[alloysteel]

Petroleum is a fungible resource. When one source of supply is diverted to another point, then the other sources that had been selling competitively in the former market, simply step up their deliveries, with scarcely a hiccup in supply.

Unless all oil producers acted in concert, it would be impossible to embargo delivery of petroleum to any given customer.

[boris]

What you said.

[marron]

Petroleum is a fungible resource. When one source of supply is diverted to another point, then the other sources that had been selling competitively in the former market, simply step up their deliveries, with scarcely a hiccup in supply.

Bingo. He can't stop selling oil or he's bankrupt in 10 minutes. He has to sell to someone, and if he sells to someone, its the same as selling to us. He threatens to cut us off all the time, but he's preaching to his choir, who are economic illiterates.

[dalereed]

"When one source of supply is diverted to another point, then the other sources that had been selling competitively in the former market, simply step up their deliveries, with scarcely a hiccup in supply."

Isn't even that hard, many times a tanker load will chsnge hands many times before it's ever delivered.

[dennisw]

Petroleum is a fungible resource. When one source of supply is diverted to another point, then the other sources that had been selling competitively in the former market, simply step up their deliveries, with scarcely a hiccup in supply. Unless all oil producers acted in concert, it would be impossible to embargo delivery of petroleum to any given customer.

Venezuela produces heavy (tar-like) (sour) crude. This crude can only be refined by specialized refineries. The way I understand it we are the perfect customer for Venezuela because of this. That not selling to USA will impact heavily on Venezuela because of lack of other customers for their heavy crude. Venezuela oil isn't as fungible as the sweet light crude such as Saudi Arabia produces

[Ghost of Philip Marlowe]

Typically, this is true. However, the recent increase in oil prices (that is, from an average of 1.80 to an average of 3.00 in a couple of years) is the result of increased demand from India and China. That being the case, evidently the supply side is not able or willing to balance things out to maintain prices. If Ven. cuts back supply to us, we can expect prices to increase, unless we can offset their embargo by increasing our own supply.

This is one of the most critical reasons why we should have drilling and refinery set up in ANWR, the Gulf of Mexico and off the coast of California, even we don't actually use these reserves. Having them on standby, if nothing else, would take this wild card away from hostiles and put it back in our hand.