Comments
Hacker News
btw this website tracks actual ships passing though (vs not)
click on YTD for the shock of what's coming by the end of this year
100+ per day vs 5-10 per day, you can see the tiny cease-fire and when it ended
* https://en.macromicro.me/charts/94482/imf-strait-of-hormuz-n...
* https://i.imgur.com/fDmbaPa.png
oh and Strategic Oil Reserve is about to bottom out to the point where any lower brings permanent damage, imagine this going on through 2029 because you cannot "bomb your way to peace"
by ck2
Nice that you allowed readers to customize the parameters! I personally thought the demand demand elasticity was too low and I was able to adjust it.
by kccqzy
The 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 and Russia to China via land route.
by Haven880
Maybe I missed it looking over the paper, or maybe they are implicit, but are you taking into account Saudi Arabia’s East-West Crude Oil Pipeline (Petroline) , I believe it does about ~7m bpd and Habshan-Fujairah (Abu Dhabi Crude Oil Pipeline / ADCOP) about ~1.5m bpd? If not you might be underestimating things, though they do take a bit of a warmup to get into capacity, and can't match completely Hormuz's flow.
by molticrystal
Very interesting. Here in India people were very concerned about potential cooking gas shortages (LPG) when the disruptions began which is also a good example of usually-overlooked dependencies on the the Strait
by firasd
What 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.
Tangentially related but just watched this pretty interesting youtube mini-doc-thing about the recent moves China has been making regarding oil (and its bigger picture): https://www.youtube.com/watch?v=BkA0bkb6ZO0
by neom
An 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 on sour crude refining, and if sour crude runs low, it's extremely economical to switch.
As a result, almost all the draw from the SPR is of sour crude (currently ~5 million barrels/week). However, you can't just use up all the reserve because as levels get lower brine must be pumped into the storage chambers to retain pumping pressure, and the more brine that is pumped, the more the output quality declines.
The weekly reports indicate a total in the SPR of about 300mbb, of which ~100 are sweet and 200 sour. But for the reasons above, output becomes unusable one the sour levels fall to ~140-150mbb, at which point there is almost certainly a severe diesel supply shock. At current drawdown rates, that would be sometime around October/November, right in the middle of harvest season when demand for diesel is highest.
There's more complexity to this than I want to type out in a HN comment, but not that much more. Draw your own conclusions.
by anigbrowl
Join the discussion
Write your take first — we'll ask for email only when you're ready to publish.
- Hacker News
- btw this website tracks actual ships passing though (vs not)
click on YTD for the shock of what's coming by the end of this year
100+ per day vs 5-10 per day, you can see the tiny cease-fire and when it ended
* https://en.macromicro.me/charts/94482/imf-strait-of-hormuz-n...
* https://i.imgur.com/fDmbaPa.png
oh and Strategic Oil Reserve is about to bottom out to the point where any lower brings permanent damage, imagine this going on through 2029 because you cannot "bomb your way to peace"
by ck2 - Nice that you allowed readers to customize the parameters! I personally thought the demand demand elasticity was too low and I was able to adjust it.by kccqzy
- The 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 and Russia to China via land route.by Haven880
- Maybe I missed it looking over the paper, or maybe they are implicit, but are you taking into account Saudi Arabia’s East-West Crude Oil Pipeline (Petroline) , I believe it does about ~7m bpd and Habshan-Fujairah (Abu Dhabi Crude Oil Pipeline / ADCOP) about ~1.5m bpd? If not you might be underestimating things, though they do take a bit of a warmup to get into capacity, and can't match completely Hormuz's flow.by molticrystal
- Very interesting. Here in India people were very concerned about potential cooking gas shortages (LPG) when the disruptions began which is also a good example of usually-overlooked dependencies on the the Straitby firasd
- What 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.
- Tangentially related but just watched this pretty interesting youtube mini-doc-thing about the recent moves China has been making regarding oil (and its bigger picture): https://www.youtube.com/watch?v=BkA0bkb6ZO0by neom
- An 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 on sour crude refining, and if sour crude runs low, it's extremely economical to switch.
As a result, almost all the draw from the SPR is of sour crude (currently ~5 million barrels/week). However, you can't just use up all the reserve because as levels get lower brine must be pumped into the storage chambers to retain pumping pressure, and the more brine that is pumped, the more the output quality declines.
The weekly reports indicate a total in the SPR of about 300mbb, of which ~100 are sweet and 200 sour. But for the reasons above, output becomes unusable one the sour levels fall to ~140-150mbb, at which point there is almost certainly a severe diesel supply shock. At current drawdown rates, that would be sometime around October/November, right in the middle of harvest season when demand for diesel is highest.
There's more complexity to this than I want to type out in a HN comment, but not that much more. Draw your own conclusions.
by anigbrowl