When the poet John Donne observed that "no man is an island", was he referring to the impact of world events on tricone prices? We'll never know for sure, but we DO know that oil and tricone prices, like anything in a free market economy, do not exist in a vacuum.
Generally speaking, greater demand leads to higher oil prices, sparking more drilling activity. This increases the need for drilling supplies such as tricone drill bits, and likely increases their cost as well.
There are several factors that impact oil and tricone demand and prices. One of the most significant is a crisis in the form of war, economic upheaval or disaster.
Not all wars are created equal. A conflict in Belgium or Paraguay is unlikely to affect tricone demand. Shift the scene to a major oil-producing country, however, and it's a different story. Yet the influence of war on oil and tricone prices is not a simple formula:
War = Higher prices.
Actually, it's two formulas:
War + uncertainty = increased prices
War – uncertainty = decreased prices
As an example, in the two weeks preceding Operation Desert Storm in 1991, oil prices jumped 12.5%. On January 17, 1991, the day after the United Stated began airstrikes in Iraq, oil prices suffered one of their largest one-day drops, plunging 33%.
What caused the dramatic shift in price? Among other things, it was the level of uncertainty:
Prior to the war: Prospect of decreased oil supply = increased uncertainty
After the bombing: A sense on global markets that the conflict would be short-lived = decreased uncertainty
Had the war been prolonged, prices may have remained inflated until order was restored.
Oil and tricone rates tend to mirror the state of the economy, both in North America and overseas.
The global recession that began in late 2008 saw a significant decline in oil (and thus tricone) demand, forcing oil prices down from a peak of $ 147 per barrel in July 2008 to just $ 42 per barrel by late December of that year.
Looking closer to home, the threat of a US government shutdown in September of 2013 reduced the demand, driving oil prices to a three-month low. If the shutdown were to proceed, the issuance of permits and leases for drilling would effectively stop, further curtailing the demand for tricones.
With their high profile in the media, natural and man-made disasters appear to have dramatic effects on oil and tricone prices. In truth, the fallout is often less than from war or economic upheaval, for one reason: The amount of oil involved.
Hurricane Katrina affected 19% of US oil production, increasing demand for oil and tricones and thus boosting prices.
By contrast, the Exxon-Valdez oil spill, which many assumed would cause prices to skyrocket, had little effect, as only 250,000 barrels were involved. It was enough to do significant environmental damage and cause a public relations nightmare for Exxon. But it was essentially a drop in the bucket (or barrel) relative to total oil supply.
Even the BP spill did not really impact prices. While 179 million barrels was a significant amount, it represented only 9 days of US consumption that year.
This is not to say that natural or man-made disasters can't significantly impact tricones. It simply means that to feel the effects, the event must cause substantial oil shortages over a prolonged period.
The relationship between world events and tricone prices is complex. Timing, scope, location and competing economic interests can all play a part, and for every "rule" there are exceptions.
So maybe John Donne wasn't alluding to tricone prices and world affairs. Then again, given the potential impact of war, disaster and economic upheaval on the cost of tricones, perhaps he should have been.