Bangladesh could become the first foreign casualty of Donald Trump’s war in Iran as it faces running out of oil and gas within weeks.
After weeks of rationing, the government in Dhaka is struggling to formulate a plan and is becoming increasingly desperate at the prospect of running out of fuel, sources have told The Telegraph.
Because they’ve been rationing, not allowing the price to rise. Making the samemistake the Americans did under Nixon.
Every time we have to re-learn the same basic lesson — price is the most efficient way to ration demand. That we have to re-learn it is because all too many think it is unfair, in some manner inequitable. Which, well, it quite possibly is but price is still efficient.
This time around it’s the jump in international fuel prices as a result of the war affecting transport out of the Persian Gulf. Should that be happening, should the war be going on? I might not be the right person to ask — the translator of an article of mine into Farsi was jailed for translating my article. I could, perhaps, be a little biased on the question of who should rule Iran.
But given that the closure of the Straits of Hormuz has happened, the prices of oil and gas (LNG) have jumped, what should we do then?
Well, we need to reduce our consumption of those items, obviously enough. What’s the best way of doing that? Economists — well, most of them — insist that price is the most efficient way of allocating that newly scarce resource.
But then no one listens to me…..
The thing with oil is that demand isn’t fixed, and there’s quite a lot of substitution possible that doesn’t have a huge inconvenience. Sure, you’re still going to put fuel into ambulances, but maybe you share a lift, take a bus, If the extra cost of fuel is higher than the inconvenience, you switch.
Approx 0.25% of Bangladeshis own cars. They’re already taking the bus or sharing lifts.
I was referring to the UK.
Bangladesh is basically sitting on a vast oil and gas well which is basically doesn’t exploit for all the reasons you might expect. According to oilprice.com, it has proven oil reserves of around 82 million barrels with a production rate of approximately 4,105 barrels per day.
A spot of light starvation may focus minds. I expect it will happen here, too.
basically doesn’t exploit for all the reasons you might expect
Huh? I hadn’t fingered the Banglas for eco-zeaolots. It can’t be incompetence; you just get people in who can do it, and your ruling class cleans up. Why haven’t they done this?
By ‘the reasons you might expect’ I meant third world stuff, not greenballs.
From what I understand it’s a lack of local skills plus the usual political instability and protectionism deterring foreign investment.
Loads of foreign companies have come close to agreeing to work there but have pulled out for various reasons (including it being economically unviable in places, though that might be changing!).
“From what I understand it’s a lack of local skills…..”
it’s their own fault then, for sending all their ‘engineers’ to the UK in small boats.I
🙂
It is starting to happen in Indonesia and Vietnam – see Jadestone Energy plc
Perhaps the foreign companies were unwilling to pay the bribes required to get started.
It’s most likely that the ruling class gets greedy. Repeated nationalization gets old pretty quickly.
Also it’s hard to get people who can run the place when they get their stuff confiscated due to being foreigners and thus easy prey.
Incompetence comes in many flavours… Failing to create the conditions necessary for successful exploitation of that resource is incompetence writ large. Just a different set of people who are incompetent. Perhaps they took UK politics as a guide rather than a warning?
“proven oil reserves of around 82 million barrels”: that might be better than a slap on the face with a wet fish but it’s not actually very much.
By contrast “By the end of 2024, approximately 47.7 billion barrels of oil equivalent (boe) of oil and gas had been produced from the UK Continental Shelf (UKCS)”.
No, but it’s not far off their annual consumption, and I bet they’d like to have access to it right now. The unproven but suspected amounts under the Bay of Bengal are apparently genuinely huge though, particularly of natural gas.
Fair point: I suppose we can expect India to invade Bangladesh eventually.
Allowing prices to handle this wouldn’t be perfectly fair
The fact that no other system would be perfect, apparently escapes the notice of some people
Ah, it’s “Trump’s war with Iran”.
The British establishment have chosen a side, and it’s the side of the Islamic Revolution in Iran and their cardboard Ayatollah.
Ayatollah Starmer – I like how that rolls out.
Don’t forget the islamic revolution in the UK
Unless it succeeds and we end up with Iran not being a world-threatening menace anymore, in which case it’ll be someone else’s war. Probably Macron if he can get a frigate in there at the last minute.
Hmm, sounds like Bangladesh should send some navy ships to the Strait then.
Appeal to pity.
There’s that double fallacy word again.