[alecco]

Eventually, yes. But 1) it's not a magic tap on/off, 2) refineries are specialized for specific types of oil, 3) a lot of ships are stuck there, 4) wells and refineries usually take a long time to restart.

Serious oil traders are saying it will take months or even more than a year to get back to normal.

The only thing containing prices at the moment is many exporters sold futures to lock-in prices for the rest of the year (it wasn't market manipulation as many suspected). But once they are sold out we'll have some interesting price discovery.

https://www.tradingview.com/symbols/ICEEUR-BRN1!/forward-cur...

https://www.tradingview.com/symbols/NYMEX-CL1!/forward-curve...

[dyauspitr]

But how? Iran is right next door. They can target any mode of getting oil out of there. Not just the strait of Hormuz but any pipelines that lead away from the region can just as easily be targeted. One Shahed to the pipeline is all it would take.

[alecco]

At these higher prices you can safely bet other producers are drilling new wells, adding more infrastructure, and upgrading refineries.

[dyauspitr]

That’s not going to replace the sheer volume of the Middle East.

[alecco]

Yes it can. It's only 20%. The difference is ME is very cheap to extract relative to other places like shale.

[Detrytus]

In theory yes, but in practice those drones would have to take a really long flight over enemy territory giving more opportunities to shoot them down. And it’s not like they are difficult to shoot down, they are cheap crap, their only advantage being that there’s a lot of them

[gmerc]

You really haven’t been paying attention to Ukraine. You can launch them from trucks. from boats. You can make them so cheap defense becomes too costly. What people don’t seem to get is that you that much of modern infrastructure is not scalable to an age of war and chaos the US is unleashing in bid to shift power dynamics from economy (which China is winning) to military.

Pipelines have endless vulnerability surface as Ukraine showed and just do the math on trucks vs a super tanker.

[Detrytus]

> You can make them so cheap defense becomes too costly.

That's because the US chose to shoot them down with Patriot missles, like morons. Ukrainians have developed cheap interceptor drones for this very purpose.

There are also radar-guided anti-aircraft guns like this: https://en.wikipedia.org/wiki/Flakpanzer_Gepard

[dyauspitr]

Just for context it’s about $1 million per patriot vs just $2000 for the Ukrainian Shahed interceptors.

[dyauspitr]

As low tech as they are, they fly low, can’t really be detected by radar and you only need one to get through. Pipelines are long and can’t be protected.

[bzzzt]

Why not? Put them in the ground instead of on the ground. Or put a heap of sand on them to absorb the blast.

[dyauspitr]

Yeah buried pipelines are common but I can’t imagine Iran is going to let them be built without interference. Also, a 2000 mile buried pipeline can take 2-3 years to build and that’s without account for 2-5 years of planning, permitting and land acquisition phase. None of this is going to happen soon.

[yread]

The ships shortage is an underreported problem. Follow this guy

https://nitter.net/ed_fin

(LLMs are good at explaining the jargon). Shipping just got 3-4 times more expensive. Not just crude oil, also bulk, chemicals... There are not enough ships and there is not enough bunker diesel - normally costs 400$/t, now 1100$/t

https://shipandbunker.com/prices/apac/ea/cn-hok-hong-kong

[senectus1]

all of this is assuming the US and israel will LET this new bypass go unhindered.