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dontpet t1_j8yi0w1 wrote

>Russia’s invasion of Ukraine caused global energy prices to rise dramatically in 2022, exacerbating existing price increases due to rising demand from the post-pandemic economic recovery.

I guess it's hard to separate the two.

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Archaris t1_j8yz0iw wrote

> rising demand

limited demand... from what? a return to pre-pandemic production levels? The production was always there (no missing refineries afaik) they just have a few convenient reasons to gouge everyone unable to negotiate fair prices.

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Discount_gentleman t1_j901ara wrote

Speaking as someone who hates oil companies, I disagree. The energy transition is going to be very messy by definition. There are lots of factors and they all have different time scales, which makes it impossible to match them up. Oil and gas investments have minimum payback periods of 5-30 years, and so they can't respond to short term events, even intense ones. As global demand for fossil fuels falls, it will get even messier.

I'm not saying the fossil fuel companies are all acting in good faith, I'm saying it doesn't matter. They couldn't match supply to demand effectively even if they wanted to.

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The_2nd_Coming t1_j97ir5a wrote

I mean that's the whole reason why free markets are so powerful; it let's market forces eventually solve these supply and demand problems.

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scotty_dont t1_j90sik3 wrote

Different sides of the same coin. The reliance on marginal suppliers has massively increased, which has pushed up prices for the whole sector, which has resulted in massive profits for everyone.

If your really need X barrels of oil and a marginal supplier can squeeze you for those last few barrels well… suck it up because that’s the new price of oil. There is nothing else that can be done; your demand isn’t elastic. Demand has to be killed with declining economic activity until we are back to balance.

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