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Originally Posted by Cannon Shell
That is a simple view however the real world is more complex. Chinas demand for oil is through the roof and a direct pipeline to Daqing is already in the works. The Russians dont have much refining capability but the chinese have plenty of money to build refineries. That alone means the Chinese will be paying less. Since Russia isnt a member of Opec they can produce what they want and sell it at whatever price they deem fit. If Chinese demand continues to rise, in theory they can buy the same amount of Saudi oil they are now and get the rest from Russia. Obviously if they stopped buying OPEC oil it would have an effect but they will never totally depend on the Russians and I dont believe that the Russians can produce nearly enough. But I do know that if China is a big customer and Russia is providing a vast amount of oil that those two are more likely to join forces than with us.
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"That is a simple view however the real world is more complex."
simple is usually right.
"The Russians dont have much refining capability but the chinese have plenty of money to build refineries. That alone means the Chinese will be paying less."
minus the cost of building infrastructure.
"Since Russia isnt a member of Opec they can produce what they want and sell it at whatever price they deem fit."
not true. if i can buy gas at 3.50 from opec or 3.75 from russia, i'll buy from opec. same for the rest of the world.
"If Chinese demand continues to rise, in theory they can buy the same amount of Saudi oil they are now and get the rest from Russia."
no if. chinese demand will rise. but the price will be the same regardless of the source.
"Obviously if they stopped buying OPEC oil it would have an effect but they will never totally depend on the Russians and I dont believe that the Russians can produce nearly enough."
that's wrong. if they stopped buying opec oil because they were taking russian oil off the market, it would have no effect on the global price. there is just 1 big barrel of oil left in the world.
"But I do know that if China is a big customer and Russia is providing a vast amount of oil that those two are more likely to join forces than with us."
russia would be happy to have an ally against the future superpower to the south. we just need to stop being led by clueless fools and we'll be fine.