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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (204629)	9/28/2006 6:03:49 PM
From: Ichy Smith	Read Replies (1) \| Respond to of 281500

If there is a nuclear war, and since Nuclear weapons will be available to the Shia in this decade, I am assuming that oil could become unreachable for the kind of uses we presently enjoy. I am also assuming a Democratic president who will withdraw support for the wars in Afghanistan and Iraq, a sign that will tell Islam that the US is afraid to fight. Since Islam is based as much on testosterone as anything else i think they will bring the war to the US, and our reaction to a nuclear attack will be just what islam is anticipating. If we devastate 30% of the production of oil, what do you expect it will do to the price?

To: Ilaine who wrote (204629)	9/29/2006 1:35:11 AM
From: Bilow	Read Replies (2) \| Respond to of 281500

Hi CobaltBlue; Re: "If OPEC tried to turn off the spigot to America but continued to export oil to our trading partners, we could buy it from them, as oil is fungible." You're simply wrong on this, and in more than just the misuse of the word "fungible". If it were always possible for a willing buyer of oil to obtain oil from a willing seller, then how could Iraq have been prevented from selling oil back before the invasion? Re: "If OPEC turns off the spigot to the entire world, and we die, they die from lack of income." The problem with your thinking is that you are unable to come up with anything more than two possible actions for OPEC. If OPEC were that stupid, sure, you'd be right. But OPEC has other alternatives. The simplest one is to offer to sell oil only to those countries that would be unwilling to then sell it to the United States. They have a history of doing similar sorts of things regarding doing business with companies that do business with Israel. Re: "... we can still produce enough oil for necessities, but not necessarily luxuries." Yes, I agree. The US is in no danger of being unable to bring in the crops. But it would be ugly and OPEC can pull it off while still exporting oil. Unless you can figure out a way of forcing, for example, China to resell oil to the US at reasonable prices. -- Carl

To: Ilaine who wrote (204629)	9/29/2006 1:10:26 PM
From: Maurice Winn	Respond to of 281500

That's my argument too. Poor people selling oil need the money a lot more than rich people need the oil. The rich would be better off without the oil as they are too fat and should walk. One could also argue that the consumer surplus involved in a sale means the buyer needs the product more than the seller needs the money, meaning the buyer gets more benefit than the seller does money. So, the buyers are less able to do without the sale than are the sellers. In the case of Iran, I think if push comes to shove, the USA is more likely to blockade Iran's exports than Iran is to cut them off themselves, though Iran would like to cut off the Straits of Hormuz to stop other people selling oil. On fungibility of oil, that's only partly true. Each refinery has a certain type of oil which they need to run the thing efficiently as they each have different markets with different technical needs. You can't use diesel instead of petrol or bitumen in place of lubricating oil. A cat cracker and desulphurisation plant have specific purposes and not just any old oil can be processed effectively. So, oil is only partly fungible. But it's fungible enough that your point is more or less true. But think what happens to the price. If Iran refuses to sell to the USA, the USA will just buy from somebody else, by bidding a bit more. Iran's customers will offer less money since their oil will be in surplus. Mqurice