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1973 oil embargo-like about to hit ?

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posted on Jun, 26 2011 @ 04:58 PM
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As The IEA-OPEC Nash Equilibrium Collapses, Is A 1973-Style OPEC Embargo Next?

Last week's dramatic decision by the US administration to strongarm the IEA into releasing strategic petroleum reserves (of which the US would account for 30 million barrels, or half of the total), is nothing but yet another example of the hobbled and incredibly short-sighted thinking that permeates every corner of the Obama administration. Because as the WSJ reports, "the move by the U.S. and its allies to release strategic reserves of oil could provide a much-needed shot in the arm for the U.S. economy, but risks inflicting lasting damage on the already tense relationship between oil producers and consumers." The move comes on the heels of the dramatic collapse in OPEC talks in Vienna two weeks ago when Saudi Arabia was effectively kicked out of the cartel, further confirmed by reports that the IEA consulted with Saudi (and China and India) in advance of its decision (more later). Additionally, "OPEC and the European Union are due to hold an energy summit in Vienna Monday that will be the first official meeting of producers and consumers since the IEA's move, and will provide a platform for OPEC members to express their disquiet over the stocks' release. However, OPEC's biggest player, Saudi Arabia, won't be present." Make that former player, in an organization now headed by the previously #2 producer, Iran (which just happens is not all that pro-US). The biggest threat, however, is that in direct retaliation against the IEA's cartel-like decision, which comes at the expense of the remaining OPEC countries, is that as Zero Hedge suspected, the next step will be a more than proportionate cut in crude production by OPEC: "Some analysts speculated that OPEC could respond to the IEA release by cutting output to offset the increased supply." What happens next is complete Nash equilibrium collapse, with a high possibility of a 1973-type OPEC oil embargo announcement in the immediate future.

That could be fun.

Remember 1973...

1973 oil crisis

The effects of the embargo were immediate. OPEC forced the oil companies to increase payments drastically. The price of oil quadrupled by 1974 to nearly US$12 per barrel. Government price controls further exacerbated the crisis in the United States, This scarcity was dealt with by rationing of gasoline (which occurred in many countries), with motorists facing long lines at gas stations beginning in summer 1972 and increasing by summer 1973.[24] The American Automobile Association reported that in the last week of February 1974, 20% of American gasoline stations had no fuel at all.[29] In the U.S., odd-even rationing was implemented; drivers of vehicles with license plates having an odd number as the last digit (or a vanity license plate) were allowed to purchase gasoline for their cars only on odd-numbered days of the month, while drivers of vehicles with even-numbered license plates were allowed to purchase fuel only on even-numbered days. The rationing led to incidents of violence, after truck drivers nationwide chose to strike for two days in December 1973 because they objected to the supplies Simon had rationed for their industry.[29] In Pennsylvania and Ohio, non-striking truckers were shot at by striking truckers, and in Arkansas, trucks of non-strikers were attacked with bombs.[29] To help reduce consumption, in 1974 a national maximum speed limit of 55 mph (about 88 km/h) was imposed through the Emergency Highway Energy Conservation Act. In the United States, the retail price of a gallon of gasoline (petrol) rose from a national average of 38.5 cents in May 1973 to 55.1 cents in June 1974. State governments requested citizens not put up Christmas lights, with Oregon banning Christmas as well as commercial lighting altogether.[12] Politicians called for a national gas rationing program.[24] Nixon requested gasoline stations to voluntarily not sell gasoline on Saturday nights or Sundays; 90% of owners complied, which resulted in lines on weekdays.[12]

It's gonna be fun to watch this all over again if it happens. Not to mention the GDP take a big big big big dive.




posted on Jun, 26 2011 @ 05:06 PM
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this must be giving some western leaders night terrors.. I dread to think what the response would be today given how more dependent we are on that evil black stuff and how that would further devastate Western economies..

scary times and possibilities.. especially if you consider what the response might be from western leaders if oil was used as a weapon in this way.
edit on 26/6/11 by thoughtsfull because: remove incorrect data



posted on Jun, 26 2011 @ 05:11 PM
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I fail to see how you think it's "FUN" to watch nations go through an economic crisis.

Apparantly it makes you happy to see people suffer. Not good



posted on Jun, 26 2011 @ 05:15 PM
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I remember the 1973 oil crisis. In Norway, it was forbidden to drive a car on Saturdays and Sundays. Only emergency vehicles and those with special permissions could drive.



posted on Jun, 26 2011 @ 05:18 PM
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reply to post by Hellmutt
 


And this is a reason I have argued that America needs to be involved and influencing any nation that supplies oil that we rely heavily on. Burying our heads in the sand with an isolationist approach and hoping these oil producing country's don't wake up one day and decide to destroy our economy is not how our country should be run.

