Matt Walsh says we’re wrong to ascribe our current sky-high gas prices to the Iran/Gulf business:
According to Goldman Sachs, the price difference between diesel and gasoline in the United States is now over $60 per barrel, when it was just $3 a barrel one year ago. So there’s much, much more money to be made by refining diesel right now. And because refineries are already operating at full capacity, any effort to refine more diesel means that less gasoline will be refined.
That’s why global exports of gasoline have dropped 24% in the past year. Everyone’s switching to diesel if they can swing it. From March to August of this year, diesel yields in the United States are well above their historical averages, while gasoline yields have been cut. Meanwhile, demand for gasoline hasn’t gone down. In fact, it’s gone up, especially in Russia, since many of their oil refineries have been blown up.
So if Ukraine agreed to stop bombing Russian refineries, and allowed the world’s number-two diesel exporter to get back to refining diesel, that would be great news for the American consumer — unequivocally.
Of course, they won’t — for the simple reason that Ukraine is involved in a life-and-death struggle with the Russians and every gallon of diesel they destroy means less fuel for the invaders. Hard to argue about that. But as Walsh suggests, it’s very definitely a part of the puzzle we face as we deal with the ridiculous cost of gasoline.
Walsh’s article is a long read, but very much worth the patience required. I hadn’t thought about all the linkages in the global petroleum industry, but I should have. The Iran thing is just one part of the issue.
I worked in a different but related industry (ethylene and polyethylene) and the word there, no not from fucking “experts”, but from people who actually made a living running the goddamn companies, is that the sweet spot is running at roughly 80 to 85% total capacity (as an industry, not any one particular company). That allows any individual company room to take scheduled outages and/or recover from equipment upsets and breakages. We even monitored competitors in order to properly schedule our outages and not overlap with the company down the street. That kept the overall infrastructure running at the correct levels.
Once you got over 85%, you need to start looking at either expansions of existing units and/or building new units. You needed to start planning at 86% because once the industry started running at 90+% capacity it was too motherfucking late. It takes roughly a decade to bring a new refinery to operating conditions. Yeah, there were world events and various upsets that could temporarily push the industry into the 90+% area, but we could adjust short term. Long term? No way that decades old equipment could be made to run at over 90% long term. Running at 98% is just not sustainable, it’s fucking crazy. And stupid.
Part of the big delay in building new units is a) uncertainty in the market, b) lack of capital for expansion, and c) excessive govt regulations. So let’s see, two fucking wars (Ukraine and Iran) lead to uncertainty, four years under Biden destroyed the economy when companies should have started building, and excessive govt regs are as constant as death and taxes.
I’m not gonna go all doom and gloom, but maybe it’s time to put away some dried beans, dried rice, cases of spam, and lots of ammo. Shits gonna get real and the worst of it is that all of this was avoidable. We should fucking hang every politician in DC just on general principal. The bureaucrats? Vlad the Impaler solution comes to mind.
Russia stopped diesel exports some time ago. Before the refinery hits.
There’s way more to it than that:
https://larrycjohnson.substack.com/p/heading-back-to-the-usa-where-diesel
Correct. And long before that the west decided to boycot any purchase of Russian fuel.
Walsh is acting like a Russian propagandist here, promoting the west helping Russia take over Ukraine and exterminating its population.
Both of those wars are wars of choice by the US. The Ukraine war would have been over in weeks had it not been for us funding the corrupt Zelenskyyyyyyyy, and Trump’s decision to attack Iran on behalf of Our Greatest Ally (who has now said, “Hey, let’s you and him fight while we watch) was the dumbest thing he’s ever done – even dumber than when he bought into the “Two weeks to stop the spread” bullshit.
I am so tired of seeing this kind of comment. This “War of Choice” What do you geniuses think would happen if Iran, instead of sending their first bomb towards Israel (or us), instead waited just another couple of months to have several mounted on their missiles, and as is an established practice, sent several missiles to various locations, including the centers of oil extraction/refining in neighboring countries, in addition to their prime targets (us and Isreal). Just imagine if Saudi Arabia, Oman, Iraq, and the UAE all had visitations from U-235 warheads, the gun-style bombs mounted on missiles. Don’t claim that they would be too heavy to put on their missiles, because a LOT of the weight is in shielding the warhead so that it can be safely handled. Iran would just have to make sure that their bottom-line missile techs are reassured that their deaths would truly be those of martyrs. Don’t forget, right about now is the earliest that Iran could have had enough U-235 to start making those bombs. So, just what do you think would happen to fuel prices and availability, along with world fertilizer production, if this were to happen?
Also, that “let’s you and him fight” line is bogus, as our own government has gotten Israel to back down from multiple strikes, according to reports.
WRT Ukraine, without assistance we could be assured that Russian troops would have been on the borders of Poland and the Baltics a year or more ago, where we WOULD be involved directly through NATO, and they would have the advantage of a relatively bloodless campaign, increasing defense production, a willing partner in Belarus, and a public that would not object in any way.
Two words for y’all….record profits.
Remember when there was an “egg shortage” and we were all getting ass fucked at the store for eggs?
This is the same thing only “oil” instead of “eggs”. >:-[
Lots of people ask what happened to “drill, baby, drill.” The short answer is that if Iran and their proxies Hezbollah, Hamas, and Houthis get stomped for the foreseeable future and Hormuz becomes free flowing again, oil supplies will go up and prices will come down. Looking at that possibility, Big Oil is not going to invest in drilling and more refining capacity if the price for oil is likely to drop way lower than where it is now.
They’re business people, not do-gooders, and are content to stand pat and enjoy their profits from the current supply and demand situation.
The US government does not want the flow of oil from the middle east to resume. They want it permanently stopped so they become the world’s prime supplier of crude and refined products.
Not that that will work short term as the lead time to building drilling rigs and refineries is measured in years. But yes, unless the demand is created the oil companies aren’t even going to bother applying for the permits, the environmental impact statements, preparing to fight the decade long lawsuits by nimbies and Soros backed “environmentalists”, and everyone else who thinks they can make a quick buck from a lawsuit.
I think this is more of a refinery capacity issue rather than an oil supply issue, but it gets rather complicated.
Gets complicated very fast. One reason I will not comment on this.
Beyond: we have been at war with Iran since 1979, Trump is the only president to willing do something about it.
Ukraine: Was invaded by Russia. Was under the Democrats at the start so any money spent there are on their heads. The Biden Cabal did nothing to address any of the underlying causes.
Russia will invade Estonia triggering NATO sometime yet this year. Probably in October as a lot of bad stuff happens in the 10th month.
We have not learned anything since 1973 about oil, energy, spikes and how to control them.
We do not have long, get your beans, band aids, and bullet stocks to the level you need. If for nothing else to be resupply for the hordes we have imported.