Oil hits $100 a barrel despite deal to release record amount of reserves
bbc.com
bbc.com
It's going to be incredibly difficult to stop Iran being able to kneecap both the global economy and in particular the gulf states, who are going to be motivated to put maximum pressure on the US to sue for peace. Incredible hubris and a lobotomised diplomatic and intelligence infrastructure in the name of ideological purity, quite the combination.
One thing for sure, it's not going to look like Russia invading Ukraine. The Iranians don't have the resolve or the support or the capabilities that Ukraine had and has. It will look more like Iraq in terms of the ability of the military to put up any resistance.
The problem with "boots on the ground" isn't that it can't succeed. The problem is it has zero support from the American public. People feel about this a lot more strongly than the other topics dividing the public.
Polls after the 12 day bombing campaign in 2025 showed that 60% disapproved the bombing. That means you probably have at least a 40% base of support for active overthroing, growing, to change the regime, which is larger than the current supporters. Maybe you could have done something with it. Wait until the previous Komenei died of his cancer instead of martyring him, and wait for the new nomination and the protests that would follow to strike (decapitation of the morality police, species to open the prisons, etc).
The way it was done just feels like the US wanted chaos and death, not meaningful change.
The US will be bogged down for years at a minimum if we entered Iran on the ground, or we would lose quickly and tuck tail.
This isn't a fight to be won in a conventional war, the administration put every chip they had on a gamble that regime change was possible with air superiority alone. I don't know of any historical example of that working, but I guess we'll see what happens.
The challenge is that regime is large and armed and they can hide and weather the storm. They'll hide in hospitals, and mosques, and schools and amongst civilians.
Getting them and disrupting their organization to a point where a popular revolt can take over seems ... lessay hard.
What needs to happen is that some parts of the military, who are a bit less fanatic, switches sides. The probability of that is very hard to gauge. There are stories of some defecting but hard to know if it's true or not.
Personally I don't see how an air campaign alone can lead to any regime change we'd actually want to see. We are all being told the Iranian public is a cohesive unit with a strong majority wanting to go back to 1978, I don't buy it.
The only likely outcomes I see, if the regime is changed at all, is a military coup with even worse people coming in, a very bloody civil war, or a faction in the country we never hear about taking over quickly by promising the world to the public. For the last one, I'd expect that to be a group more akin to the Nazis than some group that actually means well for Iranians.
Got it.
I'm not seeing any parallels.
There can be some "rally to the flag" effect but the Iranian population by large is not going to suddenly like their government.
But to turn the story around a little. Do you see Americans rallying around Trump if the Iranians attack some high profile US targets?
(Btw, the only recent documented instance of machine gun mowing down people is Saudi police mowing down Somali workers).
60% of the Iranian population polled were against the bombing during the 12 day war, bombing that, unlike this one, didn't break too much civilian infrastructure (targeting desalination plants is something I thought even Russia wouldn't do, but well, I shouldn't hold US army and Tsahal to the same standards). And that's with most observers saying that only 20-25% of the population support the regime in 'normal' time.
You had thousands dead, 50k people in prison waiting for the death penalty, a leader on his deathbed, and rather than waiting for the internal tensions between army branches to break the regime, the US chose to martyr the almost dead, suffering leader, consolidating his successor power, and eliminating and opposition in the more laical army. Nice fucking job. Now the army and the clerical police are aligned.
Even when you organize and plan correctly a regime change, a few unlucky breaks and you create a Lybia. Going there gung-ho was truly a spectacular choice, and managed to put Komenei son in place without any power struggles that could have been instrumentalized.
Then they need to drive the rest out of the country, and then keep them out forever, regardless of whatever chaos, instability, and misery arise within the country.
You can't build a stable, prosperous country with remnants of a former regime periodically showing up at people's doors holding guns and telling them that they're now part of a resistance movement.
2/ As much as I don't like the current administration (and Israel leadership), there is absolutely no way the assumptions this article makes about them are false.
