Dalal.Holdings Posted March 3 Posted March 3 2 minutes ago, Blake Hampton said: China cares about China. Very simplistic. China has provided nothing but words while the Iranian regime is decapitated. Venezuela another. Now, China prodding Iranian officials (are there any left?) to stop attacking Qatari gas and keep the Strait open...literally the only points of leverage the Iranian regime has left... Sends a clear message to everyone about the value of a friendship with China.
Spekulatius Posted March 4 Posted March 4 5 hours ago, SharperDingaan said: The article neglects to mention .... it's also a US blockade on sanctioned Iranian exports, and only on certain cargo's. As long as its a ship registered to friendly parties, or a cargo owned by friendly parties, you're golden Maybe those Chinese cargo's are allowed through for the right 'fee' ? .... or maybe not. Maybe that temporarily US owned cargo on an Iranian ship ... for the right fee? If you want production from Kharg Island ..... Ships routinely sink in awkward places, and Iranian oil smugglers are amongst the best in the world SD The way you frame it, it sounds a bit like:
SharperDingaan Posted March 4 Posted March 4 (edited) Back in the day, I learnt some of the finer points from a pair of elderly Iranian brothers, very good at making ships and cargoes, both appear and disappear ... most anywhere in the world Sadly they had way more flexibility in their time.... but much of it today is the same old, in new wrappers. They were both wicked chess players, masters at sleight of hand on the board, and great fun to play against (widespread cheating on both sides!). Friends of a grandfather, and something of an apprenticeship in the dark arts; my kind of scum Typically family businesses .... invitation only. SD Edited March 5 by SharperDingaan
SharperDingaan Posted March 5 Posted March 5 (edited) Friday last week (Feb-17), WTI closed at USD 67.02/bbl. Thursday this week (Mar-05), at about 15:20 EST, WTI is USD 81.65/bbl ... and may well be higher by end of day tomorrow. 21% higher, week to date . 4 of the 52 US states already have gas >$4/gallon, only 16 are < $3/gallon. Doesn't look good for next week. https://www.gasbuddy.com/usa Lot of Canadian producers are wildly profitable at WTI > USD 80/bbl, and many will be using the opportunity to hedge drilling/acquisition budgets. What one can't drill, one buys, and the WCSB is still very cheap . CVE needs to pay down its MEG debt, it's raining money, and there will be little problem moving properties for sale. And Orange Boy has cut lots of points off the indexes this week, making everything cheaper than it should be. What's not to love SD Edited March 5 by SharperDingaan
SharperDingaan Posted March 6 Posted March 6 (edited) Illuminating test ..... When you are a commodity company, and the price of the only commodity you sell rises, so should your share price. Particularly if you sell primarily one product (WTI/related pegged blends), the price rise is extreme, and the review period is short (< one week) WTI (02/27 close) was USD 67.02. Current WTI price is USD 85.78 WTI Ratio = current price/02-27 close = 85.78/67.02 = 1.28x WTI Ratio x share price (02/27 close) = Expected share price today Expected share price today - share price (03/05 close) = Price delta ((Price delta/Expected share price today)-1)x 100 = Price delta (%) Price delta (%) is around -18% for many WCSB companies (1.00-Price delta (%)) x current WTI price = assumed WTI price. Compare assumed WTI price to the USD 67.02 close last week. Current WTI prices are not being priced in Help yourself boys and girls .... there is almost no WTI price risk in the share prices . While in the real world, that WTI production is selling for materially more, and the forward market is suddenly deep and wide open Gotta love pillage SD Edited March 6 by SharperDingaan
Blake Hampton Posted March 6 Posted March 6 It's gonna be interesting watching Trump try to dig his way out of this hole he's gotten himself into. I don't think he has the power to move the Straight of Hormuz someplace more safe, though some people on this board might disagree. Is Iran just strong enough to keep causing chaos in energy markets? Trump will have you believe that he's actually Iron Man, and that he alone will guide those tankers through to safety. I'm not so sure.
