Oddbean new post about login | logout I feel like this was all for show. What’s stopping Iran from taking oil prices to $300?
it was a slow launch to find out who the players are here (I.e. which nations would launch a defense on behalf of Israel). and they found out. we’ll see what’s next.
Makes sense. I hope Israel doesn’t retaliate and this deescalates.
Um, the rest of the market.
You don’t think blocking shipping and a few well placed missiles in Saudi Arabia, one of their enemies, might do the trick?
Oh, I thought you meant setting the price. Sure, disruptions will affect price temporarily, and then we’ll witness the miracle of the profit motive bid it right back down as producers all over the world fill the void.
Yes, that’s true but I wonder how much damage it can do in the short term. Could $300 oil set off financial market troubles in the USA for example? 🤔
It’s probably similar to what effects natural disasters can have, except the whole world is affected. So all profits would be affected and stocks would immediately reflect that. But I don’t think it would cause a major recession unless the price stayed elevated for an extended period of time. Sure, gas and food prices shoot up, but people just adjust their consumption.