There is no way the US/Israel didn't calculate that:
- the straight would be closed
- a new leader may represent similar idiologies of the past leader.
Everything that has happened so far (in regards to Iran attacking neighbors) has been extremely predictable. There is just no way these weren't calculated in.
Eppur si muove.
These folks are not our best and brightest.
https://www.wsj.com/finance/u-s-plan-to-unblock-strait-of-ho...
I think there is more going on to cause Trump drastically change his self-image.
I don't think this is a Trump administration driven decision.
https://www.thedailybeast.com/senator-lindsey-graham-brags-a...
the American government is publishing war footage intercut with Call of Duty scenes. The American secretary of defense is a former television personality with more tattoos than people in a trailer park. He said rules of engagement are stupid because they stop you from "winning" while the US bombed a girl's school.
They literally fired the people who calculate things and wage war based on memes, vibes and chatgpt recommendations
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"Chairman of the Joint Chiefs of Staff, Air Force General Dan Caine, has warned that strikes against Iran could be risky, potentially drawing the US into a prolonged conflict, US media report.
Caine has reportedly cautioned that a military action could have repercussions across the region, potentially including retaliatory strikes by Iranian proxies or a larger conflict that would require more US forces.
In a lengthy post on Truth Social, Trump described the reports as "fake news".
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The article touches on this topic, but my guess is Iran isn't part of the USD/petrol trading. If the US can convince the new leadership in Iran to start trading in USD, then that would be very good for the USA (and bad for CN, RU, and IN).
It has always had this potential, as it has happened before: see https://en.wikipedia.org/wiki/Operation_Earnest_Will (1987). But based on this history I would assume that many in the admin did not find the threat as credible as it was then. We dont seem to have a good grasp on how things have gone in the black sea. We clearly did not anticipate the level of drone attacks that have been put out by Iran.
Nothing says "we did not have a plan" when easing Russian sanctions while you ask Ukraine for help with defenses.
> a new leader may represent similar idiologies of the past leader.
I could see making a bet that with the current water crisis there the this would tip them into an "Arab spring" moment. For any one aware of the history there, it was a poor one at best.
Yeah, it looks bad, but there just isn't really any other ways for the US to magically pump more oil out of the ground instantaneously to compensate for the war.
The fact that it's both a record release and still not sufficient suggests they underestimated how bad it would be. But the US did prepare for this eventuality. And now we're throwing away our ability to be prepared for any upcoming crisis.
I don't really believe the buffoons in US leadership calculate much. It's all vibes.
I firmly believe it will become a case study in how many ways a comically incompetent government can damage a country.
As for Israel... I think their calculation is simple. They don't really care about how much damage they cause to the world economy, as long as they get to kill Muslims in general and Iranians in particular. They want death.
No, this was a calculated decision.
A few things to remember here. First, Israel and US have divergent strategic goals. (Well, that presumes the US has strategic goals, which appears to be false given the struggle the administration has had over the past week to explain why the fuck we're at war with Iran.) Israel's apparent goal is the complete destruction of the Iranian state, and Netanyahu certainly seems to believe that Israel will suffer no consequences as a result.
The second is that Trump has never faced any consequences for his actions. If anything goes wrong, he just lies and says that it's all right, changes the topic and since no one talks about anymore, hey, it's been fixed. It also seems as if he believes that nobody else truly has agency, so the idea that the enemy gets a vote in war may truly be foreign to him.
Note also the quality of people that Trump has surrounded himself with in this term. The head of the military is someone who washed out of the military officer corps (and also essentially failed in every managerial career he's had since them). They openly denigrate the importance of things like logistics in military, in favor of big, manly things like the awesome power of their missile salvos. I believe Hegseth legitimately doesn't give a crap about the boring things like naval escort missions because that's not manly, and instead cares more about how much big kaboom has been delivered to Iran, and so far the evidence of how the operation has gone to doubt completely vindicates that belief.
