Chapter 706 The outbreak of the oil crisis

Chapter 706 The outbreak of the oil crisis

Chapter 706 The outbreak of the oil crisis

Wei Zetao replied: "These stored plastics are enough for us to use for about a year."

"One year? That's about right." Yang Wendong nodded and said, "But if possible, let Formosa Plastics produce more and ship them to Hong Kong. You should have more in your warehouse, right?"

The first oil crisis lasted for about half a year and was basically over in March 74. However, this was only the end of the oil supply crisis. The global oil shortage will continue for some time, and once the oil price goes up, it will never go down again.

Therefore, even if we consider that it is enough now, there is no harm in stocking a little more. The cost is several times higher. The goods in this warehouse can increase in price by tens of millions of dollars in less than a year. It can be said that it is more cost-effective than Hong Kong real estate speculation in some periods of time.

Wei Zetao replied: "There are still warehouses available, and I have asked Formosa Plastics to produce at full capacity. Tens of thousands of tons of plastic pellets will be sent to Hong Kong in the future."

Although he didn't understand why the boss did this, he could feel that the boss was really ruthless, because he also knew that some of the group's funds went overseas to buy oil company stocks;
However, at present, Hong Kong's real estate and stock markets are both falling, and the group's funds have nowhere to go. Investing in the oil industry is a good choice. From a long-term perspective, the global demand for the oil industry will not decrease. In addition, with the problems in the Middle East, it will definitely not be a loss.
It’s just that what the boss did with the plastic feels a bit too exaggerated.

"Okay." Yang Wendong asked again, "Which companies are responsible for importing gasoline and diesel into Hong Kong?"

Wei Zetao said: "Generally, they are British and American companies such as Mobil, Shell, Caltex, and BP. The global oil industry is also in their hands, but there are also some small trading companies involved in gasoline and diesel."

"Does our company also have a fuel storage warehouse?" Yang Wendong asked again;
A large company has a large number of forklifts internally, trucks for external transportation, and even some industrial products need fuel for cleaning. Therefore, many large factories have special reserve bases, which are similar to gas stations, but are not open to the public, only to internal personnel.

Wei Zetao was a little puzzled, but still said: "Yes, there is one in Kwun Tong, and other subsidiaries' factories in Tsim Sha Tsui and Shatin also have them."

"Well, that's fine. Just try your best to make sure the fuel depots are full and don't worry about anything else." Yang Wendong said.

When the oil crisis broke out, there was a global shortage of oil. The French government was even anxious to find oil underground around Paris. Many cars in Europe and the United States also lined up to look for oil everywhere, but they might not be able to find it until their tanks were empty.

This situation is likely to occur in Hong Kong, but he has no way to prepare for it in advance. When it comes to flammable and explosive materials, only qualified companies can participate. Although Changxing Group is involved in many industries in Hong Kong, it is not involved in fuel.

Stockpiling plastic and buying oil field stocks can be considered an investment, betting that oil prices will rise in the future. This is also a normal business operation. The investment is a bit large, but it is not outrageous. However, if you stockpile large amounts of gasoline and diesel and build large oil storage depots, that would be a serious abnormality.

Even if this is really done, the final profit will not be very great. After all, Hong Kong is just a city and the demand for fuel will not be very large. In addition, to make this business, it is necessary to rely heavily on overseas oil channels, which can only be operated by oil giants such as Mobil and Shell.

On our side, we just need to try our best to ensure our internal needs. If that is not enough, we can only pay a high price. After all, even if we are fully prepared, we can't say that all the companies are unaffected by the global oil crisis. Anyway, the oil price will not fall after the oil crisis, and everything has to adapt.

"Okay." Wei Zetao agreed. Yang Wendong then asked, "Has China Resources made any progress in purchasing chemical fiber equipment?"

Wei Zetao said: "China Resources' intention is that they still want to buy new equipment in China, but if second-hand equipment is cheap enough, they can import a set and place it in a southern city in China. This was not originally planned, but the mainland is already considering it. Specifically, they need to send someone overseas to take a look at the equipment."

"Okay, then we'll send a few translators over here who know a little bit about technology to help the mainland and avoid being cheated." Yang Wendong nodded and said, "We won't get involved too much in other matters. You need to master the balance here."

For major procurement plans involving the mainland, the funds are relatively large. We can provide appropriate assistance, but it is better not to participate in the core;
Only after the reform and opening up, when everything is confirmed, will cooperation become easier.

Right now, with Hong Kong's economy still gradually declining, what he needs to consider most is how to prepare for the first oil crisis in human history.

