Can Russia put the US on an oil diet if things heat up?

allenwrench · Intermediate Crude Joined: Apr 23, 2008 Posts: 893

Can Russia put the US on an oil diet if things heat up?

If so, how would it affect us?

dissident · Heavy Crude Joined: Apr 08, 2006 Posts: 466

MrBean · Light Sweet Crude Joined: Sep 26, 2004 Posts: 1292

Yes it can. Russia exports over 20% of total net exports of oil. Reduction of the world oil market by a fifth would mean quite a diet - not just in Europe, but everywhere.

Strategically thinking, sooner or later only big producing countries can keep their jets flying and tanks rolling (for some time) - while rest of the pack evolves back to 19th century military technology.

EnergyUnlimited · Fusion Joined: May 15, 2006 Posts: 3391

GeneralGreen

TheDude

The 70s shocks were made worse by panic as well, and countries/companies scrambling to allocate shipments on various basis. Very messy, BP were very severely grilled by the British PM for not allocating more to the UK in '73, for instance. BAU must prevail, though, and I don't see Pute whipping out the oil weapon quite yet, his goals are further ranging than that and an embargo would really upset the apple cart.

The US will shift its sources soon enough owing to Mexican decline, which will give you your geopolitical shakeup in due order. We could attempt to cajole the Saudis for more - this summer was illustrative of how difficult that is, and with the scion of the biggest Saudi suckup on the planet at the helm, too.
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Dreamtwister · Fission Joined: Feb 06, 2006 Posts: 2296

Yes, but only indirectly.

If Russia reduces it's exports, it's clients (mostly Europe, I believe) are forced to seek supply elsewhere. That means more competition and by extension, higher prices.
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dissident · Heavy Crude Joined: Apr 08, 2006 Posts: 466

Don't forget about the third world. The first world can still get the volumes it needs with a relatively minor price increase. Since they do not have deep pockets the third world cannot compete for oil with the first world so there will be no major price spiral. At this stage, if Russia took its exports of 7 million barrels per day off the market it would do much more damage to the third world than to the US.

Russian forces didn't seize any of the oil transhipment infrastructure in Georgia (BTC, Batumi) and they could easily have done this, so there is no interest in choking off the west. It is the west's paranoia that sees this threat materializing at any moment. The west should wake up and realize it is going to be severely oil deprived WITHOUT any political factors by 2030. In the short term the rest of the world will be taking the hit.

allenwrench · Intermediate Crude Joined: Apr 23, 2008 Posts: 893

DomusAlbion

Russia could put the world on a diet by withholding oil and thereby cause the US to suffer through higher prices as Europe and especially Asia will pay whatever they need to.
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MOCKBA · Heavy Crude Joined: Sep 05, 2005 Posts: 469

EnergyUnlimited · Fusion Joined: May 15, 2006 Posts: 3391

GeneralGreen

dissident · Heavy Crude Joined: Apr 08, 2006 Posts: 466

I do not think the effectively available supply is tight enough for two million pbd to matter. The 3rd world consumes over 20% of the world oil production (I am not counting advanced developing states) so there is over 16 million bpd up for relatively easy grabs. As you say the third world can live on less, so a two million bpd reduction is not a challenge.