Fourth, even almost two weeks into the strait being closed, the US military has done nothing to reopen it. The strait is not closed because of the existence of mines, or because Iran is targeting ships; it is closed because shippers are absolutely terrified to send their ships through it. Reopening it thus requires giving those people confidence to send their ships through it, and that confidence of course requires clear, public statements. That is not happening. Instead, we get Trump giving off a different explanation of how to reopen it everytime he's asked, followed up by the US Navy denying whatever Trump said (e.g., the US Navy is unwilling to provide any naval escort). There is insufficient materiel in the theater right now to reopen the strait, and nothing is being shipped to the strait that can reopen it. From all apparent evidence, the current plan for reopening the strait is praying that it reopens tomorrow, although I have doubts that there is enough self-awareness or religiosity to actually do any praying here.
The risk of Iran closing the Strait of Hormuz is so obvious, the catastrophe of such an action is so well-known, that you would have to be a colossal idiot to go into a situation where Iran might plausibly close the strait without a plan to reopen it swiftly. And yet all available evidence leans in that direction. So now many, many people are forced to countenance the sobering idea that the US government is led by an idiot who will destroy the economy without realizing that's what he's doing. It's time for us to wake up to the fact that there are no adults in the US government anymore and do something about that.
Venezuela's leadership was barely legitimate (with voter fraud / dictactorship 3 years ago) whereas the supreme leader in Iran has had power for 36 years.
The US and Israel can claim that they've caused the IRGC sufficient damage to set them back a decade or more.
Iran will declare that they've fought off a superpower with minimal real losses. They can also claim that -- despite intense foreign interference -- they got to choose and keep their preferred leader, alive. For now.
There is no winning here for anyone.
On the topic of the weapons program: The Israeli approach is to regularly "mow the lawn" to keep their regional opponents perpetually behind. Iran's nuclear weapons and ICBM programmes have almost certainly been damaged, perhaps enough to delay them for half a decade or more. Then it'll be time to mow the lawn again, or hope that by then a more moderate leadership can sign an agreement with a new US president that's a bit more trustworthy than the current one.
It also seems like if we're to game theory this, we'd need to plot out the full escalation capacity of the USA, which the author is failing to do here. I don't like the idea of doing that because the thought is sickening, but it's necessary to consider the entire decision tree to make a remotely rational model.
In retrospect I guess game theory is used kind of rhetorically here. If you consider what's written through that lens, it's very poorly developed and doesn't make sense. Maybe this is a thing, though? Am I misunderstanding what the author means by game theory here?
I do think the asymmetry of war costs are a serious problem for the USA, and the less they're willing to escalate or otherwise mitigate this, the more serious that problem becomes. If I were to make a statement like the author did about the war, I'd frame it more like "this is going to be insanely fucking risky and expensive for the USA", but certainly not that they'll lose.
edit: Listening to the Professor Jiang analysis and I understand why game theory was referenced now. He seems much more thorough and analytical so far.
edit again: he claims Dubai will probably go bankrupt in one scenario. This seems exceedingly unlikely, but he doesn't explain why it could be true
A shame because it seems to have interesting points, but was too wordy and LLMified to keep attention. Stop telling me what it's not every other sentence, and just say what you mean. I wish folks would just use their own words.
Maybe the soldiers sending shaheds and missiles hitting other countries every day haven't gotten the memo? Did somebody forget to put a cover sheet on it?
At its core, the problem is a militarized, propaganda-driven state masquareding itself as a necessary guarantor of global order, while its sole objective is nothing more than letting no other nation threaten its supremacy. And much of the world continuing to accept that narrative either because of lack of alternatives or out of necessity.
Why did Russia attack Ukraine? Why is China threatening to attack Taiwan? Without the US (and the west more generally) Russia would retake half of Europe and China would have taken Taiwan. If you think there would be world peace you are so very much mistaken (speaking of propaganda). If you goal is to speak Russian and Chinese and live in those sorts of regimes then that's very much aligned with the US and the West just stepping back and not using force ever.
