But for the US, there's no question like that. It produces a lot lot more than it consumes anyway. There can't be a shortage.

Yes US produces mostly light crude and production of refined products requires also inputs of heavy one, but it's not produced in the Middle East anyway, so current situation can't impact that, either.

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ncallaway 8 hours ago | parent | next [-]

> But for the US, there's no question like that. It produces a lot lot more than it consumes anyway. There can't be a shortage.

It's a global commodity. The reason there likely won't be a shortage in the U.S. has little to do with our production volumes, and has more to do with the fact that we're rich enough to be able to afford the higher prices when many other countries will have to forgeo using oil.

But if we weren't a rich country and we couldn't afford to pay a higher price for oil than many other nations on earth, we would produce and export oil to people that can pay more.

Ireland during the famine produced enough food to feed every person. But much of it was exported to other places, that could afford to pay a higher dollar amount to survive.

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oblio 8 hours ago | parent [-]

You're 90% of the way there.

The US is also sovereign and if things would become really bad the government would just ban exports.

Ireland wasn't sovereign and it turns out, as much as other countries act brotherly (not that the UK really did), nobody really cares about you like you care.

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tmnvix 5 hours ago | parent | next [-]

Depends what 'sovereign' implies. The will of the people? Or maybe the will of those that lobby government the hardest (e.g. oil companies)? If the latter, then export bans might not arrive anytime soon.

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cryptonector 5 hours ago | parent [-]

'Sovereign' here means that the US govt is able to impose export restrictions, not that the People's will or special interests' desires are relevant. Of course 'can' != 'will'.

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tmnvix 5 hours ago | parent [-]

Interestingly, my dictionary gives the following (amongst other definitions of course):

> possessing supreme or ultimate power: in modern democracies the people's will is in theory sovereign.

	▲	cryptonector 2 hours ago \| parent [-]
		Your dictionary is wrong. For example, in the UK Parliament is sovereign, not the people. That's effectively how it is in representative democracies or republics where there is no fast representative recall mechanism. The U.S. Constitution doesn't say that Congress is sovereign, but the effect is the same. For that matter, the U.S. President has a great deal of power.

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WarmWash 7 hours ago | parent | prev | next [-]

Banning exports would be legitimately catastrophic geopolitically.

Tariffs are mostly just politics and pretty heavily partisan. Banning oil exports would be objectively evil.

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AgentOrange1234 7 hours ago | parent [-]

I think banning oil exports would never happen since oil shareholders would scream, but why would it be evil?

	▲	orwin 7 hours ago \| parent \| next [-]
		Some countries rely on oil imports to produce agricultural products, and suddenly cutting them off the global market would kill hundreds of millions from hunger over the next year. Look at what happened in Cuba. Without china giving them old solar panels and used batteries, they would have revolted already. They still have a huge food insecurity issue for next year, especially if the huricane season gets bad.
	▲	WarmWash 7 hours ago \| parent \| prev [-]
		Because the US started this mess, and it would essentially shift all the cost onto other countries who had no part in it.

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downrightmike 7 hours ago | parent | prev [-]

The UK parliament thought it a good moral lesson Irish should starve because they were the wrong religion

	▲	oblio 7 hours ago \| parent [-]
		In modern times we have a special word for what they did, but I've noticed British people are <<extremely>> touchy when it's used.

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soperj 9 hours ago | parent | prev | next [-]

Why would any producer in the US sell it locally if they could get more by shipping it?

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Aspos 8 hours ago | parent [-]

The real question then is how quickly export ban can be implemented?

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soperj 7 hours ago | parent | next [-]

About as quickly as the Canadian Oil patch would be flooded with money. All that would do is push oil investments out of the country, and your surplus would become a deficit in the drop of a hat.

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daedrdev 8 hours ago | parent | prev | next [-]

Oil is not a single good. Different types of crude produce different products at various grades hence why diesel is so expensive in the US compared to something like natural gas

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361994752 8 hours ago | parent | prev | next [-]

Since oil companies will make good money from the price hike and exports, I guess they’ll lobby against an export ban?

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larkost 8 hours ago | parent | prev [-]

Why do you think Republicans would institute an export ban? Trump has been touting every export deal he can (especially promises to purchase petroleum), he has even been measuring import/export levels as if foreign countries are cheating the U.S. if they export more to the U.S. than they import from it.

I am not confident that the Democrats would even implement such a ban, as they get pretty big campaign donations from the oil industry as well.

	▲	XorNot 6 hours ago \| parent [-]
		It also wouldn't work. The US has refineries which can only run on various foreign import grades of oil. The US produces oil which goes to foreign refineries for the same reason. The effect of "banning exports" is non obvious. Conversely not starting a war with Iran had some really obvious benefits that every previous administration recognized.

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Retric 9 hours ago | parent | prev | next [-]

Global trade means domestic prices move even when you’re a next exporter of a commodity.

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pipodeclown 8 hours ago | parent | prev | next [-]

Demand is genrally destroyed in places where people can't afford the higher oil price which is most definately not the US. Poor countries are ehere people will suffer.

