2019 Jun 25, 1:44pm
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Trump just made clear the days of America protecting global shipping – particularly of oil shipping in the Middle East – are over. There is an easy argument to be made that the United States’ shale revolution will make the United States a net exporter of crude oil in the current calendar year, but to understand just how critical that is for the Americans we must first pick apart just how horrible that is for everyone else.After World War II the Americans created a global Order – a mix of security and trade guarantees which they used as a bribe to induce others to join their side in the Cold War against the Soviet Union. With global security now a thing, oil could be shipped safely and at volume without military escort, meaning that countries that didn’t have a military capable of escorting could now access fossil fuels. BAM! Civilization goes global. Remove the Order, remove global oil markets, and civilization itself goes into screaming reverse in any location that lacks either the ability to produce oil locally, or the ability to venture forth and secure someone else’s.Between oil’s criticality to and ubiquitousness in modern life, oil is by far the most commonly traded product on Earth comprising some 18% of all maritime shipping traffic (by volume). About a third of all waterborne crude and product shipments originate in the Persian Gulf.At the end of World War II every nation of consequence aside from the United Kingdom had lost its navy. The United States in essence inherited the global ocean. America’s creation of the Order gave everyone aside from the Soviets a vested economic interest in not floating a new one. Fast forward to today and the American Navy is over ten times as powerful as the combined blue water fleets of every other country combined. Putting that force disconnect at the service of the global commons is what makes the Order work, and what makes global energy shipments and markets possible.Pre-Order, merchant shipping used small, fast vessels because they needed to be able to scatter and hopefully outrun predators whether those predators wore eyepatches or naval uniforms. The Order ended such predation under the watchful eye of the U.S. Navy. The world’s second- through sixth-most powerful navies in terms of long-range power projection are (roughly in order) Japan, the United Kingdom, France, China, and Russia. Of these only Russia need not sail forth for oil, as it has plenty of its own. France and the United Kingdom can secure what they need from the North Sea and North and West Africa. China has only 30 combat-capable surface ships of size that can effectively operate over 1000 miles from shore; unfortunately (for the Chinese) Southern China is a cool 5800 or so miles distant from the Persian Gulf. Only India – keeper of the world’s seventh-strongest navy – is even remotely proximate. End result? Today’s oil markets comprise the greatest concentration of risk in the most critical economic sector at the most vulnerable part of the global system and no one can do anything about it if the Americans leave.
Time for Germoney to start building a fleet!
And yet that oil has at times been discounted as much as $20 a barrel compared to world oil prices because New Mexico doesn’t have the infrastructure to move all of it."
“The 32 mid-size U.S. exploration companies included in this review reported nearly $1 billion in negative cash flows through September.”
Nah, they would rather have Putin's dick up their ass, thankyouverymuch.
Annnnd, here come the imperialists crying for us to police the world.
Or just pay the French to expand their's
They'll just surrender anyway.
But a HEYYOU comment would not be complete if it weren't full of holes like the ones I just pointed out, eh?
I noticed it said "fracking industry" not "Exploration companies".
Here's one you can punch holes in. Republicans are on handouts & subsidies paid for by successful hard working Republicans' taxes.