Subject: Re: Control Panel: Black swan trend change?

The METAR for next week is unsettled and rather stormy but not a hurricane. Yet.

Price of gas doubled in late 73. Other things were happening at the same time. The 1974 model cars had a seatbelt interlock system that was so wildly unpopular that the reg was repealed by the spring of 74. Then there was the upheaval in DC.

Price of gas doubled again in 79, at the time of the Iranian revolution. At that time, Iran produced a lot more oil than it does now.

I don't recall the gas price fluctuations at the time of the Iraqi invasion of Kuwait, but there was a coincident recession.

Then there was the op in Iraq, twenty years ago, that took their production off line. Again, Iraqi production at that time was limited by UN sanctions, but we still remember $100bbl crude, iirc five times what the price was before the invasion, $4 gas, and media hysteria about "peak oil".

On this go around, only Saudi has an alternate route: via a pipeline to a port on the Red Sea, with a capacity of something like 5Mbpd. The others, Iran, southern Iraq, Kuwait, Qatar, Bahrain, and the UAE, are pretty much cut off from markets, and are shutting down production, because they have no more space to store oil. If the shooting stopped today, it could be weeks, or months, before production in those fields could be restored to pre-war levels.

Yes, the US is relatively self sufficient in oil now. Add to that the crude coming in from Canada, that has no other outlet to the rest of the world. The POTUS has also decreed that he, alone, decides who can buy Venezuelan oil, and the US has first dibs on every drop. But, you can probably bet that every drop the US controls, will be sold at the global price, rather than at a government controlled discount, domestically.

Steve