An awful lot of production capacity has to be sweep out of the North American market (production is actually still going UP!!!).
A lot of small to mid-size operating companies will need to go bankrupt...they're the ones keeping production volumes high. They need the cash to cover interest on the bank notes taken out to drill and frack those wells.
The other wildcard is how quickly Iran can ramp up production. That might be 5-7 years given that their technology base is circa 1979 and will need to be upgraded. But it might happen in as little as 2 years...which would continue to dump crude oil on the world markets.
If Congress would repeal the Carter-era export ban on crude oil, that would go a long way towards re-balancing the North American markets, but that seems to be a low-probability event.
So it could take a while, but eventually it will...it ALWAYS does!
If Congress would repeal the Carter-era export ban on crude oil, that would go a long way towards re-balancing the North American markets, but that seems to be a low-probability event.
Once the tanks are all full, options for producers will include going bankrupt, smuggling, and... oh, yeah, dumping $100k's on lobbying Congress. I anticipate option 3, even though the warming goons and refiners (bedfellows...) will probably fight it tooth and nail.
That's the problem with oil and gold. No dividends. So you sit on it for a couple of years, earning nothing. Still, oil is a finite resource and is very sensitive to world events, war, etc.
An awful lot of production capacity has to be sweep out of the North American market (production is actually still going UP!!!).
A lot of small to mid-size operating companies will need to go bankrupt...they're the ones keeping production volumes high. They need the cash to cover interest on the bank notes taken out to drill and frack those wells.
The other wildcard is how quickly Iran can ramp up production. That might be 5-7 years given that their technology base is circa 1979 and will need to be upgraded. But it might happen in as little as 2 years...which would continue to dump crude oil on the world markets.
If Congress would repeal the Carter-era export ban on crude oil, that would go a long way towards re-balancing the North American markets, but that seems to be a low-probability event.
So it could take a while, but eventually it will...it ALWAYS does!