That is not the core of the problem. We can go a bit further:
- Obama was a reaction to overstepping under Bush. As a 'guarantor of global order' the US created a lot of disorder with Iraq and Afganistan. That is actually more in line with what historically the US understands under 'the global order': the US does what it wants to do and calls it the global order.
- also the relative standing of the US since the end of the 90s is falling, because of the rise of other countries. That was widely expected and forecasted. What was also expected is that empires on their way out don't act rationally, because there is ample historical precendent to that. And so here we are.
I'm not sure I would use the term "empire" to refer to the USA. It was for some time the world's only "super power" and it is still by far the strongest and most able to project power conventional military.
Whether or not it's "on its way out" - history will tell. Maybe? If it is I would claim this is more about internal forces than geopolitical ones (or internal forces influenced by geopolitics). Maybe that's also typical.
I would still say that when there is no policing the world goes to hell and there's not going to magically be "peace" by the USA not intervening. And yes, Iraq and Afghanistan were not great examples of how interventions can be followed by political gains. But- those interventions may have acted as deterrence anyways. Iraq took Kuwait by force. With no intervention why wouldn't they take all the Gulf states? It's easy to critique what happened but we also don't know what alternatives existed.
Keeping the world a peaceful place seems to require at least the threat of violence. Definitely given the composition of the world today. A threat that's never acted upon loses credibility. Too many Putins in this world who would invade and murder others at the blink of an eye if they feel that can gain them something.
the UN was created in New York mostly by the US, the dollar is the world's reserve and international trade currency, the main distinguishing point of other countries foreign politics is their relationship with the US, there are US army bases all over the world, english is the lingua franca (yes, partly carried over from the British empire, but still) etc.
> I would still say that when there is no policing the world goes to hell
and with the current policing it's going to hell too.
> there's not going to magically be "peace" by the USA not intervening
yes of course
> Iraq took Kuwait by force.
That was in 1991 and it was indeed the right reaction at the time but as the realists say it is quite doubtful we would see the same reaction in an oilless region.
> But- those interventions may have acted as deterrence anyways.
No. By the US ignoring the rules they helped to establish (2nd Iraq war) they helped to codify 'might makes right' as the only real rule and as a consequence both Israel and Russia knew they won't be stopped by the international rule based order. So we got Russia bombing and annexing parts of Georgia in 2008 (no reaction), annexing parts of Ukraine in 2014 (no reaction) and starting an all-out war in 2022 (finally some reaction but too little too late and now the US is more a friend of Russia anyway), and Israel genociding and expanding their lebensraum without any consequences whatsoever.
Israel, as a country, ignoring the fringe right, has had no desire to either have war or expand its borders. Israel simply wants to live in peace. Something the Palestinians and the Arab countries have been unwilling to accept.
You're also conveniently forgetting that pretty much the entire western world joined in post 9/11, that there was a large coalition against Iraq, and against ISIS in Syria. All those countries that were fine with using force against something that ranges from low threat to little threat to their citizenry are quick to lynch Israel when it does the same.
Attacks on Israel are also ignoring those supposed rule based world (from 1948 and onwards) and are universally recognized as war crimes (e.g. Hamas and Hezbollah firing rockets into Israeli population centers).
Maybe in your circles (obviously) there's a different story. But it's false. It's at the very least a simplistic narrative that ignores facts that don't fit in it. That's not to say Israel has necessarily always been 100% right but to equate it with Russia being 100% the aggressor is completely wrong.
Oh please, this is a straight lie. I'm pretty sure you are familiar with Area C, for example.
> Hamas initiated the last war like Russia initiated their war on Ukraine.
It was Israeli Army that bombed unknown tens of thousands of civilian to death and destroyed the vital infrastructure for millions. It's for a reason we call it a genocide (while of course you called it war, because Palestinians lives don't matter). But anyway that's a nice example of how the rules don't apply to you if you don't like them and about the very selective enforcement by the international community, especially the US.
Seems to be a common trait amongst Palestinians: fighting losing wars and blowing up shit in the process because they are unable to accept reality.
The entire Middle East should just be glassed. Encase the holy lands in concrete and sink them into the Mediterranean.
