200-Dollar-Öl ist nicht so verrückt, wie es sich anhört

Weird headline. $200 oil may be coming. But it is extremely crazy. A self-inflicted wound by the US. It will decimate the economy. Oil goes into everything we produce in one form or another.

The analysis in this article seems somewhat conflicted. On the one hand, they include several balance of supply studies, that indicate oil could top out in the $110-$150 range, based on maximum capacity from sources that aren’t limited by Middle East transmission risks. On the other hand, the $200 value seems to be provided as a calculation of the equilibrium price of oil, based on an assumption that non middle eastern oil output remains consistent with prewar levels. I’m inclined to believe the lower number is more accurate, since global oil production was running at low capacity prewar, due to the low oil prices. With prices high, the excess capacity is taken back into production. Additionally, when considering multi year timeframes, it is highly realistic that current proven reserves will see an increase in extraction capacity installed.