SharperDingaan Posted March 6 Posted March 6 (edited) The TSX-300 closed friday last week at 34,339, it's currently at 33,199, down 1,140 points (3.32%) week to date ... way to go Orange Boy . Similar thing on the DJ Index. There are only five ways by which to mitigate the current oil price run-up. 1) Reduce/remove sanctions on Russian/Iranian/Iraqi/VZ crude ... so that a China/India etc don't have to buy unsanctioned supply; 2) Flood the market with crude from SPR's/non-ME suppliers ... to raise supply; 3) Game the market via paper barrels and the spot/forward markets; 4) Keep the ME pumping, refining, and liquification going .... to keep supply lines full; 5) Keep both the desert pipelines and the SOH open, and tanker transit profitable. Low cost insurance and military escort through both the SOH and related collection zones ain't going to cut it. At best, boots on the ground seizure and control of Kharg Island, and removal of sanctions on Iranian crude might ... but oil prices will spike a lot higher until implementation is actually delivering (inventories loading, and new supply continuing to flow in). Show me, don't tell me . No help from friends; until tariffs are removed/reduced, and tariff reimbursement implemented. We still love you, but threats and bullying goes both ways. SD Edited March 6 by SharperDingaan
rogermunibond Posted March 6 Posted March 6 SPR is nowhere close to where it was before 2022 drawdown. Iranians will call Trump's bluff. The longer they can hold out the better deal the regime will get.
Warner Posted March 6 Posted March 6 Canadian oil companies will react better to the higher prices if they are sustained longer term. A 20 usd increase might improve their netback by around 12 usd. Most companies are post on their royalties. Around 1/3 at these prices will be royalties. So, CVE at 1M/day this adds around 12M daily to their bottom line. If this goes on for a year it’s wildly beneficial, but for a couple weeks less so. from a shareholder perspective IMO and SU have the potential to perform better as they have no debt that needs paid down. All the additional surplus will go to buybacks. In general their downstream would get penalized in high price environments but I suspect crack spreads are also very wide. check out the well written article here. https://www.zinebriboua.com/p/under-beijings-wing-irans-arsenal
SharperDingaan Posted March 7 Posted March 7 (edited) 7 hours ago, Warner said: Canadian oil companies will react better to the higher prices if they are sustained longer term. A 20 usd increase might improve their netback by around 12 usd. Most companies are post on their royalties. Around 1/3 at these prices will be royalties. So, CVE at 1M/day this adds around 12M daily to their bottom line. If this goes on for a year it’s wildly beneficial, but for a couple weeks less so. from a shareholder perspective IMO and SU have the potential to perform better as they have no debt that needs paid down. All the additional surplus will go to buybacks. In general their downstream would get penalized in high price environments but I suspect crack spreads are also very wide. check out the well written article here. https://www.zinebriboua.com/p/under-beijings-wing-irans-arsenal 12M/day is an extra USD 360M (CAD 500M) per month; buys back a lot of stock. SD Edited March 7 by SharperDingaan
SharperDingaan Posted March 7 Posted March 7 (edited) Pretty sure WTI goes > USD 100/bbl on Monday ..... "Kuwait said it is cutting oil production due to “Iranian threats against safe passage of ships through the Strait of Hormuz.” Kuwait is the fifth-largest oil producer in OPEC. It produced approximately 2.6 million barrels per day in January." https://www.cnbc.com/2026/03/07/kuwait-oil-cut-iran-war-strait-hormuz.html SD Edited March 7 by SharperDingaan
Sweet Posted March 8 Posted March 8 (edited) 16 hours ago, SharperDingaan said: Pretty sure WTI goes > USD 100/bbl on Monday ..... "Kuwait said it is cutting oil production due to “Iranian threats against safe passage of ships through the Strait of Hormuz.” Kuwait is the fifth-largest oil producer in OPEC. It produced approximately 2.6 million barrels per day in January." https://www.cnbc.com/2026/03/07/kuwait-oil-cut-iran-war-strait-hormuz.html SD Looks that way. I don’t think this war is going to be over quick. Although the capacity of Iran to keep the straights closed might only last a few weeks. Think a release of reserves is likely - even as pointed out - the US reserve is short on the heavy stuff taken off the market. Other countries have significant reserves too. Edited March 8 by Sweet
