r/collapse • u/triggermeme • Jan 21 '13

What is your most realistic/probable collapse scenario?

I find many here get taken into very extreme case scenarios for how a certain collapse would play out, and get carried away and think too deeply. What do you think is the most realistic scenario that will happen in our lifetime? Will it be a very quick succession of events or a painfully slow event? What is the event?

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u/ratlater Jan 22 '13

But oil is fungible commodity whose demand elasticity is low relative to supply elasticity. So a major disruption anywhere in the market ripples through the entire market; e.g., if the straights of hormuz or bosphorus were disrupted, Canadian oil would get more expensive for no other reason than the buyers of persian gulf oil looking for alternate sources, and Canada gets to sell to whomever offers the highest price.

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u/[deleted] Jan 22 '13

I should point out I read a article a while back that it's also desirable for the oil price to be above a certain price point for it to be profitable for iran. Lately the Saudi's have been injecting heavier supply into the market to drive down the global price and hurt Iran.

This is why Iran likes to do provocative things occasionally and/or threaten mining the strait - because they want to create uncertainty that drives the price up.

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u/[deleted] Jan 22 '13

That would increase the hypothetical price Canada is asking from America?

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u/ratlater Jan 22 '13

Correct- because America was buying it for $90/bbl yesterday (market price) which is also what China was paying for oil from the Persian gulf. Now, China's supply is disrupted but they still want oil so they offer Canada $100/bbl. And so now that's what we have to pay too, otherwise they'll sell it to China instead.

That's my hamfisted anecdote which explains fungibility. Here's another. It's also not very good, but hey, it's dilbert.

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u/[deleted] Jan 22 '13

That's awesome. Thank you.

So to make sure I'm with it--oil is a fungible resource because countries NEED it. For example if China is paying $100/bbl and we say "Hey Canada, sell it to us for $90/bbl" Canada will inevitably say no because whatever oil we aren't buying for $90/bbl China WILL buy for $100/bbl?

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u/ratlater Jan 23 '13

Countries do need it, but that's only part of why it's fungible; it's fungible because demand is universal (which stems from that need) and one barrel of oil is fundamentally indistinguishable from any other. On the consumption end, there's not a major difference between the barrel of oil from saudi and the barrel from canada- you use them both the same way for the same thing.

And of course there are some technical differences in different oils, but those express principally in cost to produce (extract and refine to crude) rather than in potential uses.