A great example of this was Obama asking Congress permission to bomb Syria after Assad used chemical weapons. A permission they delayed voting on until Russia ended up resolving the issue.
Quite the difference to how Trump's foreign adventures occur.
The blog you reference has inaccuracies. Drones are generally not shot by THAAD is a glaring one. It's very much not 2-3 million dollars to $50k. Helicopter gunships shoot down drones with bullets these days is very common and there are other economic means of bringing them down.
Most of the heavy lifting in suppressing these attacks is done by other drones patrolling the skies and attacking anything that tries to fire. Those also don't use extremely expensive munitions.
"Iran produces approximately 500 of these drones per day and holds a stockpile estimated at around 80,000 units.". Both these are false today. I'd also question if they were true when Iran was attacked. These figures don't pass the smell test and either way any stockpile is an instant target.
Everyone seems to be an expert today.
It's obviously not great that the Hormuz straits are more or less closed. We've seen in Yemen that a ragtag force can be massively attacked and still manage to fire at ships on a much larger body of water. That said we didn't really see if they can sustain it for months under heavy attack which is a possible premise here.
There are some pipelines bypassing the straits but their capacity is much smaller. It's also about 20% of the world supply so definitely other suppliers can make up for some of the loss at a cost.
I'm not an expert. But the current oil price reflects what the experts think best. And that price is still below what it was for about half of 2022. And fluctuating. What will matter is the price over months.
It's obvious that the author doesn't mean THAAD but Patriot, which are indeed used against drones. You can tell that by the missle cost the author mentions, which is 1/10th of the THAAD missle. As the argument is a cost effectiveness argument the logic holds, just replace THAAD with Patriot.
Even though Ukraine offered their cost effective solution, they have a war to fight so any serious capacity increase will probably take months if not years and these things are not static and are quickly shaped on the battlefield so the Gulf states and Israel and USA will need to develop talent that is on the battlefield, like Russia and Ukraine did.
That's a bit sloppy.
Gulf States trading dollar for dollar with Ukraine on Patriots and anti drone capability is likely to leave both parties very happy.
> Everyone seems to be an expert today.
> I'm not an expert. But
Is this post intended as a joke?
I'm not the one writing a blog and pretending to be an expert. I have some knowledge and I can write what I want.
I know THAAD is against ballistic missiles and not against drones. I know Israeli helicopters have been bringing down drones. So I write that. It's true and I don't need to "source it". This isn't Wikipedia.
> Everyone seems to be an expert today.
Pot meet kettle?
Speaking as a former helicopter gunship weapons and tactics instructor (WTI), this is a VERY broad generalization. Sure, a gunship can shoot down a drone with 20mm or 30mm but you have to get pretty close. And first you have to find it.
Other factors 1. target altitude 2. air superiority (MANPADS is a real threat over land) 3. marksmanship
It might be more effective to throw AIM-9s on helos and target drones that way...but depending on the generation of missile those run ~$300k each and the inventory is limited.
I have heard the Ukrainians are using APKWS (https://en.wikipedia.org/wiki/Advanced_Precision_Kill_Weapon...) against drone to good effect from ground and air platforms.
You're probably more of an expert than me so educate me on how this works. But it is working.
But yes, some drones are also being taken down with air to air missiles.
[EDIT: at least the videos from Israel] Those drones are typically shot down over your territory so air superiority and MANPADS are less of an issue.
My main point was it's not the $2M THAAD missile taking down a $50k drone.
EDIT: https://www.twz.com/air/ah-64-apache-is-getting-proximity-fu...
https://en.defence-ua.com/news/ukrainian_naval_aviation_heli...
https://kyivindependent.com/ukraine-shot-down-3-200-shahed-t...
https://theaviationist.com/2026/03/10/uae-ah-64-apaches-coun...
https://taskandpurpose.com/tech-tactics/us-apache-pilots-dro...
Thanks for sharing.
