Note, however, that the 2019 inflation adjusted price of oil/barrel was $29.13 in 1948, $21.26 in 1973, $57.97 in 1978 and $114.93 in 1980. Nearly two decades later, in 1998, the price sold then was $11.91, but the inflation adjusted cost was $18.48, the LOWEST PRICE EVER!!!
1861, during the Civil War, the adjusted price is $47/barrel. For those have no idea, one barrel holds 42 gallons. Lower down in the right column you see the current price of WTI Crude Oil (the U.S. price of petroleum) per barrel.
|Oil Production per capita|
|02||Saudi Arabia (OPEC)||12,000,000||324,866|
|08||United Arab Emirates (OPEC)||3,106,077||335,103|
I suspect what will happen is that oil will be an important part of the energy mix into the middle portion of this country, and will begin to fade as more renewables and fusion expand production. Global warming should bring an end to coal sooner than later.
So with all that above background, what can you make of the latest potential for the next oil crisis? To summarize:
- on September 14 a drone attack damaged half the oil production of Saudi Arabia
- incredibly enough, with all those satellites up there showing us in movies how much we are on top of this kind of provocation, it remains uncertain as I type this bullet about the actual source of that attack
- Saudi Arabia and the USA immediately blamed Iran, for the inspected damage showed their equipment was used
- Iran pledged innocence.
- Houthi rebels (their slogan: God is Greater, Death to America, Death to Israel, Curse on the Jews, Victory to Islam) in Yemen no doubt were responsible, for they have regularly shelled Saudi Arabia
- remember, Saudi Arabia has been at war with Yemen since 2015
- the Houthi movement is in opposition to the current Yemeni president Ali Abdullah Saleh, who is backed by Saudi Arabia--thus the war is now not between governments, but Saudia Arabia and the Houthi
- everyone knows Iran supports the Houthi
So what will be the SA-US response? Send drones to Iran's oil fields? Well, that would surely escalate oil prices. Oil prices already spiked 15% on Monday. But settled on Tuesday when SA reported that 70% of the lost production will soon be operational. There are two prices:
- Brent (Europe), $63/bbl ...but the price was $85/bbl a year ago
- WTI (U.S.), $58/bbl
Finally, President Trump loved this, for the Federal Reserve cut the interest rate by a quarter point to 2.0%. The Dow Jones rose 37 to 27,147.