Here is a statement from Host (post #22):
Quote:
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They have created excess profits, by successfully attempting to control supply of both domestically available crude oil to refine, and of refining capacity itself, choking it off.
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I think his view here, that private oil companies control the supply of oil fuels his perception of the oil industry and is commonly held. The question, is it factually accurate or a myth? Do the private oil companies control the supply of oil?
The answer is no. Countries own 90% of the worlds known oil and gas reserves. They can pump or not pump as much as they want or they can contract with oil companies to do it. If company A won't do it company B might, if neither will do it the country can build there own infrastructure to do it. They can contract for exploration or do it themselves.
Quote:
"In fact, country-owned oil companies account for 90 percent of the ownership of the known oil and gas reserves. And we have examples like the countries of Saudi Arabia, Iran, Kuwait, Venezuela and Russia.
"These are countries that actually own the oil companies in their countries. So they are obviously getting rich.
"In fact, Exxon -- which is one of the biggest private owned oil companies -- they ranked only 14th in the world in the value of oil companies," Walden adds. "So when we see the price of oil rising, it’s really those nationalized companies and countries where there are big oil reserves –- they’re the ones that really benefit the most."
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This can be verified from other sources as well, I just happened to pick this one.
http://www.ncsu.edu/project/calscomm...ns_the_oi.html
If private oil companies don't control the oil in the ground, how can they manipulate the market? As we think about that question, I am sure we will encounter more myths.