And yes, find and fix with a strategic radar platform. It's tough to set up DCA (defensive counter-air) lanes with helicopters; they're slow and most need to refuel on the ground (an argument could be made for using H-60's. Some variants can refuel in the air).
Depending on the threat picture, it could be feasible to set helos up to defend naval assets or use them like Israel has been to defend land-based high-value assets.
Israelis get advanced warning for (most) drone attacks and have to go into shelters/safe rooms just like with missiles. There is a specific/different kind of warning.
AFAIK in the big attack last year these Shaed drones were shot down by jets with air-to-air missiles.
I served in the IAF on that northern border (not a pilot or anything like that but a somewhat relevant role) so at least I'm familiar with the topography and distances.
The other thing coming into play in Israel these days is the laser system: https://en.wikipedia.org/wiki/Iron_Beam I think it already shot down at least one drone.
Also- Thanks for your service and for the "insider" perspective.
some footage of AH-64 blowing up drones.
Japan, an island nation with virtually no natural resources of its own, depends on it for a staggering 75% of its oil. Japan’s Prime Minister has warned plainly that if the Strait closes, the entire Japanese economy will collapse within eight to nine months. Not slow down. Not a contract. Collapse.
Not that I’m claiming the CBC and such are doing something sinister here. Just that I no-longer get the full story vibe I recall getting back in previous U.S. wars.
Figuring out what takes its place is a hard problem that no one seems to have cracked. I don't know if its replacement will be very profitable, but we all lose out when media isn't working. Having a shared reality is fundamental for a healthy society.
Media mergers need to just be illegal, Disney/Viacomm/TimeWarner (god I don't even know what the big ones are any more) need to be broken up.
"we don't want to make the administration mad so our merger will be let through" is just absurd.
So in the news you will see that Iranians are bombing hotels, but what you won't see is that Iranians were able to knock out for example THAAD and now USA needs to move one in Korea into the Middle East.
America prosecutes wars depending on political popularity. Making it incredibly unpopular to do so is a very real strategy.
Not that I’m suggesting it isn’t still ugly and horrible to bomb civilian targets like girls’ schools.
Maybe Le Monde give the right balance?
Closure was something I had known was a risk with any conflict with Iran after learning about the Tanker War in some politics class in college, and following the various threats over the past 15 years or so. It seemed like something that should have had tons of coverage as soon as I heard the US had attacked Iran, and I wanted to know what was actually going on with it...yet all of the mainstream press seemed to skirt around it until oil prices finally spiked on Sunday, even though traffic through the strait had fallen off a cliff a week beforehand.
CBC does it too. https://www.cbc.ca/news/world/livestory/iran-israel-us-war-d...
Though I will say CBC's seems to not include as many individual strike and counterstrike posts as others.
The CBC hasn't done any good reporting in the last decade that I can tell. They just copy-paste from news agencies based on their ideological principles or something.
Another source is: https://understandingwar.org/analysis/middle-east/iran-updat...
You can definitely get some color on YouTube. Iran is fighting back but that's not what's going to decide the war (e.g. the damage to Israel or to the Gulf states). They are taking a lot more damage then they're dishing out and the scale of their counters goes down every day. The straits are a very different story since it doesn't take much to threaten the ships to the extent nobody wants to take a chance. One drone, or mine, or a missile, and the straits are closed. Even if the US and Israel are able to pretty much completely suppress Iranian attacks on Israel and the Gulf states the straits might remain closed.
EDIT: https://www.ynet.co.il/news/blogs/article/skwano1cbe#autopla...
This is Hebrew but I just saw reporting about 6 ships on fire from Iranian attacks and there are photos...
There should be ~ $250/barrel cost added to the market price to account for externalities (barrel of oil releases 0.43 tons of co2 and avg social cost of carbon from https://arxiv.org/html/2402.09125v3 is $500+/ton)
The dependence, of literally almost everything, on the continuous flow of oil from few parts of the world has been an obvious point of strangulation for longer than I've been alive.
I mean, I understand that it's so entrenched that politics is owned by it, but, hell, it's been, what a week and a bit, and already Australian media is trying to talk down panic about petrol shortages.
