What if OPEC cut us off?

Question

OPEC could cut off our oil supply completely. They have a great customer in China. They don't need us to consume their oil anymore. If they cut us off, what would happen to our economy???

Answer 1

They won't. OPEC makes money by selling oil and if they stopped selling it to us then they would have to sell it to someone who would sell it to us which in your example would be China. As soon as they stopped selling inventories would rise dramatically and the price per barrel would fall making them less money and giving the Chinese more incentive to play middleman. Since they don't do much besides sell oil it's pretty unlikely they would do anything all that interesting that might drive American's to substitute for oil.

What I think is a far scarier question to think over is what if the world stopped using the U.S. Dollar to price oil? Currency is a supply demand item so if there was less demand for U.S. Dollars (a lot less) what would happen. That's a real possibility and fairly concerning.

Answer 2

We just keep on going. Oil is a big money maker.
I try to explain; Say you have a job that you go to work, not have to be on time, just get there. Leave early when you want. Hour for lunch, take an extra 30 minutes if you need to do something. Make $60,000 with added tax incentives.
You going to give that up to work for Wal-Wort?
Now, 10 years down the road, the company you work for goes out of business. You knew this would happen and have made preparations and have another job lined up to make $60,000.
So, America knows this is coming one day. But, until it does, you use what you got and prepare.
America has a lot of Technology. Electric cars have been around a lot longer than people realize, but, oil was a big money maker. Other alternate fuel sources have been around a lot longer than people realize, but, oil was a big money maker.
The increase in the price of oil is making oil companies Billions extra a "Month"!!!! The statistics say it cost the consumer about $140 extra a month. I not sure that just cars, everyone (Bike Riders) etc. I not know who was used in the Average for the $140 per month.
Heck, the Navy has an Aircraft Carrier. I not exact, but, make a point, so, research this. That Aircraft Carrier will not need refueled for something like 50 years. :-o (Nuclear?)

Answer 3

Suppose that OPEC did cut off the US, and tried to sell the oil to China. The removal of the US from the oil market would bring the US economy down, but it would also destroy the oil market, too. The demand for oil would drop by the amount of demand accounted for by the US, which would lower the price substantially.

So, it would not be in OPEC's interest to do this.

Answer 4

They wouldn't. While it is true that China's and India's consumption of oil has risen; the US is still OPEC's biggest consumer. They may lower the amount of oil we get, but if they cut us off completely they would lose so much money that they couldn't do it for long.

If they did for some reason cut us off, they would be in violation of multiple treaties, and dependinding on which party the president is from we would either go to war, or just whine alot.

Answer 5

Some points to consider:

1. If the U.S. was cut off from OPEC, the U.S would probably pull their Military base out of Saudi Arabia which then would give incentive to coutries/groups in the Middle East to invade Saudi Arabia, Qatar, Abu Dabi, Kuwait, etc...The only reason these countries are not invaded is because of the U.S. base- you will not hear this from the mainstream media....

2. It would be difficult for OPEC to cut the U.S. off because oil can be purchased on the open market as a commodity by companies. How would they ensure that these companies will not sell to the U.S.. i.e. Exxon supplies Europe with gasoline.

3. The U.S. would be forced to become more independent by drilling our own land. for e.g. In Alaska.

Answer 6

We export alot of our oil to other countries because there is more profit in it. I would hope that this country would stop exporting our own oil internationally for our use here until we could find an alternate fuel source... Actually I am hoping it never gets that far and we find an alternative source within the next 10 to 20 years..

Answer 7

There are other alternative sources of energy ready to be launched. There is going to be a crisis period but after a couple of years balance would be reached again.

Answer 8

IT WOULDNT BE GOOD, THATS FOR SURE