Replies to post #130202 on Savvy Trades and Investments

[berniel]

They'll turn the flowline valve, wheel to the right, no need to cap. Just shut off the flow.

[gilead23]

I hope that’s right about this week.

the direct impacts are still marginal at the moment and more confined to price in modern economies because we are burning through oil inventory. Math requires that run out eventually wiley coyote style.

A lack of oil is different than expensive oil. it means a direct mandatory reduction in economic activity.

I’m not sure the “see? no worries” crowd recognizes this. Market is up != no problem. The market did not realize the gravity of covid for some time. 

I also question the idea that oil storage is going to bring Iran to their knees. 

There are 2 assertions in play here. 

1. Iran is a country of Islamic zealots so extreme and indifferent to consequences that they will nuke us and the entire world the second they have a nuke knowing full well their entire country would be a radioactive glass parking lot in an hour

2. If we just wait them out a mere loss of oil revenue will make them capitulate.

It does not take a Rhodes Scholar to recognize both of these can’t be true.

[researcher59]

Crude Oil +4 to 100, as Iran takes desperate measures to store oil -

WSJ -

Iran’s oil tanks are filling up as the U.S. blockade of its ports is preventing its shipments from reaching customers and empty tankers from loading up. To avoid shutting down some of its production, Iran is already storing oil on floating tankers. But now the Islamic Republic, which is dependent on oil exports for the bulk of its revenue, is resorting to previously unused methods to conserve storage space, say current and former Iran officials.

The regime is using containers and “junk storage”—disused tanks in poor condition—in the southern oil hubs of Ahvaz and Asaluyeh, the officials say. Iran is also trying to send oil by rail to China, said Hamid Hosseini, spokesman for Iran’s oil exporting union.

Most exporters typically shun rail exports as they are much less profitable and efficient than seaborne transport.