Soon it was September, and Hong Kong's economy was still in a state of decline. The Hong Kong government's multiple land auctions all failed. Even Yang Wendong carefully observed some of the land released by the Hong Kong government. Unless the location was good or the area was large, he would not participate.

It’s not that these plots of land will not be valuable in the future, but he did it on purpose;
In fact, at this time, or even in 1972 when the price was at its peak, if you buy land with your eyes closed, and wait for the economy to recover in a few years, the land price will surely return to normal, or even go higher.
But he doesn't want to be the savior of the Hong Kong government. If he participates in too many auctions, the Hong Kong government will raise the price appropriately in order to make more money. This is also a normal mentality in a capitalist society.
As in the past, during the global economic crisis in 2008, Taiwan's LCD manufacturers were in a situation of no orders. The mainland's top leaders wanted to help solve this problem, so they organized domestic LCD TV manufacturers to go to Taiwan for purchases. As a result, these LCD manufacturers saw that domestic customers had to buy in Taiwan, so they directly raised prices by 40%, directly raising prices to higher than before the economic crisis.
So even if he likes some land, he would rather buy it directly on the market. The whole market is big enough, and no one will know if he buys anonymously.

Because of this, a large number of land auctions failed to be sold, which also put the Hong Kong government's finances into certain difficulties. This is also what Yang Wendong needs to see;

Time soon came to October, and history continued as before, the oil crisis broke out;
The cause was also the ZZ in the Middle East. It started in 67 and has been fought intermittently until this year. The long-term blockade of the Suez Canal made the most miserable Europe unable to bear it. In the many ZZs after World War II, it was always Mr. Europe who paid for it. No matter how rich the landlords are, they can't waste it like this, right?
The United States is naturally in the same boat with Europe, and YSL itself is a pawn deliberately placed in the oil-producing region of the Middle East, so it officially came out to help.

It actually helped before, but it was still under the guise of free trade. Even if the Middle Eastern countries knew about it, they could only accept it. But now it has come to a head and the contradictions have immediately turned against each other. As a result, the Middle Eastern countries directly announced oil production cuts and imposed an embargo on Europe and the United States. Anyway, at the previous prices, there was basically no profit.

In addition, there is actually another important reason, that is, the Americans have been struggling with the Vietnamese monkeys for nearly 10 years, and finally ended up in a dismal end in January this year. This defeat in JS has also reduced the US's global deterrence, which is far worse than after the end of World War II. Some countries in the Middle East are also no longer afraid of the United States.

When the Middle East oil embargo was first introduced, Western countries were dumbfounded. They did not have any oil reserves. In the 70s and before, no country had this concept. Oil or other oils could basically be bought with money, and the cost and risk of storage were also very high.
Similarly, the capital level also responded quickly, and oil prices soared immediately. When many companies in the oil industry chain saw this situation, they immediately became reluctant to sell even if they still had some crude oil or semi-finished products, finished oil, derivatives, etc. This is also human nature. Everyone knows that prices will rise in the future, so how can they sell at a low price at this time? Those who have goods in hand hope that the price will rise as high as possible;
As a result, gas stations in Europe and the United States had no oil to sell in a very short period of time. European and American customers who drove were also dumbfounded. If the car ran out of oil, it would be equivalent to a pile of scrap metal. Especially in the United States, all kinds of V8 and V12 engines are used. It is no exaggeration to say that they are oil guzzlers. In the past, the price of oil was cheap, a few dollars per mailbox, but now it is impossible to buy oil even if you have money.
What is more serious is that not only private cars but also trucks for long-distance cargo transportation can't find diesel. Even aviation fuel for airplanes and heavy oil for ships are starting to become scarce. In fact, there is absolutely no diesel on the market. The sales restrictions in the Middle East will not have such a big impact. But if too much capital gets involved in hoarding goods, the destructiveness will be extremely great, and even many countries cannot withstand it.

Therefore, European and American countries began to condemn the Middle Eastern countries at the first time, but it was useless. If you have the ability, you can go to JD, otherwise you can only talk about it in the media.

In Hong Kong, the result was naturally the same. Gas stations quickly became empty. Taxis, private cars, trucks, etc. were desperately looking for oil. Everyone was extremely anxious, and this seriously affected business.

Without transportation, it is not just travel that is affected, but the normal operation of the entire society. If the materials of the factory cannot be brought in, then the factory will have to stop working. If one factory in an industrial chain stops working, it may affect the factories in all industrial chains, and then trigger a chain reaction.
The Hong Kong economy, which was already in a downturn, was further hit hard. Originally, it could still rely on industry, but it did not expect such a thing to happen.

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(End of this chapter)