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KimchiNinja
Joined: 01 May 2012
Location: Gangnam
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 Posted: Sun Oct 12, 2014 3:13 am Post subject: The cost of Middle East oil |
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Recently the USA had some nonsense figures on how much it is costing per day to fight "the Islamic State", or whatever. They say it is costing $8M/day. Nonsense on multiple levels; their involvement in the Middle East has always been about oil, and any USG estimate is going to be seriously wrong (low).
So it got me thinking, what is the actual cost of US involvement in the Middle East, and what is the real cost of ME oil (ignoring the cost of externalities, like slaughtering people and stuff). That is a complex question, but this is going to be quick and dirty as I have other things to do, still it gets us in the general vicinity...
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Estimated cost of military involvement in the Middle East for the last 30yrs, $7T
Estimated cost of Iraq war, $1T
30yr total cost, $8T
Cost per day = $730M
USA barrels of oil per day, 19M
* 25% from Middle East
= 4.8M barrels from ME per day
Cost of oil per barrel $85
Cost of war per barrel $154
Cost of oil from ME, per barrel, $239
Source: Roger J. Stern, “United States Cost of Military Force Projection in the Persian Gulf, 1976–2007,” Energy Policy, 38 (June 2010), 2816–25
Plus estimated $1T for Iraq War
Imports http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm |
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KimchiNinja
Joined: 01 May 2012
Location: Gangnam
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| Posted: Sun Oct 12, 2014 3:38 am Post subject: Re: The cost of Middle East oil |
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| KimchiNinja wrote: |
Cost of oil per barrel $85
Cost of war per barrel $154
Cost of oil from ME, per barrel, $239 |
Hmm, what does it all mean?
Well I guess it means variable cost is $85, but there are fixed costs of $154 per barrel for the USG to keep this oil flowing. Since the USG doesn't have the money (revenue can barely cover basic government operations) it borrows money from China to pay for it. And when China doesn't want to loan any more money, the USG just prints money like crazy to hold things together.
Because if they leave the ME, either a) someone else moves in, or b) those oil producing countries start making their own rules (as they did in the 1970s), and the whole USA game falls to pieces. Why? Because then the Middle East has them by the energy balls, China the creditor has them by the financial balls, plus the whole petrodollar thing.
House of cards. |
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mithridates
Joined: 03 Mar 2003
Location: President's office, Korean Space Agency
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| Posted: Sun Oct 12, 2014 9:35 am Post subject: Re: The cost of Middle East oil |
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| KimchiNinja wrote: |
Recently the USA had some nonsense figures on how much it is costing per day to fight "the Islamic State", or whatever. They say it is costing $8M/day. Nonsense on multiple levels; their involvement in the Middle East has always been about oil, and any USG estimate is going to be seriously wrong (low).
So it got me thinking, what is the actual cost of US involvement in the Middle East, and what is the real cost of ME oil (ignoring the cost of externalities, like slaughtering people and stuff). That is a complex question, but this is going to be quick and dirty as I have other things to do, still it gets us in the general vicinity...
-------------------------------
Estimated cost of military involvement in the Middle East for the last 30yrs, $7T
Estimated cost of Iraq war, $1T
30yr total cost, $8T
Cost per day = $730M
USA barrels of oil per day, 19M
* 25% from Middle East
= 4.8M barrels from ME per day
Cost of oil per barrel $85
Cost of war per barrel $154
Cost of oil from ME, per barrel, $239
[i]Source: Roger J. Stern, “United States Cost of Military Force Projection in the Persian Gulf, 1976–2007,” Energy Policy, 38 (June 2010), 2816–25 |
I don't recommend a book from 2010 to understand current US policy. Here's what US oil production has done since then.
http://drg.blob.core.windows.net/hellenicshippingnewsbody/images/stories/General_photos2/annual%20us%20crude%20oil%20productionand2015%20forecast.png
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/us-oil-imports-forecast-to-hit-45-year-low-next-year/article19537525/
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The U.S. Energy Department expects oil imports to hit their lowest level since 1970 next year, a forecast that is adding fuel to demands for the Obama administration to end a prohibition on crude exports that has been in place since 1973 Arab oil embargo.
