Hacker News Reader

Comment by doctorpangloss | Hacker News Reader

energy pricing is complex. some food for thought:

if everyone believes the straight of hormuz is open, even if it is not, even if 20% less oil is being moved globally, what happens to oil prices? what happens to oil deliveries?

is it possible for oil to be cheap in America while Bangladesh experiences shortages, instead of everyone paying more?

is oil the same as energy? or is it more relevant to transportation?

does it matter? suburban life is quite comfortable, a LOT of people keep choosing big single family home with yard, drive everywhere. driving everywhere is VERY comfortable. a lot of people like it. are they willing to pay more for it? does buying a house that is MUCH cheaper by virtue of being far away from a city stop making sense for 250m americans just because gas is 50% more expensive?

View on HN

I assume this is a rhetorical question. The Strait is a global shipping channel; a lot of basic commodities flow through it. Not just oil. Fertilizer, grain, basic chemicals are dependent on the channel being open. Today, the WFP was stating that food aid to Somalia has been delayed by 1+ month because of the war.

> is it possible for oil to be cheap in America while Bangladesh experiences shortages, instead of everyone paying more?

Yes. Bigger national and state stockpiles because the US can afford it, and many companies within the US can afford to pay for better futures contracts with suppliers that guarantee a future price in exchange for upfront payment that many poorer countries can’t afford because they have more immediate needs.

Energy pricing is quite easy: We have a global market, the rich people win.

The USA is responsible for this horrendes situation, the USA people will not be the people struggling and dying.

Its the poor people in every country around the globe which literaly will die, while the rich countries will just continue doing whatever they were doing.

Holidays, traveling to visit famiily and friends. It will cost more for sure but you will still do it.

The poor can't afford the food anymore because cooking becomes more expensive. going to your daily job becomes more expensive. The likelyhood of people is getting destroyed beecause the small jobs, the niche jobs are suddenly uprooted. Like the small tuktuk or the cheap and dangerous bus for 6 people is too expensive suddenly.

I wonder how many Americans realize that their soft power is dead. Will it cost them?

I have read so many arguments on this site that soft power in fact, apparently does not exist. So, you can't lose what didn't exist in the first place. So I guess a special military operation or two is no problem, according to them.

The average family spends something like $5,000 on gas a year, maybe $10k. Gas could double and it’d be felt, but it’s still just a portion of total spend.

We’ve had $4 gas before (20 years ago?!) and it was annoying but it didn’t end the world.

You're forgetting the downstream effects of high gas prices though

> The average family spends something like $5,000 on gas a year, maybe $10k.

Half of that.

https://www.fool.com/money/research/gas-prices/

The perspective from over here in HN land is very skewed.

According to the US Census, median household income in 2024 was $80,000. Add federal and state income tax* of 30%, and you're left with $56,000. Rent in lower-cost areas is around $12,000 ($1k/mo.) and health insurance (assuming ACA, not fancy private plans) is another $7000. Utility prices vary wildly but average something like $450-500 (so $6000 per year). if you don't live in a particularly high-cost area and skip luxuries like home Internet service or media subscriptions.

That's just over $30,000 left over per year for all household expenses, including "luxuries" like food, clothes, and car and home maintenance. Heaven forbid you have loans (car, student, etc.) or any revolving credit debt.

The difference between $5k and $10k in fuel costs is therefore easily 15% vs. 35% of total "inessential" spending. With food and other goods consistently been driven up by inflation and tariffs, there's just no margin for an "average" family.

(Sources vary for the above; US Census comes data from its own website, rent from TIME, health costs from Forbes, and utilities from move.org. Feel free to find better reference numbers if you doubt the above.)

*- yes, not all states charge income tax; most of the ones that don't have other taxes (sales, gas, property) to make up the gap

Speaking of HN-land assumptions lol - if you think a median family making $80k is paying $30k in taxes you got another think on backorder.

In fact, at $80k in some areas you'll qualify for medicaid for the family (or at least the kids) - up to $108k in CA for example: https://www.coveredca.com/pdfs/FPL-chart.pdf

The clanker says that "median family with kids" makes $105k and pays total tax (including property, sales, income, etc, etc) of about $23k.

