Resulting Oil costs

[calibuck]

Just curious, maybe someone can clear the fog from my eyes. OK, so we're at war with Iran. And gas prices go up. Even though USA is oil self-sufficient, how come does gas at the pump rise? Clearly what's already in the oil to gasoline pipelines was extracted at lower costs, (before this Iran thing), retailers are upping the prices. Anticipation of higher cost crude? Maybe, 'market prices'? Maybe, but seems more like the big oils are making a ton more money but raising gasoline prices (OF GAS IN THEIR HOLDING TANKS) before increased cost of crude hits the refineries. Recognize my econ degree was decades ago, but no one quesions, nor do we consumers balk at filling up at a buck or so more than the day before this war erupted.

 

[TDunk]

Now do toilet paper 6 years ago. People are easily scared and want to be ahead of the curve. Corps take advantage as best they can.

 

[Buckeneye]

Even though USA is oil self-sufficient

No, the US is not.

 

[DubCoffman62]

Just curious, maybe someone can clear the fog from my eyes. OK, so we're at war with Iran. And gas prices go up. Even though USA is oil self-sufficient, how come does gas at the pump rise? Clearly what's already in the oil to gasoline pipelines was extracted at lower costs, (before this Iran thing), retailers are upping the prices. Anticipation of higher cost crude? Maybe, 'market prices'? Maybe, but seems more like the big oils are making a ton more money but raising gasoline prices (OF GAS IN THEIR HOLDING TANKS) before increased cost of crude hits the refineries. Recognize my econ degree was decades ago, but no one quesions, nor do we consumers balk at filling up at a buck or so more than the day before this war erupted.

We have the most and the best crude in the world but we're sitting on it.

 

[CMic]

We important a lot of crude, although not much from the Middle East. We are an exporter of other petroleums, like gasoline.

 

[Thump]

We have the most and the best crude in the world but we're sitting on it.

Not a lot of refining capability because of red tape.

 

[wolves2002]

Refineries are also built or optimized for a specific type of crude oil. Switching from West Texas to Venezuelan oil, for example, is not simple.

 

[sparcboxbuck]

I mean, it’s pretty simple, right? If 20% of crude goes through the Straights and they can’t get it through, that’s 20% of total supply that is constrained. As a result, the rest of the market responds.

And fuck *ichigan.

 

[ORD_Buckeye]

Just curious, maybe someone can clear the fog from my eyes. OK, so we're at war with Iran. And gas prices go up. Even though USA is oil self-sufficient, how come does gas at the pump rise? Clearly what's already in the oil to gasoline pipelines was extracted at lower costs, (before this Iran thing), retailers are upping the prices. Anticipation of higher cost crude? Maybe, 'market prices'? Maybe, but seems more like the big oils are making a ton more money but raising gasoline prices (OF GAS IN THEIR HOLDING TANKS) before increased cost of crude hits the refineries. Recognize my econ degree was decades ago, but no one quesions, nor do we consumers balk at filling up at a buck or so more than the day before this war erupted.

Because oil is a global commodity. US based production will naturally rise to the global price. And that price shift will be somewhat sticky and not immediately come down when (if) the straight opens back up since Gulf states are being forced to shut down wells and refineries, and those don't come back on line at the flip of a switch.

 

[Trevi]

I believe that I also heard recently that at least for accounting purposes, gas stations charge at the pump based on the price to refill their tanks. A cash flow situation so they can afford the cost of refilling the tanks. And as noted above, the cost to refill is based on global oil prices.