The U.S. Energy Information Administration forecast that, by the end of next year, imported oil will account for only 22 per cent of U.S. consumption, or about four million barrels a day. |
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mithridates
Joined: 03 Mar 2003
Location: President's office, Korean Space Agency
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| Posted: Sun Oct 12, 2014 12:47 pm Post subject: |
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And from July:
http://www.scpr.org/programs/airtalk/2014/10/09/39769/in-controversial-move-us-begins-exporting-crude-oi/
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| In late July, a tanker loaded with 400,000 barrels of American oil, left Texas for South Korea. This export of oil stands-out because it is the first in nearly forty years. Oil has been essentially banned from export since the 1970’s due to the impact of OPEC’s oil embargo. US oil refineries (where oil is processed), benefited from the ban, because crude was kept and processed in the United States. But, many believe times have changed, saying the ban should be re-examined in light of global shifts. |
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Leon
Joined: 31 May 2010
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| Posted: Sun Oct 12, 2014 2:30 pm Post subject: Re: The cost of Middle East oil |
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| KimchiNinja wrote: |
Recently the USA had some nonsense figures on how much it is costing per day to fight "the Islamic State", or whatever. They say it is costing $8M/day. Nonsense on multiple levels; their involvement in the Middle East has always been about oil, and any USG estimate is going to be seriously wrong (low).
So it got me thinking, what is the actual cost of US involvement in the Middle East, and what is the real cost of ME oil (ignoring the cost of externalities, like slaughtering people and stuff). That is a complex question, but this is going to be quick and dirty as I have other things to do, still it gets us in the general vicinity...
-------------------------------
Estimated cost of military involvement in the Middle East for the last 30yrs, $7T
Estimated cost of Iraq war, $1T
30yr total cost, $8T
Cost per day = $730M
USA barrels of oil per day, 19M
* 25% from Middle East
= 4.8M barrels from ME per day
Cost of oil per barrel $85
Cost of war per barrel $154
Cost of oil from ME, per barrel, $239
Source: Roger J. Stern, “United States Cost of Military Force Projection in the Persian Gulf, 1976–2007,” Energy Policy, 38 (June 2010), 2816–25
Plus estimated $1T for Iraq War
Imports http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm |
Are you double counting the Iraq War? The first source includes up to 2007, so that would include most of the Iraq War. Also, during the 1970s the whole containment against the USSR was just as/much more important to the U.S. than oil, so what you're providing is not really an unbiased estimate of the cost of oil, because it fails to take into account other U.S. interests in the region. Not to mention the Israel factor, which is another thing altogether. |
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Titus
Joined: 19 May 2012
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| Posted: Sun Oct 12, 2014 4:36 pm Post subject: |
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| Anytime you see "oil" as a reason for American behavior you have to in your head do a control F replace oil - Israel and then things start making more sense. |
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GENO123
Joined: 28 Jan 2010
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| Posted: Sun Oct 12, 2014 7:53 pm Post subject: |
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http://www.reuters.com/article/2010/11/29/us-wikileaks-usa-idUSTRE6AP06Z20101129
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| Among the revelations in Britain's Guardian newspaper, which also received an advance look at the documents along with France's Le Monde, Germany's Der Spiegel and Spain's El Pais, King Abdullah is reported to have "frequently exhorted the U.S. to attack Iran to put an end to its nuclear weapons program" |
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KimchiNinja
Joined: 01 May 2012
Location: Gangnam
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| Posted: Sun Oct 12, 2014 8:27 pm Post subject: Re: The cost of Middle East oil |
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| Leon wrote: |
| Are you double counting the Iraq War? The first source includes up to 2007, so that would include most of the Iraq War. |
Naw, it's single counted. The first source did not include the Iraq War. |
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KimchiNinja
Joined: 01 May 2012
Location: Gangnam
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| Posted: Sun Oct 12, 2014 8:28 pm Post subject: Re: The cost of Middle East oil |
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| mithridates wrote: |
| Here's what US oil production has done since then. |
Already aware of that, it doesn't seem relevant to the original post. |
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GENO123
Joined: 28 Jan 2010
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| Posted: Sun Oct 12, 2014 10:23 pm Post subject: |
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Who has more oil coal natl gas & farm land the USA or China?
Lots of old people and only a few young people = economic hell
Until the supply of engineers from India stops things are unlikely to change for the US in terms of its place in the world. Most likely as long as the US can keep getting engineers from overseas , nations overseas will keep buying US bonds
Also 3D printing will bring back manufacturing to the US. Though it probably wont bring back many jobs to the US.
I don't think most Americans enjoy that high of a living standard at all but the place of the US in the world isn't going to change anytime soon. |
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