I haven’t researched whether sufficient storage capacity could practically be created to significantly influence the market price.

Yes. Granted, it won’t happen unless the U.S. commits visibly to a strategy and takes action (and has the strategy hold across at least two elections). Then either the “defense” tax laid on these countries (assuming they all reform overnight, expel their terrorists and enter probation) can be funneled into alternatives while the tax itself holds up a price floor, and/or the closing of their fields will by itself drive the price up to over $100 bbl.

If the investors are still shy after a show of good faith by the government, we could offer to buy a decade’s out futures contract for, say, a (couple of) strategic reserve’s worth of locally produced oil at (only) $100/bbl. This’ll give the speculators something to gnaw on, too.

There are lots of oil industry execs old enough to remember previous boom/bust cycles and the financial and human toll they exacted.

Perhaps we should hold their oil hostage. Tell them that until they enter the 1st world in terms of governance, rule-of-law, civil society, respect for women, respect for others, protect free speech and freedom of religion, and recognize (and establish free trade with) the other free democracies (including the state of Israel we will not permit them to harvest their oil wealth (set the bar high). Air power will work just fine. First violation we kill off their shipping facilities and pipelines. Second we dirty-up their oilfields and say, “sorry, try again in 10 years after the radiation dies down,” next offense we rubble their refineries and infrastructure around the oilfields. They need our business more than we need their oil. Note the U.S. gets 2x the product out of every barrel of oil of any other 1st world country (at half the price), and 10x any third world. So we don’t care if oil that remains in production is even 2x today’s cost (because all that matters here is our relative advantage over our competitors and enemies – note that this approach resembles Mr. Reagan’s strategy v. the Soviet Union with it’s sand-in-the-gears command economy that was at least 25% dependent on its slave (gulag prison) production).

This approach implies that we will have a short period of pain and (political / enviro) adjustment while the market determines that there can be / will be a great return (for the next 30-40 years) for alternatives, including opening up the better than a trillion barrels that exist in the postage stamp (the equivalent of 30 mile by 30 miles – 1/10th of 1% of the Great (and soon to be very rich) State of Colorado) oil shale reserves to production (Canada benefits as well). And when these ME (and other) states that have abused their oil resources in the past are judged ready to rejoin civilization, charge them a defense tax of, say, the difference between the $2 it costs to pump the oil and $80 (i.e. guarantee a return for the shale oil companies), leaving them $20 profit per barrel for 20-30 years of “probation.”

So, just shut their oil production down. Let them live in the poverty they deserve until they change their ways and police their brethren. Ditto for any other tin-horn dictators (including dictatorships-of-the-people like the elected Hamas, perhaps countries like Venezuela when/if they lose their bearings and respect for every citizen) that are using their energy resources as a path to power and terror. Better yet, only allow civilized democracies to profit from their natural resource wealth. Everyone else is either embargoed or taxed until they free their people. Who determines? Whoever is paying the defense-of-the-world bill. At the moment this is the U.S., but we’ll welcome others to write us checks (or put their people in harms way at a 1-1 ratio to ours) and vote per their participation.

Perhaps this is already “the plan.” Gasoline at $3-4 a gallon is still significantly less (than half) than other 1st world countries. Perhaps we are just in the process of easing up to it, adjusting our citizens’ expectations while dissipating any shock to the economy‚Ķ Hmm… Well, I can dream.

Bring it on. Seal off all ME production and see which of us can be more patient and bear all the costs. Russia wins as a nominally democratic producer, which now has a real reason to insure (at least the appearance of) regular free elections. China loses and discovers it will be much better off after it liberates the Norks and puts the screws on the Iranians. India and others discover that subsidizing energy is just bad business. Ditto for those who levy outrageous taxes on energy (all of us).

(The cost of) Energy is a first order determinant of every person’s quality of life. The more energy costs, the more we sweat. The less energy costs, the more people I can work for, and the more people can work for me, and the wealthier I am, we all are – the wonder of specialization – aka why markets generate a whole that far exceeds the sum of the parts. Granted, the socialists / maternalists are willing to do without this multiplier in the interest of easing citizens’ pain (to say nothing of their own loss of power and status) due to the creative destruction driven by competition (and emergence of the entrepreneurial wealthy – who do not take from the poor but create it from the void – aka the special-interest called government . Which is why we still have $1 a day crushing poverty in the world. Sigh.

Faster please. I’d like a time machine to jump me forward 30 years so I can see how this current foolishness all works out. This (guaranteed) slow motion is just agony.

Where’s my popcorn ? !

Since the entertainment industry is built on oil it will be interesting to see if this industry can survive such a conversion.

But they won’t give up their uranium enrichment.

Pakistan has the bomb and Iran wants it too…no matter the cost.

Another little war or two and Iran could go bust. Already 20 per cent unemployment.

Ideology is a bear to finance.