Oil Prices and Brewing Iranian Revolution
I just topped off the tank on my car, and will probably go top off the diesel 4×4 today as well as fill up my gas containers. This situation looks to me like it’s going to escalate to something serious, and this can’t be good for oil and gas prices.
There are ships anchored all over the world brimming with oil that has been held off the market. It will take quite a while for all that oil to move into the market (once it’s released) – regardless of what happens in Iran. Topping off your vehicles now might save you a few cents per gallon against future price movements but you’ll probably burn through it all before anything significant happens and you’ll have to fill your tanks again.
Recent experience suggests that if speculators start driving up the price of oil next week due to fears of supply disruption from Iran, the price at the pump will increase almost immediately.
Look at the rise in the price of oil over the last few weeks. In spite of all the surplus, it’s gone up tremendously. I know part of the that is the falling dollar, but some of it is market speculation.
Also, I think Chris has indicated that in spite of all the current surplus inventory, if only one major oil exporter was suddenly shut down, that surplus oil we have stored could be gone in a very, very short time….
Basic point is still the same, Will.
You may save a couple of bucks topping off your tanks now but you’re still going to have to refill them at the prevailing price – whatever it is.
History has shown that if everyone starts topping off their tanks every chance they get, it will do nothing but create gas lines and artificial shortages. Trust me – I was around during the Arab Oil Embargo in the mid-1970’s.
I understand that it is only a short term hedge if this thing really blows up, but I work from home and don’t drive much so I would not be forced to pay the higher price for almost a month. Hopefully things will have stabilized somewhat over that time and I won’t be sitting in some long gas line or paying double the price.
The larger issue is that this could be a tipping point that Chris has indicated could lead to the next energy crisis and huge price spike. Iran is the 4th largest oil exporter in the world. Any doubts about their ability to maintain current oil production is bound to stir up the oil speculators.
I understand that everyone topping off their tanks and/or buying some reserve only compounds the problem. However, at some point we all have to make a personal decision– personal preservation or sacrifice. This is exactly the point that Chris has often warned us about when the fear of scarcity takes a firm hold.
It probably won’t hurt anything to keep the tank full but as Sam indicated it will not be of much consequence. I fully expect the price to rise but unless you can buy and store lots of gas it won’t matter that much.
It’s apparent that this movement is becoming less and less about who won the election and more and more about fundamental change in Iran. Inflation is currently running at near 30%, unemployment over 20%, 2/3 of the population is under 30 and wants to move into the modern world and away from antiquated theocratic rule.
The US Government better be paying attention, because something similar is going to take place here if the economy continues to deteriorate. Every society has a threshold where they just can’t take anymore lies and corruption while their opportunities continue to dwindle…
I second that one, Will.
How about the latest explosion in Iraq. This massive truck bomb exploded near Kirkuk in northern Iraq killing 80+ and wounding 100’s. I pay close attention what happens over there because Iraq has the potential to push back a major oil crunch. By major i mean $200 oil or more. Im sure most people here know that Iraq is sitting on at least 80 billion plus barrels maybe more. Within several years Iraq could be exporting more than 7 million barrels a day, which can supplement all the currently depleting oil wells. They say that within the decade, IF the violence subsides, then Iraq could potentially export over 12 million barrels a day. Iraq’s oil reserves could delay the severe crunch by several decades perhaps??
one country greatly at risk by any disruption of supply from iran is india. india has very little oil and gas of its own and its main supplier is iran. this is why i decided over a year ago that my long term plans were int ot live in india as i had planned on.
i have many irani friends and this has been brewing for a while. the regular folks in iran have been unhappy for quite awhile with the government and actually with islam and have not been going to the mosques in the numbers they did previously. we have been getting a very slanted picture of iran from the u.s / israeli controlled media. i would suggest following developments on link tv and at english al – jazeera.
my question as always is who profits from these disruptions? and why is instability profitable anyway?