As gasoline prices soar and the US considers invoking Cold War-era laws to boost production, there’s a massive pool of oil refining capacity on the other side of the Pacific Ocean that’s sitting idle.
Why do we have an energy shock?
Just two years ago, the price of the benchmark US oil futures contract plunged briefly below zero as the pandemic sank the global economy. A year later, the price had rebounded to pre-pandemic levels and kept on rising as revived demand outstripped growth in crude supplies. Then came a wild series of jolts from the waves of sanctions by the US and its allies to shut out Russia, the source of 10% of the world’s oil (along with other key commodities from wheat to fertilizer to nickel)….
