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Comment by billfor | Hacker News Reader

Russia only provides 7% of the oil to the US according to https://www.factcheck.org/2022/03/examining-u-s-energy-indep..., and Biden has held up fracking leases according to https://www.wsj.com/articles/joe-biden-suddenly-loves-fracke..., and inflation has started long before the Ukraine war (https://www.zerohedge.com/personal-finance/extraordinary-us-...) so yeah the Biden administration bears some responsibility.

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Yes, 7% of US gas imports, I think 3% of oil imports. But either way, it doesn't matter because it's a global market. While the US' supply isn't threatened because 70% of foreign oil comes from the Mexico and Canada (plus a ton of domestic production) the price is determined in the global markets.

As for fracking leases, oil companies have over 9000 approved permits they're not using already, and when pressed on why, CEOs stated it is because shareholders want them to be conservative with capital. I suspect it's because they realize this is all transient and there's no sense investing in the long run to address a short-term spike.

Yep, oil is a textbook fungible resource and even if you only import <1%, any increases in global price are going to affect the remaining 99% of your costs.

It will be interesting to see how energy companies respond to this though. Will they play chicken with Russia to see how long it will hold on the price increase? Or will they start dropping the capex to tap the more expensive resources that the higher price point has unlocked?

Russia provides a considerable amount of oil to the rest of the world. The US exists in that same market. Countries banning Russian oil makes the price for all non-Russian oil sources go up.

Russia provides oil to other countries. When those countries don't have access to Russian oil, they have to buy more oil on the market. This means that they're bidding against the US and that prices go up.

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