I’m surprised that the attacks off of Yemen aren’t causing oil tankers to go the long way around Africa and raising prices. Though I guess America has become a net gas exporter, so maybe we are finally insulated from supply problems on the other side of the word.
Oil price is determined by the global market, so it’s nearly the same everywhere. If for some reason oil was much cheaper in the U.S., the oil companies would have tankers export it to other places, simultaneously increasing the price in the U.S., and lowering the price globally until it’s about the same everywhere. I’m pretty sure it’s actually more abstract and instantaneous than that though, using the futures markets to set the price, which is why gas stations change their prices so often. I.e. we will never be insulated from oil supply problems.
I’m surprised that the attacks off of Yemen aren’t causing oil tankers to go the long way around Africa and raising prices. Though I guess America has become a net gas exporter, so maybe we are finally insulated from supply problems on the other side of the word.
Oil price is determined by the global market, so it’s nearly the same everywhere. If for some reason oil was much cheaper in the U.S., the oil companies would have tankers export it to other places, simultaneously increasing the price in the U.S., and lowering the price globally until it’s about the same everywhere. I’m pretty sure it’s actually more abstract and instantaneous than that though, using the futures markets to set the price, which is why gas stations change their prices so often. I.e. we will never be insulated from oil supply problems.