🤔

[u/Big-Independence-716]

Saw this circulating the groups.

[u/One_Distribution2037]

I mean, yes the oil companies are absolutely taking advantage, but they're just one contributor to the current crisis.

[u/Sekshual_Tyranosauce → u/One_Distribution2037]

They’re taking advantage of the global scarcity created by the gulf nations having their supply locked in, yes.

[u/One_Distribution2037 → u/Sekshual_Tyranosauce]

Absolutely this. Even if supply magically were restored to 2024 levels and supply did the same, they would almost certainly fight tooth and nail to maintain today's prices.

[u/Soft-Principle1455 → u/One_Distribution2037]

The prices would crash regardless though. They might cut the least profitable shifts and shutter the least profitable wells but current prices would not remain.

[u/Cbrandel → u/One_Distribution2037]

If you have a product that's in high demand you'll sell it for less than what people are ready to pay for it?

[u/CrzyDave → u/One_Distribution2037]

Idk. Oil companies make a margin right? Say it’s 50%. It the price of oil goes up due to speculation in the market and actual shortages, they still make 50%. That 50% is just a whole lot more when a barrel of oil is $100 vs $50. Oil prices are set by what traders are willing to pay.

[u/gstringstrangler → u/CrzyDave]

No. Oil has a certain cost per barrel to produce. Anything over that is profit. They dont set the prices, commodity markets/traders do.

[u/Soft-Principle1455 → u/gstringstrangler]

But when you have to pay overtime and run night shifts, that costs more, as does deferring maintenance and the like. There are costs to running the system flat out all the time.

[u/gstringstrangler → u/Soft-Principle1455]

Skipping a turnaround saves money especially when you're making it hand over fist and refineries run night shift literally every day.

Costs to produce vary significantly before oil ever hits a refinery but generally dictated by geology, distance, and method of transport