Monday, July 23, 2012

The BIG LIE regarding Greece

World Oil Exports peaked in 2005 at 40.2 million barrels of Oil per day. Today, Oil exports are almost certainly under 34.5 million bpd for 2012 (my guess. We do know Oil exports were down to 35.2mm bpd for 2010).

Here is a link showing Oil Imports into Greece from 2001 to 2009. I have been unable to find data for 2010 - 2012 First Half... but I feel pretty comfortable in betting that Greece Oil imports for that period have absolutely cratered. I am going to lick my thumb, hold it to the wind and guess imports are off 20% to 35% from the 2007 peak for Greece.

So... did Greece's crash cause the decline in Oil imports or did the decline in Oil imports create a negative feedback loop (vicious cycle) that finished off Greece?

I know... I am a "hammer", and to a hammer everything looks like a nail... but I think I have good reason to think "nail!" in this case.

Take a good, hard, long look at Greece. They were the first of the industrialized nations to be out bid for their Oil needs. Other nations are going to look a lot like Greece as the dominoes do their thing over the next 10 (or 20) years or so. Spain, Italy, Portugal, Ireland are on deck but this is not just about the fiscal basket cases. Yes, they are going to lose the early rounds of the bidding war, but it won't stop there. The early "winners" will not have a seat when this music stops.

Food prices are already being squeezed to the limit - so much so that the cost of Food Stamp/Food Assistance from the U.S. Federal Government is going to eclipse $80 Billion in 2012, up 135% since 2007! Not quite up there with the Military/Social Security/Medicare, but will likely top the Homeland Security Budget in the next few years as biggest of the rest - so don't look to bio fuels for much additional help. "Tight Oil" (Shale, etc), Schmight Oil, might pick up 10 to 20% of the slack caused by declining imports - and then again it might not.

The market response to $100 per barrel Oil is now known - no increase in crude and condensate, even with "Tight Oil", but a large increase in Natural Gas Plant Liquids (primarily ethane, which cannot be used as a transportation fuel), and bio fuels/ethanol which had the unpleasant unintended consequence of driving the price of food out of reach of the poor who then leaned on the government who borrowed the money to pay for the food to feed the poor... Got that? In what universe does that make sense?

The western industrial economies are going to have to share a dwindling supply of exported Oil with the ChIndia behemoth whether it likes it or not though our policy makers will talk about anything and everything else.

Not that it matters... whatever they say, its all Greek to me. Oil speaks my language.


tweell said...

From what I can see, it's a little from column A, a little from column B.

Greece was having trouble paying for their imported oil, and that really got bad after the big boys (Exxon/Mobil etc) decided in late 2010 that it was too risky to send Greece oil on a promise of payment months later. Greece then turned to Iran, but has defaulted payment there due to sanctions and difficulties with banks (they say).

They're getting oil from Russia and Libya at a steep markup right now. Alas, I'm no more able to find solid numbers than you are. The best guesstimate that I can find is 450k bpd from Russia and Libya, with smaller pre-paid deliveries that may make it to 500k bpd.

tweell said...
This comment has been removed by the author.
tweell said...

Ah, I see the problem with my guesstimate. That's the amount coming into the Greek refineries. They're selling some to their neighbors, it isn't all going to Greece.
Macedonia gets 20k bbd from Greece, but I can find no hard figures anywhere else.

Anonymous said...

It looks to me like the decline on US imports is about 2/3 of the decline in the export market. How long can that go on?


Coal Guy