Actually I was listening to this thing this morning that said the strait isn’t that important anymore. Producers are routing around it, oil consumption has been reducing for years but we didnt notice because china was buying the surplus.
Whomever told you that has no idea what they are talking about.
It was on ABC news daily podcast. One of the most reputable journalism brands in Australia.
It is pure propaganda. If Hormuz did not matter then the US would have never accepted a ceasefire.
LOL. The Trump administration’s behavior is not indicative of anything other than Trump’s ego.
The Australian broadcaster has always been fairly critical of Trump. I’m not sure what the purpose of propaganda would be in this case.
Here’s the relevant part of the transcript:
Laura Tingle: Right. So to say I point to it, I point to the International Energy Agency, which put out a really interesting paper last week about all of this. And essentially it was pointing out that there was a bit of a glut in oil in the immediate period preceding the outbreak of war. Now, a lot of that was absorbed by China, which was really building up its reserves. And we knew when the war started, its reserves were much more substantial. But despite that, you were already seeing this sort of softening of the influence of OPEC and just this glut because the world was starting to move to more renewables and other forms of energy.
Sam Hawley: Yeah, so before the war began, oil supply had been running well ahead of demand and China had been buying a heap of it and putting it into storage. And it was a huge amount, right? Like 1.4 billion barrels it had put aside. But how did that help the rest of us?
Laura Tingle: Well, a couple of things that are worth noting. Not only did it have big reserves, but China had sort of quietly become the world’s biggest refiner of oil at the beginning of this year. So it actually has this really pivotal role in the supply of refined oil products. And one of the things that it did immediately, which you can do when you run a control economy, is it just slashed purchases of crude oil from the Gulf by 40 percent. And that’s 4.6 million barrels a day, which is really quite staggering. And so since it is such a dominant purchaser of oil from the Middle East, that really took a lot of the pressure off. So it’s been a really fascinating picture that’s gradually been revealed about that. That was one of the really key underlying reasons why things weren’t as bad as everybody else went round scrambling for oil wherever they could find it to replace this 20 percent cut in supply coming out of the Gulf in the first months of the war.
The episode and transcript is here:
Your article is saying that China had large gas and oil reserves which lasted them a while during the war, but is now running out.
Actually it doesn’t say China’s oil reserve “is running out”.
More broadly, global reserves including China were as high as they have ever been in February, and yes those reserves have reduced during the crisis. However, in the interceding months other oil producers and refineries have increased production and some have commenced exporting. As in, the network is routing around the strait.
The podcast I shared references this report from the international energy agency:
Yes, prices will be best if the strait is open, but it being “closed” is not as catastrophic as once thought.
In practice, the declines in demand have been much lower than the major losses of oil flows come through the Strait. Three other adjustments and responses have been crucial. First, there were large releases from stocks as oil prices incentivised market participants to draw down inventories at record rates, and the IEA’s largest ever release of emergency stocks brought additional barrels to market.
Can you like, not read?
It was on ABC news daily podcast. One of the most reputable journalism brands in Australia.
Makes sense to me, its why America which is so oil dependant is affected so much. This is why the US media and politicians care so much about this. It also keeps the issue focused on pricing instead of murdering brown people or supporting genocide.
On the supply side the US isn’t much affected, it can supply it’s own, the US producers have sensibly been taking the opportunity to sell into the global market to get better prices, which is to be expected.
Prices for US consumers are low comparatively. Many countries have low or zero production are dependent and have been lax about moving off, no matter a supply shock every few years having thier political leaders run around like headless chickens. My country, Australia, is one of them.
Ethiopia banned the sale of new ICE vehicles a couple years ago for example.
No America isnt so affected cause we are taking something like 49% of what Venezuela produces and not paying for it.
On top of local production from fracking.The rest of the world and especially Asia has been hurt by their local production point being closed and their are other materials as well that aren’t moving.
People just dont know what they dont know and there is so much noise out there its practically impossible to have a real scope of it all.
I really wish you were right friend
The price for oil has returned to what it was.
The price for speculation oil that is. Because investors with inside knowledge dumped it right before the “ceasefire”.
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