While gas prices have already risen a lot due to the Strait of Hormuz being closed, in the United States we are insulated from much of the worst effects of the crisis due to domestic production and inventories. However, as those resources get depleted, could there be a point where we have ration oil, like in the 70s? If so, does temporarily removing the gas tax, like President Trump has done, make the situation worse in the long run?
Could there be a point, where we have to start rationing oil, like in the 70s (in the U.S.)?
byu/First-Ear-1049 inAskEconomics
Posted by First-Ear-1049
1 Comment
If rationing were to occur, it would happen in CA first. Heavy reliance on Asian gas exports and Middle Eastern oil, closure of refineries and domestic drilling, no pipeline to TX, regulations, …
There was a recent report detailing about 4-6 weeks of gas left in CA. However, that was at current demand, and did not mean that after 6 weeks, we would run dry. Gas prices would accelerate and you likely see further demand destruction.
So, it’s possible, but for it to happen, the Straights would have to remain closed for a lot longer (likely at least another quarter, if not rest of year). Or, in other words, it’s unlikely. But every day this continues, it gets a little less unlikely.