Originally Posted by
LonesomeSky
There are reasons to be more optimistic. The price of oil is already down off its highs. There are several reasons to believe oil might not spike any higher. First off, OPEC countries always cheat and export more than their stated quotas when prices are high. They can't resist. Second, Russian oil will find its way onto the world market, via China or some other route, that's just the way these things work. And third, the United States has excess capacity. US fracking operators took a huge hit during COVID and hundreds of wells were shut down. US fracking is a price stabilizing force but it lags because it takes a long time to spool up operations.
Yes it's a global commodity, there's always excess capacity, and there's always even more capacity that's not economically viable at $50/bbl. The market will accomodate demand.
Might take weeks or many months to spool up enough to make a big difference. If it drags out, addition capacity can be explored and developed within a couple years... big oil knows where those reserves are, knows the price-point, and has a plan.
Also, again, global commodity. With high prices RU can sell oil at a discount (still well above normal levels) to PRC and various other axis powers... they will naturally buy, for the discount if not to show solidarity among rogue nations. That means they're buying less on the open market, which will free up supply for the rest of the world. RU is going to need the money, so I'm sure they'll find a way to sell to somebody.