Quote:
Originally posted by Ziroc:
Oh, I know you guys earn every penny. I also know that there's been piss poor upkeep on the refineries (Same as the damn electric power plants--we haven't had a new one built since what, 1964?)... And now we're paying for both I guess.
What do you think would happen if Iran cut all exports to us? Just speculate... (And also Venezuela)
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Iran would have minimal effect because we don't import a lot of oil from them, but Venezuela would have a huge initial effect as we get substantial oil from them (4th largest importer to the USA). I suspect that what would happen, at least in today's market, is that the market would redistribute itself. Venezuela still needs to sell it's oil, so they will find another big buyer - probably China or Brazil. SO that would free up oil from other countries that China/Brazil was buying from for purchase by us. But that takes time, and prices would spike in the short term but would/should eventually return to normal. UNLESS ...... the rest of demand around the world is so high that there is NO other supplier that can cover the short fall.
That IS going to happen eventually as Brazil, India, Japan, China and the rest of Asia start ratcheting up their demand. Then the $hit REALLY hits the fan! World supply is outstripped by demand, and oil/gasoline prices go ballistic. You're already seeing the start of it as China in particular is buying oil at any price they can to feed their economy.
The lack of refining capacity just makes things worse. Unless demand starts to slacken, the lack of refineries will make seasonal demands a LOT worse as they simply can not keep pace. As demand continues to grow, you start seeing shortages and prices spiral even further. It gets ugly really quickly.
Here is a good article:
http://www.vcrisis.com/?content=letters/200606230333
[ 07-30-2007, 09:06 PM: Message edited by: Micah Foehammer ]