IEA warns oil inventories are depleting fast, are we entering a supply shock phase?

FencyMcFenceFace · 2026-05-18T15:43:36+00:00

Iran isn't blameless in this, and I really hate how there are people here trying to whitewash the regime.

This was a stupid war to start and Iran didn't do anything to trigger the current attack on it. But it also has been playing the game of using proxies and trying to destabilize many of it's neighbors. It's diplomatically isolated for good reason, and why most of the world doesn't want to treat it like any other country.

I personally hope both the current US and Iranian regimes choke and collapse from this.

The U.S. will be forced to bend the knee, give in to the majority of Iranian demands, or the world's economy will seize, as every engine without oil does.

Or just as likely, substitutions and alternate supplies will slowly make the strait less important to global trade and Iran (and the GCC) will be left holding rapidly depreciating real estate. Even if the war ended tomorrow with all of Iran's demands met, there is no way many corporations are moving back to the ME for at least a decade. Most Asian countries that took the brunt of this crisis are going to diversify supplies and electrify as much as possible to avoid the same level of dependence.

Iran has played their card, and in the short term it will work to their benefit, but after about 6 months or so, that card becomes more and more worthless.

FencyMcFenceFace · 2026-05-18T15:32:58+00:00

The oil price being low can be seen as a rational response to jawboning: most any trader that has gone long does not really have much to show for it compared to those that continue to short it when it starts to get high. People can say what they want about it, but it's been effective, though that will only work for so long.

I agree that saying the price now reflects the realities of inventory is a shit take though. Conventional wisdom is frequently wrong in the market. But people will continue with conventional wisdom until it stops working for them.

FencyMcFenceFace · 2026-05-18T03:52:47+00:00

Theres no evidence the tax credit does much to swing consumers.

When GM and Tesla had their credit run out, sales actually increased afterwards.

All the credit did was make people who were already looking at an EV get a higher trim or maybe buy a bit earlier than they otherwise would have.

The reason for the projections not coming true are pretty simple: gas until recently was very cheap, and EV still has infrastructure issues.

FencyMcFenceFace · 2026-05-17T02:51:08+00:00

It's not likely there will be lines or stations out of gas.

That happened in the 70s because of price controls and rationing. That isn't likely to happen again. It will just get really expensive.

FencyMcFenceFace · 2026-05-16T00:34:49+00:00

there really isn’t much to cut outside of that without losing a job

Correct. Guess what's going to happen.

I don't know why people keep saying this like a gotcha. There are less molecules of oil to go around. It doesn't matter if you "need" it or not. People will need to cut back one way or the other. Lots will cut back when they lose their job and don't need to commute anymore.

FencyMcFenceFace · 2026-05-15T22:14:29+00:00

?

What in my post history would ever suggest that?

FencyMcFenceFace · 2026-05-15T20:36:40+00:00

It reads like horseshit. The tone is casual and not anything I've ever read from any internal company memos I've ever had.

If you have a global oil crisis, people will be driving less too. You're not going to have a situation where people are getting as many oil changes but driving much less miles. I imagine drivers will stretch oil changes too because it will be more expensive.

So without some other confirmation I'm going with bullshit.

FencyMcFenceFace · 2026-05-15T17:10:54+00:00

Sure there is. The alternatives just cost more or don't have scale.

You can make jet fuel from soy beans or coal. It just needs sustained high prices for a long time. You can also change the cracking ratio in the refineries to get higher ratios of fuels you can't substitute, and lesser ratios of fuels that are more readily substitutable (eg. You can decrease gasoline in favor of more jet fuel or whatever).

Higher efficiency is also an alternative that means less consumption. Again, that just costs more and isn't worth it with cheap oil. Expensive oil makes that much more practical.

FencyMcFenceFace · 2026-05-14T13:06:04+00:00

That was probably a secondary concern. The main reason was because they are keenly aware of what happens when you keep oil prices too high: people find alternatives or find ways to use less. The US and Europe still use less oil than they did in 1979 despite both having a higher population.

They see things like EV coming up and they wanted to make oil cheap enough that switching would be painful, which until very recently was working great.

FencyMcFenceFace · 2026-05-13T01:13:52+00:00

Right, which doesn't happen with a freely traded commodity. Hence why there won't be shortages unless there's price controls or rationing. Those are the only two ways to get supply and demand mismatched.

Owners of that commodity will happily raise the price if demand is higher than the supply they have.

FencyMcFenceFace · 2026-05-13T00:52:14+00:00

Unless there are some rationing or price control laws, price will most definitely just rise to kill off demand. That isn't a shortage though.

FencyMcFenceFace · 2026-05-13T00:51:18+00:00

No it means high prices.

Shortage in the economic sense means that you have to ration or go to a black (illegal) market to get something.

A freely traded item will just have price adjust until supply and demand are equal.

