With rising oil prices, if countries decided to curtail their consumption - akin to a directed economy - to reduce purchases to a minimum and even refusing to buy above a certain value, what could that cause?
The first reaction I’d expect would be production cuts to hold the prices but, technically, those are already happening. Demand is just not following.
Oil is so deeply integrated into the food supply that millions would starve. Fertilizers are made from oil. Diesel powers the tractors that work the farms and the trains and trucks that bring the produce to consumers.
Diesel trains ??
Edit well shit, my bad, there are indeed trains that run on diesel
An interesting thing about diesel trains is that almost without exception the diesel engine is actually used to power generators rather than drive the wheels directly; the drivetrain (ahaha) is actually electric. Partially this is to reduce the number of moving parts, but it’s mostly because of the insane traction of electric motors.
One correction: torque, not traction. Traction is friction, torque is applied twisting.
Aha, that makes plenty of sense. Thanks for the lesson
don’t most trains run on desil or desil like fluids?
I have to admit my ignorance, I thought today’s trains were all electric
They basically work using a diesel generator hooked up to an electric motor. https://en.wikipedia.org/wiki/Diesel–electric_powertrain
they are, the desil produces the electricity.
No money no oil
Riots and economic collapse. Gas gets food to grocery stores, and it gets people to work to be able to afford groceries. If they can’t do that, violence will be imminent. The transition to electric is a generational project.
It would never happen. The number of oil-buying countries far outnumbers the number of oil-selling countries. Eventually, one buyer will submit to temptation and buy too early, causing everyone else to hurry up and try to get theirs while the getting is good.
If it did succeed, oil-sellers would probably just refuse to sell because they’re not making money, so why should they? They’re not the ones who need money; you’re the ones who need oil.
Yup, prisoners dilemma style.
In the meantime, you’d really piss off everyone in your country depending how long and how fast you go through reserves. Some regions would obviously fare better or worse than others, but it wouldn’t last that long for almost anyone
Gas prices would go through the roof as supplies dwindled. The oil producers can hold out much, much longer than the buyers.
They would have power outages, followed by demonstrations ending in riots and end up paying the higher price anyway.
Unless they have a way to mitigate it, they don’t get oil and international demand drops.
The only large oil consumer who is acting this strategically is China. They’ve been buying dips and building out massive strategic reserves. The Iran War oil crisis would have been a lot worse if China didn’t reduce its consumption significantly.
what could that cause?
As for impacts to the local populace, you don’t need to imagine a theoretical outcome. You can see live versions of it to different degrees happening in several place in the world:
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The least extreme is the USA where small businesses that depend heavily on fuel are simply stopping work because they would lose money operating with the current prices of fuel. Elsewhere costs of everything delivered by truck or rail (both run on diesel) continue to rise as the transportation costs increase. If this price keeps up, its going to get particularly bad this winter as much of the northern states still rely heavily on heating oil for heating, which base petroleum is chemically identical to diesel and thus facing the same fuel cost increases. Apparently with the current cost of heating oil an average winter heating bill would be $30/day.
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A moderately worse version is Russia which is experiencing fuel shortages because of its invasion of Ukraine. There are long queues for fuel in many parts of the country, and ration limits have also be introduced in some places.
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The most extreme version would be Cuba where the USA (is being stupid) and blockading the import of oil to the nation causing widespread power outages, etc.
As for the causes on world oil prices, unless the countries would represent a notably large share of the petroleum consuming countries, it would have almost no impact on oil prices globally. All countries capable of producing, refining, and delivering oil right now are running at max capacity.
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Oil producers wouldn’t care. They artificially restrict supply all the time to keep prices where they want them.
To quote Jimmy Hoffa, (who will certainly show up alive and well any day now): “If you have it, a truck brought it”
…and trucks need fuel.
In other words, anything have, that was not made from scratch by you or your neighbor, had oil as an input somewhere in the supply chain.
Now, imagine that people are no l9nger able to get what they need/want. That’s how regicide was invented.
This is actually a pretty good rundown of how the world works.
Isn’t that what some countries, like Belgium and Luxemburg, are already doing?
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