Petro-armageddon: $500/ barrel oil in several years
So, you may or may not have read the recent article in the Belfast Telegraph "Opec warns oil prices could rocket to $500 a barrel"
Where we read:
Iran's OPEC governor Mohammad Ali Khatibi has warned oil prices could reach as high as $500 per barrel in a few years' time if the US dollar falls further and political tension worsens.
and
-- do the jump --
"If the dollar's value continues to decrease and if the political crisis becomes worse, the oil price would reach up to $500," Mohammad Ali Khatibi said in an interview published on Saturday.
and
"If there is another war in the region, it will not only be Iran's oil not reaching the market, but rather the oil of the whole region would be cut from the market," Khatibi said.
and
"In that case, we will not have a price rise. We will have a price explosion."
When people do that old Peak Oil doomer dystopian calculus, they usually think $200 or $300.
Iran’s OPEC minister just raised the $500/barrel specter. I am willing to consider that this is in the same vein as other saber rattling (like North Korea’s plutonium murmurs today) but its still unsettling.
Let me do the proforma on this.
If today’s per barrel cost is something like $115 and today’s cost of home heating oil is something like $3.60/gal and if your average home heating oil tank is 250 gallons, try these numbers on for size:
If $500/barrel
Then $15.65/gal home heating oil
Then $3912.50/ 250 gallon tank.
Thus – unsustainable heating for those regions that traditionally use home heating oil for winters.
Its August 26 and I live in MA, we are getting closer and closer to winter, closer to the disaster that will be this winter. I wrote about my concerns on this coming and largely unprocessed/ignored disaster on my blog Peaknix in the post "Help me envision the very worst!!".
I work in an industry that is almost wholly dependent on air travel. I am hearing the flights have gone up 100% (300 from boston to san diego to 600).
The tipping point for aviation is meant to be around $135/barrel, after which the American airline business models do not work.
I am wondering how much longer my industry can ignore this although I am not sure what the alternatives would be.
How would $500/barrel impact your work? Your life? What would it look like here in the US?