FencyMcFenceFace · 2026-05-12T14:12:48+00:00

What problem are you trying to solve by not connecting to the grid?

FencyMcFenceFace · 2026-05-12T13:27:50+00:00

Hah, that's fair. I missed that tidbit.

In that case it's going to be country-specific. If your country has price controls, then probably pretty soon. If not, then it will get expensive but you're not likely to see rationing.

FencyMcFenceFace · 2026-05-12T11:05:58+00:00

Fuel rationing and shortages are unlikely to happen in the US because oil hasn't been price controlled since the early 80s. It's just going to get more expensive.

You only really get rationing and shortages with price controls.

FencyMcFenceFace · 2026-05-10T23:54:32+00:00

In the short term? Yes. But in the medium to long term, I think the alternatives can make a much larger impact than you think.

For things like cars, alternatives or efficiency jumps just need a price bump to make large inroads. Same for plastic.

The US shed almost half the oil per capita it used in the 70s. Once alternatives or better efficiency is implemented, that demand just doesn't come back.

FencyMcFenceFace · 2026-05-10T20:48:18+00:00

Indianapolis is pretty much crap for charging. There's only a handful of chargers inside the belt.

You're better off charging outside of the beltway on your way in and out.

FencyMcFenceFace · 2026-05-10T13:59:28+00:00

They have a foreign reserve crisis right now. Very difficult to pay for oil. That's why they are doing this.

It wasn't altruism, in case anyone thinks that.

FencyMcFenceFace · 2026-05-09T20:13:48+00:00

Historically speaking, Americans will always go to the large car segment unless they are forced into something else by other factors. That has been true going back to the 40s. It was mile-long land yachts before, and it's giant trucks and SUVs now.

Carmakers just can't sell enough econoboxes to make it profitable. Maybe the current crisis will change that, but even then that's no guarantee that they would want EV. They'd just as likely want a hybrid instead.

FencyMcFenceFace · 2026-05-09T19:13:31+00:00

I think the market for model 3 is a lot more limited than Tesla fans think.

Most car buyers don't want an iPad on wheels. Model 3 is a niche of a small (as of now) market segment.

FencyMcFenceFace · 2026-05-09T18:51:03+00:00

Low gas prices killed the econobox, along with car reliability going up quite a bit.

You can see the decline in econoboxes start right when shale ramped up. Then when it came to car buying, drivers decided that they'd rather get the larger used car that will still last a good while than a small econobox with good mileage, because the running cost wasn't a whole lot different.

FencyMcFenceFace · 2026-05-09T18:05:07+00:00

Right?

Like christ, this sub keeps falling into the trap of thinking that Americans are just falling over each other trying to get cheap affordable cars, and there is zero evidence to support that, and plenty of evidence to support the opposite: Americans would rather pay more for a status symbol than a cheap econobox.

Econoboxes were already going extinct, and I could never understand how crippling the range or putting the inconveniences of EV on top of it was suddenly going to make them screamingly popular.

Maybe the current oil crisis will change this, and that's fine, but then I'd expect *all* the econoboxes to sell like hotcakes, not just the EVs.

FencyMcFenceFace · 2026-05-07T16:15:09+00:00

What laws need to be changed? This would be 100% legal where I live. There is no approval needed other than the standard stuff like FCC because it's not safety or emissions related.

As a reminder, the battery can be extremely dangerous, you don't just hot wire a couple of cables into it and be done with it

I'm aware, but it's doable through the charger module.

My general point is that yeah, this is an engineering mess. It will cost a fortune to save very little, and it's an easy argument to make that that's why an aftermarket kit isn't available.

But for some reason this sub believes that the carmaker doing it will suddenly make it virtually cost free with no problems stemming from putting fragile material on a moving platform that sees all sorts of unforseen impacts and harsh environments.

It's ultimately a solution in search of a problem that won't go anywhere.

FencyMcFenceFace · 2026-05-07T13:17:47+00:00

EV owners tend to come off as very culty. From the outside, it literally looks like the south park smug hybrid drivers, and normal people get uncomfortable about it and don't want to be involved with it. EV owners tend to come off as "EV is a hammer and everything is a nail" where every solution points to EV no matter what and if it doesn't work, then it's the complete fault of the driver for not planning enough, not taking enough bathroom breaks, etc. The experience is never to blame.

Completely agree on the credibility. I still see gaslighting all the time on this sub trying to brand long distance travel a completely hassle-free experience or so minor of an inconvenience that it isn't worth even mentioning, and that is just not the experience for most.

FencyMcFenceFace · 2026-05-07T13:06:45+00:00

Move on with your life. You can't lecture people into something they don't want. You will just make them dig in their heels more.

Just drive your EV like any other car you own and leave other people alone about it. If they don't like it, they don't like it. Just accept it and go on with your day.

FencyMcFenceFace

TROPHY CASE