It always amazes me how streamlined the oil and gas industries are, and just how little of their profit actually benefits the communities they operate in. I feel like with most any other industry that amount of capital in an area would at least vicariously create some form of benefits or taxation for the local economy.
Cushing is a complete shithole relic from the oil boom of the 1920s. Pretty much every building they have on main street was built in the 1920s, and have been mostly vacant since the 30’s. There billions of dollars of oil being stored in the heart of the town while the people of Cushing grow up and die in poverty. Oklahoma is the most tragic state in the union, it’s like if the avarice of America manifested itself into reality as a state.
This, by the way, is how data centres work only worse. Even a hyperscale data centre in the gigawatt range is very unlikely to employ more than a hundred people. After initial construction - which will often be handled by out of state specialists, not locals - their effect on employment is basically nil. They’re sold to voters as a big deal for the community they’re in but in reality they just make noise, drink all the water and jack up power prices for no benefit.
Louisiana has entered the chat
It’s all true lol
cool pic
What I don’t get is why prices aren’t already rising more than they have. It seems like literally everyone except the Trump administration itself expects the strait of Hormuz to remain blocked for a long time, so shouldn’t that be priced in already?
Global oil reserves. Created and maintained to prevent just such a thing. It’s part of the dance the the oil industry has been doing for decades to prevent fuel hardships and price hikes, and keep people choosing to stick with their cars, instead of using public transport or alternative fuels. And it’s worked since the Arab oil embargo of the 70’s… (I was there… it was fucked up how fuel was ratioined and expensive…)
Those reserves are what the article is pointing out.
They’re coming close to hitting the level that means there is literally not enough oil to maintain the pipeline pressure that keeps it moving to the refineries. Nor is there enough oil being pumped in the US to maintain the global supply. This is BIG. Once that internal pipeline pressure drop happens, it’s going to be the price increases from hell and shortages galore.
Makes me supremely glad I can ride my bike to work.
And specific cap on oil prices is because depletion of those reserves have been so rapid, together with less China imports (they have their own high reserves). This can make the latest wolf cry for imminent peace more likely true, if reserves are on the brink.
Normally you would see the massive shortfall where ~15% of global oil demand needs to be destroyed by price increases, and you would then assign the risk that happens, and take the integral over your risk distribution times your pricing scenarios.
However, two things are going wrong:
- markets wildly overestimate Trump’s words and ability to resolve this, so are mis estimated risk
- oil execs are happy with the extra income
So they’ve put off the price increases entirely because of hubris.
they’ve put off the price increases entirely because of hubris.
They also don’t want to bite the hand that feeds them. They know that oil prices are the only thing that the majority of Americans really care about when it comes to politics. They also know that the trump administration is more than willing to cut down any government regulation or energy competitors they want. Keeping the public happy domestically and selling exports overseas for significant profits works out fine for them. They know who butters their bread.
A competent administration would have filled the reserves to capacity (75MM barrels) before starting shit with Iran. I am going to take a wild huess that they did not do that.
I mean they did nab Venezuela’s oil right before all of this. They may be using the Iran war to throw a wrench into global supply and thus make Venezuelan oil more attractive. The geopolitical value of Venezuela’s oil undoubtedly spiked at the onset of the war.
That’s 4D chess, so I doubt it. More likely is that they assumed that the Iranian regime was at a tipping point (it was), and figured theyncould swoop in, bring “freedoms” and take all the oil from an American/Saudi/UAE/Israel puppet government. Instead, all they did was solidify the existing regime and multiply their influence by an ordernof magnitude, while significantly decreasing the US standing and influence in geopolitics.
It’s pretty clear that at no point did the US plan for Iran closing the state. They should have. Every previous US government considered it the primary danger of a war with Iran. But Trump doesn’t surround himself with smart people.
Also there’s credible reporting that their belief that Iran would not close the strait was reinforced by the AI planning systems they recently invested in. So that’s fun. The blind leading the stupid.
Processing for oil is customized based upon its properties, which vary based on the source. It isn’t possible to just swap Venezuelan oil for some other oil.
I mean I know that. I never said it was an easy switch.
It is a costly, cumbersome process. What better way to make this costly, cumbersome process more attractive than to put a chokehold on global oil supply?
While this is true, to my recollection Venezuela actually does produce the right kind of oil for the US to refine. That’s believed to be what made it attractive (the other option would be Canada). Ironically the US does not have the ability to refine the oil they now produce. That’s why they export it instead.
But the idea that they’re actually going to get any oil out of Venezuela is laughable. Every company that Trump pitched the idea to turned him down, because it’s far too volatile a region and political situation for them to go in and set up billions in infrastructure.
And or just not stuck their dicks in the bear trap that is Iran.
Seriously.
Live not far from that town.
Oof, hope you’re better now
I’m fine almost bought house in that town, but glad I didn’t. It was next to the Rodeo and close to those tanks.
I used to live near there as well.
I bet there are at least dozens of us on Lemmy.