The blind leading the blind.
And of course mitigating the climate catastrophe should be much more entrenched, there's vastly more voters whose lives will be impacted by it than by fortunes of the oil business.
The other block in contrast are advocating in favor of fossil fuel industries, but are mixed (some in favor, some against) in regard to thermal power stations, and primarily promotes nuclear for the grid. They are also those that usually bring up national security and energy independence, with reduce dependencies on energy trading to maintain the grid. That block voted against the decision to define natural gas as green.
So the political state in EU is that one block promotes fossil fuel in the grid, and the other promotes it in the industries and transportation. We need to be rapidly phasing out fossils usage to mitigate the climate catastrophe, but no side is really willing to give up on what those fossil fuels enable, and that is despite the now many years of wars that have major impact on economy and security.
2026 I swear..., I'm expected a post on top of HN any day about
"i've written all code by hand this month, here is what i learnt".
My understanding is that its 20% of total oil, but that around half of all oil production is used domestically where it is produced and never enters global markets.
Unless I missed something when fact checking that, Iran is capable cutting off 40% of all purchasable oil.
To begin with, it assumes that oil currently used domestically isn't on the market, but what do you expect oil producers to do if foreign buyers make a higher bid for the "domestic" oil? Or to put it another way, there's a reason the market price goes up by essentially the same amount in the oil-producing countries as everywhere else.
Then it assumes that oil that currently goes through the Strait has to. Oil can also leave the middle east by going west, e.g. to Europe. You might think that doesn't help India or China, but it's still a global commodity with a global price. India and China could then buy oil from Russia, Kazakhstan or whatever other country that Europe had been buying from and now isn't because they're getting more oil from the middle east.
Does this still raise the price? Yes it does, because there is a reason they were doing it the other way previously -- doing something else will have higher transportation costs. But does it mean 20% of global oil supplies will be cut off? Not really, it mostly means you'll have to increase the average distance it gets transported and pay a few percent more to cover the higher transportation costs.
Pipeline capacity to the west is pretty limited. The connection via Syria is affected by the war aftermath, the Iraq/Turkey route is already at capacity, and the Saudi connection to the Red Sea is vulnerable to resumption of Houthi attacks. There's some connectivity via Oman, but that's largely natural gas rather than oil.
I don't know enough about European refineries specifically, but even if you could entirely redirect oil out of the middle east (it wouldn't be that simple), regional refiners may not be setup to process that different type of crude at a similar capacity.
Russia does produce some lighter oil, but the usual Ural / Volga-sourced stuff couldn't be substituted without additional hydrotreatment.
The original claim was that all of the "domestic" oil was off the market.
It's also not clear why oil used for oil production requires special treatment. To the extent that it's used for transportation it's susceptible to substitution with electric vehicles like anything else. To the extent that it's used for heat in refineries it could likewise be substituted with non-petroleum heat sources when oil is at a premium. More than that, many of those costs also apply to unrefined oil currently going through the Strait, so that proportion is on both sides of the ledger anyway.
And to the extent that it can't be substituted, it's just a fairly arbitrary subclass of the broader category of consumers with inelastic demand, which implies that oil-producing countries might have a higher percentage of inelastic demand (even then assuming that oil production has more inelastic demand for oil than other things), but by significantly less than the proportion used in oil production, because it's just being averaged in to the broader category of all short-term inelastic global oil consumption.
> Pipeline capacity to the west is pretty limited. The connection via Syria is affected by the war aftermath, the Iraq/Turkey route is already at capacity, and the Saudi connection to the Red Sea is vulnerable to resumption of Houthi attacks. There's some connectivity via Oman, but that's largely natural gas rather than oil.
Pipelines are the most efficient way to transport it, not the only way. You import some tanker trucks and drivers and you can transport as much as you want, but it'll cost more. We're not even talking about thousands of miles, bypassing the Strait of Hormuz via a land path in the UAE is about an hour.
