measurablefuncSlovenia becomes first EU country to introduce fuel rationing
Scanning some of the early comments here, and acting as-if the oil and LNG disruptions is just a question of renewable investment is naive.
This is the worst energy crisis in modern history, and little of the western world has really started feeling the effects yet:
https://thedispatch.com/newsletter/dispatch-energy/iran-war-...
Petro is pretty much upstream of everything: plastics, fertilizers, pharmaceuticals, cooking oils, lubricants, cosmetics. Dow chemical just doubled the cost of polyethylene as of April 1st. Taiwan relies on LNG for 40% of its energy production and has 11 days of LNG storage--meaning it may have to consider limiting industrial electricity use if things persist. I will clarify based on a reply, this doesn't mean they'll run out in that time, but that they have limited runway that will have deleterious effects as time goes on:
> Yeh Tsung-kuang, a professor in the Department of Engineering and System Science at National Tsing Hua University, said Taiwan's maximum LNG inventory is only 11 days but that does not mean the island will run out of fuel or face outages within that time period.
Even if the Strait saw normal traffic today (and Iran is incentivized and well-positioned to keep it closed for a while), it would take quite a while to recover lost supply. Iran continues to employ a tit-for-tat strategy and Israel just targeted steel industry in the country -- I'm not even taking into account more deliberate damage to energy infrastructure in the Mid east.
This is a scary crisis wherein the most movable actor (the US) is not going to accept Iran's terms. It could collapse the global economy, and that crucially includes the AI industry this forum loves to focus on almost exclusively. The US and the majority of the west has essentially no fiscal room compared to the comparably lesser 1970s crises either. This could easily spiral out of control and cause a level of suffering across the world (esp the global south) most of us on this forum have not lived to see.
Before calling it "the worst", I'd like more detail on how to do the comparison with the oil crises of the 1970's. My guess is that modern economies might be somewhat less oil-dependent than they were then, because the alternatives are more developed.
They are more developed, sure, and the US (from a US centric view) is producing a lot of oil now. However, consider that pretty much all of the goods you see in the supermarket got there via diesel (trains, semi-trucks). The percentage of semi-trucks operating on electricity is still miniscule at this point. Air transport? All petroleum. Consider also other things like fertilizers - we're heavily dependent on nitrogen fertilizers derived from petroleum and planting season in the northern hemisphere is starting right about now. Yes we're producing a lot more electricity with renewables, but demand is also up.
Oil going through Hormuz is 20%, not 80% of global supply. It's true that demand is pretty inelastic, but it's not like it can't be cut at all.
Who mentioned 80%?
During the 1973–74 Arab oil embargo, the disruption removed approximately 4.5 million barrels per day (mb/d) from the market, which constituted about
7% of the global oil supply at the time. This disruption significantly impacted global supplies.
20% is a lot more than 7%. This could be worse than 1973-74.
As a 10year-old in 1973 I remember spending a lot of time in the backseat of the station wagon as we were waiting line line for gas.
For context, during the first COVID spring (March-June 2020) oil demand fell by 20%. Because nobody was driving or flying anywhere. That's what it took to cut 20%.
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Yeah, and that's why gas prices in the US have not changed at all in the past month!