The only possible concern would be an embargo, in which countries _refused_ to sell to the US at any price. That would be problematic - but it isn't related to Peak Oil and could occur at any time (and, in fact, has in the past) - see http://en.wikipedia.org/wiki/1973_oil_crisis
How I'm using the term strategic here is to indicate that certain resources, those that are most critical to be able to function, such as water and oil, will not always respond to market forces.
So the flatness of suppliers, that it is fungible, is rendered irrelavent once it becomes critical, because that is an aspect of the market to which it no longer strictly applies.
Now, problems could still arise where many countries refuse to sell to us or where China just buys a bunch of oil and starts a huge strategic petroleum reserve that's mainly meant to give us more of a shortage (but that would get expensive quickly, even for China.). But that has nothing to do with whether oil is fungible.
Fungibility means that it makes no difference if Saudi Arabia decides they won't sell to us and instead sells the 100B barrels/day that they would have sold to us (made up number) to China, and because of that, China buys 100B fewer barrels/day from Canada, who sells that 100B to us instead.
If oil becomes very scarce, very quickly, then most countries will see it as a strategic resource. They may sell, to be sure, but not at a volume or a price that will ensure a level of functional viability.
This may not happen, of course, but America isn't stupid: it has spent hundreds of billions ensuring that Iraqi oil will be that source when others fail.
Do you see? It's not just a simple matter of being fungible, because all suppliers are also consumers, and the resource has the potential to be strategic, in which case trumps market forces. If suddenly water became scarce, I may not sell to you at any price because I want to ensure that I have enough for me and my family. It doesn't matter that water is the same everywhere -- if everyone feels that way, you're not going to get some at a price or volume of any certainty. Period.
they don't work when we try them on other countries.
Embargoes really only work when we help those that are embargoing us by setting price controls.
We did that in the 70s and it worked like a charm. Normally, the price we would pay would just go up and third countries would sell us the commodity or cartel members would cheat themselves.
The 70s embargoes wouldn't have worked if the US government hadn't shot itself in the foot. We even had shortages of natural gas and ALL of it was coming from the US!
The market works. The law of supply and demand functions, unless the government decides to break it.
Well that’s what everyone thought up until the 1970’s, when America’s oil fields went into rapid decline. Here’s how it went down:
US> Hello, Saudi Arabia? We would like oil.
SAUDI> No.
US> That's ok! As Jacko says, oil is fungible! Hello, UAE? Oil please.
UAE> No.
US> That's ok! As Jacko says, oil is fungible! Hello, Bahrain, Egypt, Iraq, Kuwait?
> No.
US> Fungible! It's fungible! Hello, Libya, Qatar, Algeria, Syria, Tunisia?
> No.
And suddenly, there was oil panic. Because while oil is fungible, that's an attribute of market dynamics. You have 18 suppliers? Great. Oil is fungible. If one won't sell there are 17 more. But what happens if all 18 won't sell?
Without oil, some countries, like America and its military, can't function. That makes it also strategic.
According your logic, the 1973 crisis wouldn't have happened. Yet it did. And it could again. Oil is fungible until it's strategic. End of sentence.
the emergence of Baghdad as a rival to Riyadh
(I'm not saying that's why, of course. I don't know why. But "it has nothing to do with oil" always struck me as a tad naive, and by "a tad" I mean "maximally".)
-- Alan Greenspan