And the Houthis are a problem if you're trying to get to Asia, not Europe. The Saudi pipeline goes to the Red Sea well north of Yemen and from there has a sea path to Europe via the Suez canal.
On top of that, the Iranian military is already in a full conflict with the US. Whereas if the US parks an aircraft carrier with satellite support in the narrow part of the Red Sea ready to rain down fire on any Houthis that attack an oil tanker, but is otherwise going to leave them alone, how many do they have who are inclined to choose certain death to attack a ship most likely destined for Asia out of "solidarity"?
You won't replace oil pipelines or sea-based transportation by importing tanker trucks, its completely inpheasible on any reasonable timescale.
Similarly, you will never replace petroleum-based transportation at scale in any near term future with electric or other non-petroleum sources. The power to weight ratio of oil, ease of transport of liquid oil, and scale of petroleum a powered vehicles is simply unmatched. Go ahead and do the math on what it takes to replace a diesel oil tanker at sea to cross from Iran to China or the US to Europe, and don't forget to consider all the materials required to make battery storage equipment for such a trip. It doesn't work today and we aren't near a solution today that can replace oil with a viable, sustainable alternative.
I'm not arguing that they're always and instantaneously fungible, my point is that the aren't any less fungible than they are when the thing you're transporting isn't oil, so it doesn't make much sense to make a special carve out for the cases where the load is also the fuel.
> You won't replace oil pipelines or sea-based transportation by importing tanker trucks, its completely inpheasible on any reasonable timescale.
An oil tanker ship holds around 55 million gallons. An oil tanker truck holds around 10,000. Truckloads per ship is therefore around 5500. If the round trip is around two hours, and assuming that pumping is a relatively small proportion of the time (you have high capacity pumps at both ends or bring a few percent more trucks so drivers can switch trucks instead of waiting or both), you'd need around 500 trucks and, assuming 8 hour shifts, 1500 drivers per oil tanker ship per day. In normal times something like 60 oil tanker ships go through the Straight per day, so if you had to do all of them it would be on the order of 30,000 trucks and 90,000 drivers.
That's not a small number, but at the scale of global trade, it doesn't seem like an impossible number. And you wouldn't actually be doing all of them this way, you would be diverting as many as you can to other paths and only doing this where it's the least bad alternative. 10 ships a day would be ~5000 trucks. Is it infeasible to find 5000 tanker trucks in the world?
> Similarly, you will never replace petroleum-based transportation at scale in any near term future with electric or other non-petroleum sources.
You're not trying to replace all of it instantaneously, you're trying to substitute at the margins. Does it make sense to try to use electric trucks if you were doing the above, trying to run the trucks continuously in a place that presumably doesn't have adequate charging infrastructure? Almost certainly not.
Does it make sense to convert fleets of millions of delivery trucks to electric or plug-in hybrids, when they're doing continuous stop and go that benefits from regenerative braking? Absolutely it does. Does it make sense to add a battery car to already-hybrid diesel electric freight trains so they can do regenerative braking on down grades, and add a pantograph and some overhead lines to the up grades so they can run electric there instead of burning diesel? Also yes.
> The power to weight ratio of oil, ease of transport of liquid oil, and scale of petroleum a powered vehicles is simply unmatched. Go ahead and do the math on what it takes to replace a diesel oil tanker at sea to cross from Iran to China or the US to Europe, and don't forget to consider all the materials required to make battery storage equipment for such a trip.
This seems like a pretty attractive option for large ships if you're worried about power to weight ratio:
https://interestingengineering.com/energy/hd-hyundai-abs-pla...
[1] https://www.thegreatsimplification.com/frankly-original/wide...
I wonder how prediction markets are affecting all this.
In this case however you can pretty much do the same thing with other financial instruments like future contract on oil. Either way, I agree decision makers shouldn't be allowed to trade (and I think are forbidden in most countries).
Plus the longer it goes, the harder it is to bring back up production or refining capacity.
Give it 30 days, things might have changed.
one again the world suffers thank to US stupidity.