Why is Big Oil allowed to screw us every time there is a global crisis?

[King_Klonopin]

We are about 4 weeks into the conflict in Ukraine.
Big Oil, never missing an opportunity to raise the price of gas, has already seized
on this crisis as the bogus reason for jacking up the price at the pump -- as if the
supply of oil had been depleted in that short 4 week period.

How is this act of greed permitted?

Last week, in Massachusetts, I paid $3.59 per gallon.
Today, the price per gallon was $4.19 !!!!
That's nearly a 20% hike in one week.
It cost me $58 to put 14.5 gallons of gas in my truck.

Why is this robbery allowed???

Big Oil does this because they can; that's why!
Big Oil always takes advantage of any global crisis. This time they have truly outdone
themselves. And the fact that the sitting POTUS happens to be a Democrat . . . even better.
They will be the first to start the chorus of blaming Biden for the price hike.

According to Al Jazeera: 3/3/2022

"Oil prices have surged due to concerns about disruptions to global supply,
eight percent of which comes from Russian exports (emphasis mine),
leading traders to seek out alternative sources in an already tight market."

"The spiralling [sic] prices are a particular concern for the US, the world’s biggest oil consumer,
where inflation is already running at a four-decade high."

"How much oil does the US import from Russia? The US imports Russian oil, but it is not highly
dependent on the country for its supplies. In 2021, the US imported an average of 209,000 barrels
per day (bpd) of crude oil and 500,000 bpd of other petroleum products from Russia, according to
the American Fuel and Petrochemical Manufacturers (AFPM) trade association. This represented
three percent of US crude oil imports and one percent of the total crude oil processed by
US refineries. (emphasis mine)

By contrast, the US imported 61 percent of its crude oil from Canada, 10 percent from Mexico, and six
percent from Saudi Arabia in the same year."

Russia supplies 3% of our imported oil.
We placed sanctions on Russia and its oil one week ago.
The price of gas in the U.S. has gone up nearly 20% -- this is before the impact of the decrease
in Russian oil supply -- which is minor -- could have had an effect on supply here.


Dear Big Oil,
Explain to me this line of logic and mathematics, if you can.
Don't piss on my leg and tell me that it's raining.

[Irish_Dem]

1. Corrupt politicians?

[lapfog_1]

2. the pricing is anticipation of lack of supply

and the war only started 10 days ago (I know, it seems longer0.

plus there is this from an oil company engineer...

"America's usable stored capacity (not including Strategic Petroleum Reserve, or pipeline volumes which can't be removed without shutting down the pipeline) only amounts to 3-4 days of use. In fact the amount of gasoline in all the distribution tanks and gas stations in the USA on any given day is less than what it would take for everyone to top off their tanks at the same time."

https://www.quora.com/From-the-time-oil-is-pumped-out-of-the-ground-approximately-how-much-time-elapses-before-it-is-sold-at-a-gas-station

[King_Klonopin]

6. Putin started mobilizing troops around the borders about 4 weeks ago, give or take.

Anticipating a future lack of supply should effect commodity and stock prices.
It should not be realized at the pump until there is an actual supply deficit, which
may never come.

And even still, Russian oil accounts for 3% of our supply.

This is just a variant of war-profiteering, IMO.

[lapfog_1]

9. Russian exports account for eight percent of the global oil suppl

Oil is a commodity product and completely fungible.

Removing any source of supply anywhere will affect prices everywhere. I should say remove or add any source.

To keep the price of oil from affecting US markets you would need to be oil independent (supply all the oil you use) and band the export of any oil to others.

[JohnSJ]

31. Exactly. It is a global market. It is very sad that our supposed ally Saudi Arabia will not

increase production

Hopefully this will push us into alternative energy sources much quicker, and increase motivate the government for incentives to do so

[King_Klonopin]

46. 20% increase in one week ?!

[mitch96]

39. "lack of supply"... If we cut off russian oil and still have the same demand the price goes up

for that now limited supply. yes?
m

[RockRaven]

3. Buckle up... Ukraine usually grows 30% of the world's wheat and 20% of the world's corn...

Every food-related company in the country is going to exploit the shit out of that as an excuse to raise prices no matter how irrelevant to their actual products/costs.

[Deuxcents]

4. We give gas n oil tax subsidies and then state, local n fed taxes after that

I’m not liking the industry giving up the same logic some of those big bonuses could spare some participation by paying their fair share and give us some relief. I know..not gonna happen.

