Post #10326 by Mark on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤

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I think the operative word is "world". The US, though large as both extractor and consumer of oil products, is still just one (large) cog in a gigantic machine. Other than local fuel taxes, I think it's fair to say most of the drivers of oil and pump prices in the US originate outside the US.

The price of almost every commodity is "levelized" across the world. In general the price automatically equalizes (not really "equal" but a close enough approximation) based on location plus shipping cost (plus the usual political and other regulatory costs of course). It couldn't be any other way, because otherwise, if a commodity is cheap (with all the above costs taken into account) in one place, and expensive in another place, arbitrage would take place because money can be made.

(Obviously it isn't as simple as that all the time because the political costs are not always obvious or calculable, for example look at the market for clandestine Russian oil at the moment.)

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