Why do reserves deplete with 100% of the strait open?
If the strait were to suddenly fully open then reserves in (say) Singapore would continue to deplete until an oil ship or three reaches Singapore, which may take a while.
Show HN: I simulated closing the Strait of Hormuz on real oil trade data
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Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data
#82The biggest missing piece is China. Assuming actual delivered price is not subsidized by Western countries, you need to put in what if China demands that reflect the current price. Chinese in reality don't consume that much oil as what we thot they do from the oil purchases in the past. I assume Chinese just ramp down the purchase even though their consumption is well below that. Plus the hidden supplies from Iran an…
Someone shared a video on this above:
https://news.ycombinator.com/item?id=49043797
Another crucial element is land transport. The Gulf countries have developed a fleet of trucks to help offset some of the crude oil passing through the Strait.
Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data
#83Earlier quoted context omitted.
Venezuela and Iran are strategic targets to control China's supply of crude oil. That's pretty much it. USA can produce all the oil/energy it needs for itself. Everything else is about controlling the energy supply to adversaries.
As the parent comment explains, the US can't produce all the oil it needs, because it's refinery capacity isn't aligned with the type of oil it pumps from the ground.
I have seen a few slightly different figures but it is something like 40% of oil still needs to be imported to get the right mix for the current economic setup.
Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data
#84Earlier quoted context omitted.
Venezuela and Iran are strategic targets to control China's supply of crude oil. That's pretty much it. USA can produce all the oil/energy it needs for itself. Everything else is about controlling the energy supply to adversaries.
As the parent comment explains, the US can't produce all the oil it needs, because it's refinery capacity isn't aligned with the type of oil it pumps from the ground.
It can be if necessary. It’s just the US refineries can deal with the crappy oil produced by places like the tar sands in Canada, where few other countries currently can
Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data
#85Why do reserves deplete with 100% of the strait open?
If the strait were to suddenly fully open then reserves in (say) Singapore would continue to deplete until an oil ship or three reaches Singapore, which may take a while.
Also, reserves do not magically refill until their operators decide to pay to refill them, which competes with ordinary non-reserve demand.
Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data
#86Earlier quoted context omitted.
Not that the administration is trustworthy, but they recently announced that the structural floor is ~70M barrels. Which is significantly lower than other public estimates. Which strikes me as an attempt to ease the market that there is significantly more breathing room.
That seems a bit optimistic to me. I'm no expert, but a relevant and recent examination of the physical SPR facilities (published just last month) is available at https://www.gao.gov/assets/gao-26-106918.pdf
This is incredibly superficial, but that’s the most thoughtfully laid out and typeset official report I’ve read in ages.
Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data
#87Something seems to be wrong with the simulation: some countries run on reserves, and out of them, even with 100 % delivery.
OP blames "Market elasticity parameters" for that, but they should offer a reasonable reset, or shouldn't they even oversteer towards filling up tanks, not clearing them out of no supply shock is seen?
Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data
#88An interesting fact to consider is that the US stockpile (the Strategic Petroleum Reserve) is reported as the total of sour (high sulfur) and sweet (low sulfur) crude oil. The sweet stock makes up about 1/3 of the reserve and hardly varies at all. This is because US refineries are virtually all configured for sour crude: due to a mistaken belief in the 1990s that sweet crude was running out, the industry bet the farm…
I can't believe Joe Biden did that!
Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data
#89What concrete predictions does your model make? What developments in pricing/other would indicate that your model is wrong or incomplete? Nice website regardless, but I'm a bit skeptical that the dynamics of the global oil/energy market can be accurately predicted.
>What concrete predictions does your model make? Well, the model is less of a prediction and more of a stress testing tool. But under the hypothetical closure scenarios it shows the timing the oil reserves of distant countries exhaust, as well as the systemic effects on pricing (the France paradox). >What developments in pricing/other would indicate that your model is wrong or incomplete? The model has a stylized way…
Can you explain the France paradox?
Re: Show HN: I simulated closing the Strait of Hormuz on real oil trade data
#90Earlier quoted context omitted.
Random internet person says something that nobody is talking about. Gemini says random internet person is exaggerating the severity on most points. I guess I’ll wait and see if someone provides citations because this feels like a nothing burger.
We are talking about this, because we're discussing a model of oil price vs availability which includes modeling of national oil reserves. I'm pointing out that the popularly understood amount of US reserve levels somewhat overestimates the available cushion, and provided two different and easily verifiable reasons for considering it to be smaller than the headline number. I also specified that I was oversimplifying…
What you also provided was conjecture based on… oh right you didn’t provide what it’s based on. Citation needed.
What I meant with nobody talking about it was that outside of your post your bullet points aren’t being brought up in any reliable sources.