SharperDingaan Posted March 8 Posted March 8 (edited) 2 hours ago, Sweet said: Looks that way. I don’t think this war is going to be over quick. Although the capacity of Iran to keep the straights closed might only last a few weeks. Think a release of reserves is likely - even as pointed out - the US reserve is short on the heavy stuff taken off the market. Other countries have significant reserves too. Current speculation is Brent at USD 110-120/bbl, as Iranian oil infrastructure is now also being hit. Record call volumes, evidence that capital has begun to roll into oil (price expected to remain higher for a while), and out of both tech and the broader market indices. As soon as call availability tightens, capital will move into options on the oil names themselves . To lower the spot crude price; spot/forward-rate parity requires a sale of ATM spot (higher call volume) and a purchase of longer term forwards. The record volumes are 'cause the US has been trying to game the market down . The rotation is draining liquidity out of the broader indices and crypto markets, so expect price drops. The USD 115 B of tariff refunds will go primarily to US importers; but not until another 30 days+ yet. Opportunity. Disruption is now spiralling and spreading. Absent a material change, USD 5/gallon gasoline in most US states is maybe two weeks away. SD Edited March 8 by SharperDingaan
StevieV Posted March 8 Posted March 8 What do you think about slightly longer term SD? As in summer/fall 26. Futures have been in strong backwardation. WTI averaged mid and upper 70s in 23 and 24 and mid 90s in 22. For the economy generally, in isolation, 80s average in 26 shouldn’t be too concerning. There are prices that would be. Also, nothing is in isolation and 60 to 100+ in a couple weeks is different than a more measured rise. I am long some Canadian producers - OBE, WCP.to, CJ.to.
SharperDingaan Posted March 8 Posted March 8 6 hours ago, StevieV said: What do you think about slightly longer term SD? As in summer/fall 26. Futures have been in strong backwardation. WTI averaged mid and upper 70s in 23 and 24 and mid 90s in 22. For the economy generally, in isolation, 80s average in 26 shouldn’t be too concerning. There are prices that would be. Also, nothing is in isolation and 60 to 100+ in a couple weeks is different than a more measured rise. I am long some Canadian producers - OBE, WCP.to, CJ.to. It comes down to how high spot goes, how much a producer chooses to hedge, and what they intend to do with that hedged cashflow. This evening WTI is USD 107, and Brent is USD 109. Hard to see a practical reopening of the SOH this week, and spot WTI NOT moving up to USD 120/bbl+ as the lack of egress shuts more producers in. If so, the entire futures curve moves up USD 30/bbl+, and out further. Of course it will not last …. so the gamechanger is how much production a producer hedges, when, and why . A hedge at USD 125/bbl, when budget is USD 75/bbl, is extremely attractive. A gross USD 50 spread on 1,000 bbl/day for 30 days is an extra USD 1.5M/month (CAD 2.1M). Were a CJ able to do this on the 6,500 bbl/day of Reford 1 production for six months … they would gross another USD 58.5M (CAD 82M) [1.5 x 6.5 x 6] ... or a very material portion of the cost of Reford 2. Clearly, the when and why matters. The big beneficiary is M&A, as the wise acquirer has strong incentive to immediately hedge up to 50% of the targets production. Higher prices for assets translating into higher valuations across the sector, and incentivising earlier rotation into o/g. There is a reason why all have a close eye on a Waterous, etc. 18 months out … fewer and more profitable players within the WCSB, and higher dividends. Until then, look to trading gains. SD
Xerxes Posted March 9 Posted March 9 Good one on the Gulf https://podcasts.apple.com/ca/podcast/smartermarkets/id1541404399?i=1000753773934
