Comment by citrin_ru
3 hours ago
Oil will not stay expensive for a long time without some carbon tax. Even if Hormuz will remain closed for years production will rise elsewhere. The main reason production is not increasing significantly right now - investors are not sure that prices will stay at the current level for a long time (3+ years) and expect prices to fall before they’ll get enough to recoup investments. The longer prices will stay around $100 the more will be invested into new oil wells.
> Oil will not stay expensive for a long time without some carbon tax.
Which the EU already does.
> Even if Hormuz will remain closed for years production will rise elsewhere.
There aren't that many places outside of MENA that produce oil in reasonable quantities. European reserves are effectively at capacity, can't really build out any more. The only ones who can expand are the US but they have to ship their oil elsewhere to refine it (and in turn get refined products back), the US is only net self-sufficient but not gross self-sufficient.
Even if the US were to increase shale oil/fracking... it wouldn't help the markets too much.
> There aren't that many places outside of MENA that produce oil in reasonable quantities
AFAIK all these countries can increase production given enough investments: US Canada Guyana Venezuela (high political risk but with high oil prices the risk will be taken) Brazil
Whether US is self sufficient or not is not that important as net production and its dynamics.