[dweller]

5. It's more like 2 weeks + going up

and 2 years before it ever comes down …

✌🏻

[msongs]

7. current gas is made from oil months ago at the lower price but we pay as if it

is from today's war profiteering price

[radius777]

8. Transition to green energy,

problem solved. This crisis more than anything shows us we need to (a) develop cheap green energy (b) detach completely from the rogue nations of the world (including China). Trade and interact only with non-autocratic countries.

[Hortensis]

28. So the "rogue" autocratic nations are forced to create an alliance

which is forced by the rest of the nations to be oppositional and remain so, without being allowed to benefit from the "good" nations? The "good" nations throw away all leverage they have over rogue ones to behave better.

Even if it doesn't control, we do normally have significant leverage that's been going serious good for many of the world's over 7B people...? Would we have the right to throw them away with it?

[radius777]

42. The rogue nations will rot and implode without the West.

Both China and Russia are heavily dependent upon the West. They would not have the economic and military power without our money.

Isolate and choke them out of existence until they come towards a less authoritarian position.

[Hortensis]

45. Ouch. The "It's really all the western nations' fault" belief frame,

itself an extention of the far-left's version of American Exceptionalism "Everything's really all the U.S.'s fault."

Seriously, besides all else that's required to support it, isn't that an incredibly insulting and Euro-U.S.-centric attitude? To imagine Russia and China would ("still" ) be comparatively primitive backwaters without the West's advanced input and that they'd collapse back to their natural states if we withdrew our critical but corrupting support?

Just can't buy in. I think I'm missing the basic wiring for reducing the rest of humanity, their real cultures and real histories erased, to hapless victims of my malign Western superiority. Besides, the Industrial Revolution and all the revolutions since can't be stuffed back in our old bottle. The whole planet's superior now.

Speaking of, I can't help remembering that China was a great, culturally advanced empire, the same for advanced civilizations in various other parts of the world while "the West" was still wrapping itself in animal skins and sleeping on dirt floors. (My own ancestors. According to my disappointing genetic evaluation, they probably pretty much stayed close to their Northern European hovels. )

[Ron Green]

10. Because we have built our world on cheap gas: transportation, land use,

recreation, and any other way we could extract and burn fossil fuel and externalize the true cost.

Americans suck at some things. Most things, actually.

[Spider Jerusalem]

11. Russia is the world's 2nd largest oil producer

turns out taking nine million barrels a day out of the global market has an effect on the price.

[alwaysinasnit]

13. FYI. In my neck of the woods, Sonoma County, CA, premium is going for $5.69/gallon.

Regular is about 20-30 cents less per gallon. I wouldn't be surprised to see $6/gallon sometime this year.

[DFW]

15. We haven't seen a price as low as $6 in over ten years

I paid $7.80 last week.

[alwaysinasnit]

16. Holy cow! I am going to quit complaining.

[DFW]

17. Over across the border in NL, it's even more

We‘re actually one of the cheaper places in the region to fill up.

[alwaysinasnit]

19. Sorry, I'm not familiar with the abbreviation NL.

[DFW]

20. Oops, sorry. It's second nature here

NL = Netherlands

Just like all states have a two letter abbreviation, here in the EU, the countries have their own standard abbreviations, though with some recent additions, some countries have three letter abbreviations.

Some of the more common ones:
GB. Great Britain
F. France
B. Belgium
BG. Bulgaria
D. Germany
DK. Denmark
CH. Switzerland
A. Austria
P. Portugal
PL. Poland

Etc.

[alwaysinasnit]

21. Thanks! I've learned several new things.

[DFW]

22. Most cars have a country sticker as well as their local license plates

Some countries accommodate popular spelling of their names. Hungary, for example, uses H, although in their own language, it starts with an M. Croatia, on the other hand uses a symbol from its own name (Hrvatska), preferring „HR“ to anything foreign. Finland uses SF to accommodate the Finnish name, Suomi, and the Swedish name, Finland. By themselves, S is for Sverige (Sweden), and F is for France. Swedish, though only spoken by a minority in Finland, is still recognized as an official language there. Switzerland uses CH, designating its Latin name, Confœderatio Helvetica, since it has four official languages, all with their own version of the country‘s name.

If you live here, you get used to it, like explaining why Arizona is not AR.

