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Comment by ggm | Hacker News Reader

We're beyond peak oil. Not peak from lack of available reserves, peak because we need and consume less.

OPEC and other market/supply manipulation, plus collusive behaviour explains pricing more than availability.

Why would anyone exploit thick, heavy, sulphur rich expensive-to-extract oil over light sweet crude? Oh right: Tar sands. Like, this hasn't been a thing for ages.

TL;DR It's politics, its bullshit. Oil is a great feedstock for drugs, fertiliser, plastics and explosives. We don't depend on it for fuel as much as we used to and we will depend on it for fuel much much less in the future.

Venezuela's problems are going to take more than US market manipulation to fix.

(we do obviously both depend on, and need continuance of access to oil, and oil prices affect inflation and industrial production in all kinds of ways. "less" is not none)

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Trump is trying to take control of the global energy market in a desperate attempt to alleviate the effects of the world dumping the dollar.

He thinks he can remain the global hegemon playing such games, will work for a short time but the dollar is done for.

I think like most people in power, he works to satisfy a domestic agenda. If he can use this to leverage a lower pump price, he wins. If he can gain traction with the oil companies in dispute over stranded assets and losses in Venezuela, he wins. It has nothing to do with anyone else, any global need, or intent.

That he can now choke oil entry to Cuba is only an added extra, Rubio in partiular will love that. It's causing extreme economic distress there.

There is no neutral arbiter, no single viewpoint declaring good or bad in these things. States act as they need to the situation they find themselves in. If it sounds amoral it is: there is no dimension of need for this to be decided on morals or even economics. It just advantages the administration right now, here, at this time, and tomorrow it may not but tomorrow is another day.

He has expressed worry over the BRIC rumoured currency threatening even more tariffs for countries not using the dollar.

Also, regional geopolitics aside, the oil companies are still mad about Iran's oil. The Israelis have been talking up a nuclear threat for decades, hasn't happened yet.

It's always about oil. I have no sympathy for the Iranian regime, but if I was part of that gang, I would be frantically building nukes.

Oil and no nukes is a bad combination.

You're overthinking it.

Trump doesn't play 5D chess or whatever, he doesn't think in terms of grand global strategy. He's got dementia and can't string five words together without going off on a tangent.

The only model you need of Trump's decision making process is this: He's doing what would have been a good idea when he was a young man.

His formative years have etched a set of policies into his brain, and there's no way he'll unlearn decades and decades of out-dated geopolitics in his sunset years.

Oil was critical in the 70s and 80s![1] The US was a net importer, unlike now. That's why he thinks controlling the oil is so important. That's all. No other reason.

That's why industry heads are all looking at each with raised eyebrows and silently mouthing "What the f%#$? Why would we invest in that!?"

Similarly with tariffs: They might have made sense decades ago, before the USA become so deeply entwined in global production chains, before all manufactured goods got complicated.

Ditto with coal. It was the cheapest and best source of energy... in the 80s.

[1] There were oil crises in 1973 and 1979, and imports peaked in 1980 when Trump was in his 40s.

Somebody on staff dreamed this up, he's just saying yes. I agree to the above being how it sold to him, but he didn't think this up, I would expect somebody else decided this was their 4D chess move, and he got the headlines.

That too! It's pretty obvious that he's being taken advantage of by everyone he meets. If this was happening to some kindly grandpa in an old folks home, you'd call it elder abuse.

It was most obvious with the $10 trillion Ukraine minerals deal, which was nonsense cooked up by a senator to "sell" Trump on the merits of allying with Ukraine long-term.

Russia tried this approach too. Their offer is $12 trillion dollars -- of course it's more than what Ukraine supposedly had on the table -- a laughable amount considering their entire GDP is only $2 trillion! Even if they gave the USA something crazy like 10% of their gross domestic production (most of which is not exportable!) this would take 60 years of ruinous payments.

You can only throw a number like this at someone if you're absolutely certain that they're totally innumerate and won't laugh in your face.

Think about the second-order implications of this: multiple people in the Whitehouse or Congress are confident in their knowledge that Trump can't tell the difference between a billion and a trillion, and/or has no idea about the size of another country's economy.[1]

Just to clarify: This is not "my opinion" about his numeracy, or lack thereof! This is the opinion of multiple senior staff who have his ear.

[1] Think back to my point about Trump's world view being "dated" to the 1970s and 80s: Back then, Russia's GDP was on par with the United States -- they were roughly equal superpowers! That's where he gets his intuition from, his ballpark numbers, relative strength, etc... THAT is why he treats Putin as an equal instead of a tinpot dictator that just happens to have nukes.

That's an interesting insight into his background. Now that you've mentioned it, there was at least one oil CEO who called Venezuela "uninvestable."

https://www.timesnownews.com/business-economy/economy/venezu...

I’ve been wondering if the showdown in Iran if it leads to a conflict will bifurcate the oil prices, the US vs rest of the world. If the Middle East is in smokes then the US can dictate oil prices with its control of the supplies in Guyana and Venezuela.

Lots of empty emotional statements, generalisations with no facts supporting them. Why bring this here? Release your anger somewhere else and really think about the issue before posting rants.

Otherwise, a really nice overview on the Venezuelan oil. Thank you.

EDIT: oh, I see I'm in the minority with such opinion here. Well, that's ok, let the bashing begin..

No, your view is valid. The people in Venezuela deserved better than the government they had, and expropriation of the oil assets broke the system and they were left to rot. It's stupid. The parade of refugees down through Brazil to Uruguay and beyond tells a tale.

But lets not pretend this is about global oil prices, or that the oil is good oil to work with. The huge reserves are there (ie unexploited, in the ground) for a reason: it wasn't economic to exploit them.

So why has that changed now? I don't think it has.

Honestly? I don't think my words were particularly angy. Writer-Reader impedence mismatch. Your own are hardly un-emotional I might add, but lets keep off ad hom, it doesn't go anywhere useful.

teapot dome forever!

ggm only needs one fact to support his argument: the current price of oil is $63.

That says two things:

- it's cheap therefore the market thinks it's abundant - $63 is less than the Venezuelan cost of production.

More supporting facts: Gasoline demand is dropping in China despite the Chinese buying cars at a very quick rate. But oil demand is flat because petrochemical demand is increasing.

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