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sssilver 8 hours ago | parent | prev | next [-]

Can't the US producers sell oil outside of the United States, where it's more expensive, thus generating more profits for their shareholders, thus creating a shortage in the United States, thus dragging the prices up to the global equilibrium, thus dissipating any effects of the US producing more oil than it consumes?

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beloch 8 hours ago | parent | prev | next [-]

There absolutely can be a price shock that will make current prices look economical. Oil is priced on a global market, and if the price is high enough, that might mean many Americans are priced out of some of their own oil. The only way to decouple the domestic and international markets is export and price controls. One need only look to Canada's NEP of the 80's to understand how that's likely to turn out.

Also, the U.S. is currently prosecuting a trade war against Canada that has, thanks to Trump, become a question of sovereignty for Canadians. The U.S.'s largest source of foreign oil is, potentially, one outburst from Trump away from Canada placing export duties on oil. It has been discussed in Canada, and it's viewed as an extreme option, but an option nonetheless. Trump would have to say or do something truly outrageous for that to happen, but his ability to turn allies into enemies should not be underestimated.

Bottom line, fuel could become a lot more expensive, quickly. Even if there's still gasoline to be had, it still qualifies as a shortage if it becomes unaffordable. Fuel prices affect food production, delivery of goods to markets, and pretty much every aspect of the economy.

Oil tankers travel at about the speed of a bicyle. If a price shock does happen it will last for months. If the war with Iran is not resolved promptly, this is precisely what will happen.

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buildsjets 8 hours ago | parent | prev | next [-]

You claim there can't be a shortage, yet the rationing has already started.

https://www.newsweek.com/costco-starts-rationing-motor-oil-w...

	▲	instagib 8 hours ago \| parent [-]
		Alfano said. “Additional Group III production is being built in the U.S., but it won’t be ready until the end of next year.” Costco is the only one rationing right now.

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laweijfmvo 8 hours ago | parent | prev | next [-]

How about the “deal” with Venezuela? When will that impact anything, if ever?

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jcranmer 7 hours ago | parent | next [-]

Venezuelan oil production has declined by about half since Chavez took power. Given the losses they suffered from expropriation, the oil majors aren't particularly keen on returning to Venezuela without stronger guarantees, and oil executives aren't idiot--they understand that Trump is not a reliable partner and that there's a good chance that any deal he strikes with Venezuela will fail to be honored past 2028 (or possibly even before then).

There's also the fact that Venezuelan crude oil is basically among the worst grades of crude oil, the sort of stuff that the refineries don't want to use unless they have no other options. Which also means that as global oil demand hits its maximum (likely within decades), this is also going to be some of the first oil production to be permanently mothballed. With massive necessary investment to get anything running, subpar product, and a very uncertain political situation for the necessary long-term investment, most oil companies are reluctant to invest.

As a result, the only major oil company to have really been contemplating investing in Venezuela is Chevron (which itself appears to be mostly hedging its bets); Trump more recently announced another deal with a supposed major investment in an unnamed operator to extract oil from Venezuela, but without any companies being named, I'm skeptical of how real it is as opposed to merely being a vehicle for graft.

As AnimalMuppet says, if anything does get built, it's on the order of years before anything starts flowing.

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AnimalMuppet 8 hours ago | parent | prev [-]

I think I heard 3 years at a minimum (don't take that number as gospel, but the order of magnitude is roughly right as a best case). The issue is that Venezuela's oil infrastructure is basically trashed by decades of neglect and mismanagement. It's going to have to be rebuilt, which is billions of dollars and several years.

That's the best case. Worst case (for Venezuelan oil) is that the Republicans lose the House and Senate in November, then the new Congress starts investigating the Venezuela deal, and court cases start flying, and oil companies back out, and the date for the impact of the deal becomes "never".

	▲	huurtehoog 4 hours ago \| parent \| next [-]
		> I think I heard 3 years at a minimum (don't take that number as gospel, but the order of magnitude is roughly right as a best case). I appreciate the sentiment but order of magnitude is thrown around to the point of meaninglessness. What is the 'order of magnitude' of 3 years in this case? 1-9? How is 3 years roughly the same as 1 or 9 years? Same order of magnitude, off by a factor of 3 to 9, in years is not close enough I'm afraid.
	▲	orwin 7 hours ago \| parent \| prev [-]
		The issue is that they never expended the infrastructure, never exploited new fields, their old oil field started giving less, so they pumped more water in, which probably lowered the quality of oil, and made it harder on the refineries. Venezuela oil also need a lot of refinement in any case, and this is where the US made a mistake, because they could just have insisted on refining Venezualan oil rather than directly taking a cut, which will be seen worse by the locals. Basically help more venezualan crude oil to get out of the field than their refinment capacity can afford, and loan them tankers to sell the crude to US refineries. US corpos could have profited a lot more (and if the US could tax them, the US government could have taken a cut) than this weird, dumb and aggressive position of taking a cut.

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Boxxed 8 hours ago | parent | prev [-]

> It produces a lot lot more than it consumes anyway. There can't be a shortage.

Clearly you haven't been paying attention to oil and gas prices