The worst and most stupid bit is this:
Speaking to crowds on Wednesday, vice president JD Vance said US allies are “suffering from this, frankly, more than we are.”
He claimed this was because they had “focused on a lot of green energy scams and they’re hurting a lot more than we are.”
Vance continued:"As much as we’ve got to focus on getting these gas prices down, the reality is overseas they’re feeling it far worse than we did because we’ve taken the steps to protect our energy economy.
For anyone who doesn’t know, the US is the largest oil producer in the world, more than double any other country. So that’s the reason prices aren’t going up as much as they may be elsewhere, but also what that means is that when we attack Iran us oil company stocks skyrocket. People pay more, billionaires reap, hedge funds reap, the military industrial complex reaps. War as a service.
https://metalgear.fandom.com/wiki/War_economy
Oil prices are pretty global. If you look at the prices for European oil (Brent crude) and US oil (West Texas Intermediate), then they are $14 apart. Which is not nothing, but WTI is still up by 63% from pre-war. That is still going to hurt the US economy, a lot.
Also, in the US the oil price windfall is privatized, while the oil price pain is socialized. So the US will still feel almost the full pain.
There is some fuckery in US price. Asia is $60/bbl higher. Rumors of US export controls seemed contradicted by WH on Friday, and somehow prices went down in US by $1. Possibility of US treasury heavily shorting US futures (in secret or with secret financial allies) to manipulate price. With no export controls, US price should be $4 lower than Brent, and $8-$10 lower than Asia.
Asia get their oil through the Hormuz straight. Of course their oil price is higher.
There probably isn’t oil tankers enough in the world to equalize the supply between the US and Asia. Hence you should not expect the price to be perfectly equalized between the US and Asia.
when I said that $10 is a normal limit for Asia premium, it is based on the shipping cost ($10) to get WTI to Asia. Brent crude premium is also high. That there may not be enough shipping capacity to pick up from US, while theoretically possible, the spread is so incredibly profitable that it shouldn’t be $50 higher than normal profit, without every ship in the world lined up to make that profit.
You surely need a lot of oil tankers to sail oil across the Pacific Ocean - because each voyage takes so long. And there needs to be export oil terminals in the US towards Asia, which I assume there isn’t currently, because Asia was supplied by the Middle East.
So a priory doesn’t seem too surprising to me, that there is a price spread.
That is why the fair premium used to be $8 for asia (now $10) vs $4 for Europe. The entirety of the premium is to pay the shipping from one spot to the other.
Everything is in TX and LA. There is not special Asian only valves or anything for shipping, and US has sold plenty of oil and LNG to Asia before.
Didn’t know WaaS was a thing. This timeline is just asS.
Let’s not forget all the Venezuelan oil that the execs said was to expensive to drill, higher price might just make it lucrative.
We have tons of untapped oil fields easier to drill in the US that oil companies are sitting on, and we already get something like 1/3 of Venezuelan oil as is
But we still need the oil from the middle east, we mix our heavier oil with theirs in the refining process. We’re draining our reserves to keep the price low domestically, that and the statements that the strait will be reopened imminently is keeping the price relatively low… For now. Our economy is all speculation after all.
But that is likely irrelevant for the timescale of this conflict, right? Surely the lead time for bringing new oil fields online is measured in years.
Nah, like a couple weeks. They ship in a team along with the equipment and then they go to town
Something like deep water rigs can take years to build, but actually tapping a well is pretty quick. But then you can’t just seal it back up - or at least humanity has never bothered to learn how to do so. So companies will sit on them for years to keep production steady, if the cost of oil falls they might move it to a sacrificial shell company and leave it leaking for tax payers to eventually clean up
However, for the corporations that have to use oil instead of sell it, profits get eaten up by oil price rises. So this isn’t a simple benefit for billionaires. Some of them must be absolutely furious at Trump right now.