Could or would OPEC nations pick up the slack?
The context of the prediction is that at 5 million barrels a day of Russian oil left the world market, then oil could soar to 380 dollars a barrel.
5 million barrels a day out of the current 35 million barrels a day is about 14 percent. The answer is yes and no.
Yes it can be made up, but no it cannot be made up in a quarter or even in a year.
As you are looking at 35 million times 250 dollars a day coming out of the world economy, or 7 trillion dollars a day, then you can expect the economy to contract.
Another way to look at is this, the world economy runs on oil. A 14 percent reduction in oil supply would require a 14 percent shrinkage in the economy to match. This will not be even across the planet. Those that produce oil will see net gains and those that import will contract mor.
I posted a little more detail on DB’a thread, the idea is the same. You get a recession, and a dramatic shift in the economy.
In the United States, you can expect dramatic growth in the mid west and tough times on the East and West coasts.
I would expect that the first thrust would be Eagle Ford shale, buy land in San Antonio, Bakke Shale, buy land in Williston North Dakota, the
oil fields in Odessa and Midland Texas as well as Oklahoma and Colorado.
If it looks like we have 7 to 10 years shortage of oil, then large developments in the Gulf of Mexico and off shore West Africa and Brazil.
The shale is faster to be stood up with less infrastructure. Offshore takes longer and costs more, but produces a longer running field.
As electricity rates have a fuel cost adjustment and there will be shifting of consumption
from oil to natural gas, you can expect that the homeowner electric bill to increase causing a faster move to solar plus storage.
The bottle neck of course will be batteries, and batteries is
where the money will end up being focused.