.
Biden’s goal was personal enrichment.
Obama’s goal — which Biden continues to put into effect, most notably now against Texas—was to “create reservoirs of economic power over the direction of industry, held by regulators and their privileged cronies.”
Part of why Democrats were so desperate to get Trump out of the White House was that his habit of enforcing the law and looking out for American interests disrupted this plan to control part of the world’s energy supply. (The linked article is extremely complex, although thankfully well-written, so I urge you to find the time to read it.)
In other words, even as he (or the brains behind him) is creating a crisis at the border, Biden is using that crisis to leverage the Obama policy regarding controlling LNG in a way that benefits China and other global players. (For now, Ukraine is no longer a player.)
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Neville Chamberlain - “We do not seek war with Germany.”
“It is a global market.”
It is more a global market than a monoply. However, in 2022, the last full year recorded, the United States imported about 8.33 million barrels per day (b/d) of petroleum from 80 countries. Petroleum includes crude oil, hydrocarbon gas liquids (HGLs), refined petroleum products such as gasoline and diesel fuel, and biofuels.
So it is not a matter of supply and demand for one country like Iran when they supply so little to the US. And since there is so much supply out there, plus we do so much business with local Canada, the little percentage Iran deals to us could easily be replaced. And there is always that little desire from those other countries to get our business coming from the replacing of the Iran hole they’ll be lining up. We won’t miss a beat and may get a better deal from eager countries trying to get the business with better prices they can offer.
We don’t need their oil more than we need the safety for the commerce in that area from houthi attacks. They hit more than just oil barges and shipping in open ocean must take the overall precidence. And this is the way pressure is put on terrorist oraganization. You make it uncomfortable for their hosts to support them. Hosts being lackadaisical or even assiting the terrorist groups are the ones that have to get heat to get rid of them. Those countries need an incentive. Hungry and broke is a pretty good one.
wy69
Mostly agreed. BUT, our price will pretty much be the global price, with a little slosh depending on source. If Iranian oil output is offline, that could be a problem for us, price-wise. In a global shortage, our other sources go up in price, even our domestic suppliers.
The other factor is that if other major economies crumble (even China’s), that will hurt us.
IMO it makes more sense to take out Iranian refined products, making them unavailable to them, but helping glut the market with crude, minimizing profit to them.
“In a global shortage, our other sources go up in price, even our domestic suppliers.”
I’m not sure on that. With a little movement by the administration, we can easily recoup the Iran shortage with our own availability let alone those other nations that would give their firstborn to get a market like the US. And I’ve never seen prices go up when competition for a guaranteed buyer is in the mix. That only happens in the US when politics are involved and those nations that were already selling could use the business. They aren’t exactly rolling in dough. And an oil deal could also open up trade with those little nations. Like Chrchill said,” “Never let a good crisis go to waste.”
wy69
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