Interesting stuff over on Stratfor about the "Geopolitics of $130 oil."
The short story is: The U.S. is hit, but not too hard, given its transition from manufacturing to services. China gets the worst of it by far -- it lives by manufacturing but it's forced to hold prices down to avoid unrest, so it's "squeezing profits out of exports." Russia's stock is way, way up, as it's sitting on big reserves of both oil and gas and foreign currency. Saudi Arabia is sitting pretty, and may actually become a force for peace (or at least stabilization) in the region to preserve its catseat. Iraq may calm down to focus attention on getting oil going, and Iran is kicking itself for letting its oil assets degrade -- it too may need to seek peace with the West. Relative to this unfolding dynamic, international terrorism is not particularly significant.
There you have it.
Copenhagen climate summit (part 1): the expectations
City preps and countries posture ahead of Copenhagen talks
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Conservationist Posted 7:03 am
28 May 2008
http://www.corrupt.org/
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Jon Rynn Posted 7:18 am
28 May 2008
Now, virtually all transportation is oil-based at this point. But not much of manufacturing is: if you're making machinery, in fact, you would do just fine if all oil disappeared tomorrow (assuming you could replace some lubricants with something bio-based). And the Chinese are making a lot of machinery. Even feedstocks are not a huge portion of oil use, maybe 20% (I compiled some statistics here).
So the chemical industries need oil for input, but virtually no manufacturing industries need oil for energy.
They do need oil to move products, however -- although trains are much more efficient than trucks. But China's big problem, it seems to me, is not that it's manufacturing is impacted by high oil prices, but it's cars are impacted. If they think that their legitimacy rests on cars, then maybe it's critical, but only from a political point of view, not an economic one.
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