In California, yes; median income is around $100k. And of course, if you have kids, a mortgage, etc., you can qualify for plenty of tax incentives. OTOH, if you have kids your food, clothing, and transportation budget are almost certainly higher, and your ability to (say) relocate to find better wages are even more limited.

I stand by the core point: the median household income leaves very little room for major spikes in essential costs like fuel, housing, and health care. Any single cost jumping from $5k -> $10k is potentially ruinous.

    a lot of people like it.

No? We have no other option in the US outside of a few major cities because the oil lobby has ruined any public transit we can hope for.

i don't own a car, i bike everywhere with young kids. i like public transport. we're not talking about that. people fucking LOVE cars. they LOVE single family homes. everywhere, in every community.

You're mistaking cause and effect. We're beholden to corporate interests that abuse the commons for maximum profitability. Single-family homes and cars are only 100 years old in our tens of thousands of years history as humans.

I would LOVE to not have to have a car. I would LOVE to live in a multi-generational home or local community with nearby third places.

You are in the vast minority. The data shows almost all people (in the US) aspire to detached single family homes if they can afford it. In the UK too, from what I can tell.

People like space, and not having shared walls.

> is it possible for oil to be cheap in America while Bangladesh experiences shortages, instead of everyone paying more?

I think the US has been ramping up domestic oil production for a while, creating an interesting situation where (global) prices are high but (domestic) supply is healthy. Prices are up at the pump in the US, but I'm not sure how much of that OPEC+ price-fixing or "risk premium".

In 2015, the US lifted its ban on exporting domestic oil. Since then, US domestic pricing has been linked to the global price.

This means that "domestic production" does not mean what you imply (which is "domestic production that must be sold in the US.") If US producers can make more money selling 100% of domestic production overseas, they will do that.

This is not price-fixing, it is the predictable outcome of a market design where US drivers bid against Asian airlines for petroleum products.

Oil is fungible. Oil producers are going to sell it to whoever pays the most. There is no law that says US oil producers have to sell it to US customers. Having domestic supply does nothing to insulate US consumers from higher prices.

i live in the suburbs and gas could 2x, 3x in price and my wallet wouldn't notice. i fill up a couple times a month.

Many products are shipped half way across the US on semi trucks, that hits everyone’s pockets even if you drive an EV.

Train’s move around vast amounts of freight but they got optimized for coat per ton for coal, wheat, etc not latency. Which then plays havoc if you try and do just in time manufacturing etc using them. Airfare and thus airfreight is simply dominated by fuel costs which hits many industries in ways that are less obvious but still expensive.

I live in a major shipping center in a state with a lot of agriculture.

I think that's why my grocery prices haven't gone nuts. For instance, I buy whole chickens (local-grown, free-range) for 99c/lb regularly.

Looking at my receipts, I spend a few hundred/week at this $KROGER. And that includes buying alcohol and non-food items like charcoal, cat litter, diapers, cleaning supplies.

I think it’s less shocking because we’ve seen several years of increased inflation. I’m frankly used to prices being noticeably higher every year where the COVID spike was being compared to 2000-2020. So sure Trump’s been consistently bad for the economy over both his terms, but wow it just doesn’t hit as hard as a pandemic.

The transaction costs of selling the median home is like $40k. Buys a lot of gas.

Not to mention that I'd still want a car in the city. Half a decade ago I paid more for parking in the city than I do for gas in the burbs.

How often do you buy groceries? How are groceries transited over to your local store?

I buy groceries 5-7 times a week. I buy things pretty by-need, for the next thing I'm cooking.

I can walk to my local $KROGER or drive 1min (which I do when I'm buying more than I want to carry.)

I assume they get to the store the same way they get to the stores in the cities. On trucks. A lot of what I buy (meat and produce) is grown in the state I live in. So I can make a 6-serving chicken and orzo dish for under $15 easily, for instance. I got it down to $10 when the meat is BOGO too.

Reply on news.ycombinator.com