[alwaysinasnit]

23. Wow, quite a lot to learn for anyone who emigrates to the EU. Thank you so much for sharing

your knowledge with an armchair traveler like me.

[DFW]

24. I married one of the friendlier natives

That, plus a job that takes me to a different country practically every day of the week, leads to a lot of things being routine for me that might not come across as such if you don‘t spend a lot of time here.

[alwaysinasnit]

25. It sounds like you have a very interesting life and happy family. I wish you and your family

well. I do appreciate you and others in the DU community who take the time to share their knowledge and slices of their experiences with the rest of us who don't get out much anymore. (That last is mostly due to the pandemic situation.)

[DFW]

26. Thanks for that

We do tend to travel a lot. None less than the legendary Stan Lee once referred to my family as „your fabulous females,“ and I can‘t say that I have ever found fault with his assessment.

[alwaysinasnit]

27. ...

[Boomerproud]

36. DFW is one of the best.

His life and posts are always educational.

[alwaysinasnit]

40. +1000

[PSPS]

18. Oh, boo hoo

Oil is a commodity. The supply will decrease for everyone, not just the US. What would you prefer? Keep funding putin to save you $5? Everyone else, including in Europe where the effect will be much harsher, seems to find it more than worthwhile.

Link to tweet

[Scrivener7]

32. You know I totally agree with you that the higher prices are worth it. But the OP

has a point. The war is not 4 weeks old, it's 10 days old. Way too early for the oil companies to be feeling any pinch from it.

I will pay whatever comes and, keeping your image in mind, I will do it happily. I also think gas prices here should be much higher at the pump, rather than us subsidizing oil companies through our taxes so we don't notice how expensive gas actually is to our society.

But those subsidies are firmly in place, and I'll guarantee right now that when this is all over, the oil companies will post high profits.

They are crooks, but they are crooks that we will have to deal with in order to cut off Russians and in a small way help Ukrainians. So we will pay more. I understand that and will happily do that. But at the same time, I know what they are doing.

[King_Klonopin]

47. You completely missed the point:

An increase of 20% in one week is indefensible war-profiteering,
which is nothing new under the sun for Big Oil greedheads.

Putin is the convenient excuse they are using.

And a full tank costs $12 more = $48/month = $536/year.

[Hortensis]

29. Plus, it's winter. That means more need for petroleum, including for the children

sleeping warm and comfy in PSPS's picture. Some nations were scrambling for energy to get their populations through due to national and planetary shortages, most of it from effects of the global pandemic.

Just another factor, but a much bigger one than commuter costs because without energy people die.

[Emile]

30. Predatory Capitalism is making up for losses during covid pandemic.

[phylny]

33. This is one of the reasons I

just ordered a hybrid vehicle. Here in my family, it’s heresy as my spouse used to work for Big Oil.

Well, not really heresy. He’s glad about it, too.

[Scrivener7]

34. I am so relieved right now that I have one.

[Blues Heron]

35. In capitalism, the seller sets the price

Bristol Meyer squibb can charge whatever they want for pills, and big oil can charge whatever they want too. Anybody can charge whatever they want for anything. I could try and sell my old bicycle for a million dollars if I want.

[Dial H For Hero]

37. Quite so. The worth of any item is by definition the price someone is willing to pay.

[spanone]

38. Last year is was a Texas crisis. Ice, snow and bullshit. Prices went up, never came down.

[ProfessorGAC]

44. They Came Down Here

After the Texas FUBAR, prices rose in March & April to three sixty-something. They fell in May, then a lot in June.
By October, the price was about 4¢ higher than the February price. It took off again in December because the Saudis reneged on their promise to increase production & the traders freaked out.
My biggest complaint about threads like this are the misplaced blame.
It's the traders that are responsible for every overreaction, and the market being set up for current spot price AND futures to be subject to those "analyses" makes pricing over complicated.
Finally, the fundamental economic failure was in allowing refined product to be market commoditized. It completely eliminated any incentive for a refiner to compete by price. Everybody gets what everybody gets. Market share is strictly a function of marketing & distribution. Being cheaper for equivalent quality is a non-factor.
Typical free marketeer shortsightedness.

[lame54]

41. Because WE don't have the fortitude to...

Consume less and screw them back

[manicdem]

43. Net exporter?

I thought the US was self-sufficient when it comes to oil, that we started exporting more oil than we take in? If so then why does the US gas price increase?