With something as vital as oil to us we need to ensure it's security for the welfare of our country. If not we will be at the will of these country's to do as they please.



posted on Jun, 26 2011 @ 05:19 PM
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reply to post by Vitchilo
 


this may turn into a game of cat and mouse. If we can hold out long enough to break the cartel's stronghold, then the birds would sing and the sun would shine for all, but realistically, the Oil barons have lots of rainy day cash to sit on and the know in the end, we will break long before they do. Alternative energy is the only way out, and I believe there is no way any economy can survive that kind of change. We will continue business as usual as before. I truly believe the only thing that would change the status quo is a cataclysmic event. Then, we would have to re-invent the wheel.

In answer to the OP question, no, I don't think it will be allowed to get that far. (IMHO)



posted on Jun, 26 2011 @ 05:22 PM
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Can't help but refer to a message I received from a friend earlier this year. My friend was told by his friend who is in special ops that we should be stocking up on food and fuel. Food and Fuel was the specific message. Pretty generic warning, but was from an insider.



posted on Jun, 26 2011 @ 05:28 PM
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reply to post by SunnyDee
 


Plenty of insiders said that also before Y2K hit. What a waste of time and resources.

I think there's a lesson to be learned from that time period.



posted on Jun, 26 2011 @ 05:39 PM
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Originally posted by kro32
I fail to see how you think it's "FUN" to watch nations go through an economic crisis.

Apparantly it makes you happy to see people suffer. Not good


I read it as sarcasm. Maybe you should too?

I remember the oil embargo of the early '70s. I remember the odd/even rationing, the talk of war, the hate for the middle east, people within driving distance of the US/Canadian border filling up "across the pond" but most of all, I remember the slogan "Nuke Their Ass, Take Their Gas."

It amazes me how every President since then has said we need to lessen our dependence on foreign oil but nothing ever changes. I guess we're like a crack addict who pawned everything they owned for crack but still want just one more hit.



posted on Jun, 26 2011 @ 05:44 PM
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Originally posted by kro32
reply to post by SunnyDee
 


Plenty of insiders said that also before Y2K hit. What a waste of time and resources.

I think there's a lesson to be learned from that time period.


Just because some past issue did not happen, does not mean a future serious event won't happen. Your flippant attitude does not serve to enlighten anyone.



posted on Jun, 26 2011 @ 05:48 PM
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Originally posted by SunnyDee

Originally posted by kro32
reply to post by SunnyDee
 


Plenty of insiders said that also before Y2K hit. What a waste of time and resources.

I think there's a lesson to be learned from that time period.


Just because some past issue did not happen, does not mean a future serious event won't happen. Your flippant attitude does not serve to enlighten anyone.


How is comparing scenarios today to past events a flippant attitude? I think ignoring similar events in the past to see what may happen today is the actual flippant attitude.



posted on Jun, 26 2011 @ 05:54 PM
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reply to post by kro32
 


Y2K was not the same situation. Today we have 2,3,4,5 wars going on, financial instability, corrupt government, unemployment.....in general a whole hell of a lot of turmoil, that makes for a possible oil problem, duh.



posted on Jun, 26 2011 @ 05:57 PM
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Originally posted by SunnyDee
reply to post by kro32
 


Y2K was not the same situation. Today we have 2,3,4,5 wars going on, financial instability, corrupt government, unemployment.....in general a whole hell of a lot of turmoil, that makes for a possible oil problem, duh.


I probably wasn't clear. When I referred to Y2K it was in the context of having to prepare and stock up on supplies because there may be a need to protect yourself and your family from a world ending scenario. I was specifically responding to one post and not the entire thread itself.

Of course you are correct that Y2K is not relevant to an oil crisis.



posted on Jun, 26 2011 @ 06:10 PM
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The first article is complete and total crap. The debate in OPEC had to do with the falling price of oil and the lack of Libyas oil production. Some want to increase production to make up for Libyas loss (Saudi Arabia, Kuwait, UAE, Qatar), Iran wants to decrease production because the price is already low even without Libya, and the rest want to maintain the current levels and that is how the meeting ended. Because OPEC did not increase production to meet Libyas loss the release of petroleum reserves was allowed. The reponse from OPEC is if this drops oil prices to low they will meet to cut some production. No embargos, no kicking Saudi Arabia out, etc. Basicly if you see the price of gas get way to cheap do not expect it to last long. They want it cheap enough that people keep buying but high enough that they make max profits without a drop off in use.



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