UK Posted March 9 Posted March 9 3 hours ago, Xerxes said: Good one on the Gulf https://podcasts.apple.com/ca/podcast/smartermarkets/id1541404399?i=1000753773934 Summary by Gemini: The conclusions drawn by Helima Croft in this discussion center on the shift from "geopolitical risk" to "active disruption." Based on her analysis, here are the primary conclusions regarding the conflict and the markets: 1. The End of the "Risk Premium" Era Croft concludes that the market can no longer treat the Middle East conflict as a theoretical "risk premium." With active strikes and retaliation occurring, the market has moved into a phase of real supply disruption. The primary conclusion is that volatility is here to stay as long as the conflict remains "uncontained." 2. The Strait of Hormuz is the Ultimate "Tripwire" The most critical conclusion for energy markets is that the Strait of Hormuz remains the single most important inflection point. Croft notes that while Iran may not physically "close" the strait, their ability to harass shipping and drive up insurance costs creates a "de facto" closure. If shipping through the strait is significantly curtailed for an extended period, she concludes that oil prices could surge into the $100s per barrel. 3. Limited "Shock Absorbers" in the Market A major conclusion is the fragility of the global supply cushion. Croft points out: OPEC+ Spare Capacity: Most producers are already at their limit; only Saudi Arabia has significant spare capacity to offset a major Iranian outage. U.S. Constraints: While the U.S. is a top producer, it cannot quickly ramp up enough production to stabilize a global shock caused by a regional war. 4. Shift in U.S. Strategy Croft concludes that the U.S. administration is in a "geopolitical bind." The Dilemma: They must balance the desire to punish Iran with the political necessity of keeping domestic gas prices low (especially ahead of elections). Result: This leads to "reactive" rather than "proactive" policy, which may increase market uncertainty as the U.S. oscillates between diplomacy and military strikes. 5. Systematic vs. Geopolitical Shock Ultimately, Croft suggests that for the global economy, this is currently a "geopolitical shock" rather than a "systemic crisis"—but that distinction depends entirely on duration. If the conflict lasts weeks or months rather than days, it will transition into a systemic crisis that could reignite global inflation and threaten the economic recovery.
SharperDingaan Posted March 9 Posted March 9 (edited) It would seem that the US has panicked, and that the SOH will remain closed for much of this week. Pre release 'discussion', the Dow was trending towards an opening down 1100 points .... now it's down only 600. .. but on words only. Feeling lucky ?? The US doesn't have the heavy oil required, and those SPR releases will go to the home countries first. Unless sanctioned heavy is now allowed in quantity (Russian & Iranian), this isn't going to work. It's also a very simple matter to change ownership of both ship and cargo .... and suddenly there is no Iranian oil .... it's comes from somewhere else Stress the heavy and the cost of downstream refined product goes up .... USD 5/gallon gasoline. Great time for Canadian heavy SD Edited March 9 by SharperDingaan
StevieV Posted March 9 Posted March 9 12 hours ago, SharperDingaan said: It comes down to how high spot goes, how much a producer chooses to hedge, and what they intend to do with that hedged cashflow. This evening WTI is USD 107, and Brent is USD 109. Hard to see a practical reopening of the SOH this week, and spot WTI NOT moving up to USD 120/bbl+ as the lack of egress shuts more producers in. If so, the entire futures curve moves up USD 30/bbl+, and out further. Of course it will not last …. so the gamechanger is how much production a producer hedges, when, and why . A hedge at USD 125/bbl, when budget is USD 75/bbl, is extremely attractive. A gross USD 50 spread on 1,000 bbl/day for 30 days is an extra USD 1.5M/month (CAD 2.1M). Were a CJ able to do this on the 6,500 bbl/day of Reford 1 production for six months … they would gross another USD 58.5M (CAD 82M) [1.5 x 6.5 x 6] ... or a very material portion of the cost of Reford 2. Clearly, the when and why matters. The big beneficiary is M&A, as the wise acquirer has strong incentive to immediately hedge up to 50% of the targets production. Higher prices for assets translating into higher valuations across the sector, and incentivising earlier rotation into o/g. There is a reason why all have a close eye on a Waterous, etc. 18 months out … fewer and more profitable players within the WCSB, and higher dividends. Until then, look to trading gains. SD CJ raised their dividend too quickly and too high. Left them too tight for both the dividend and the SAGD projects. But they appear to have done a fantastic job on Redford 1 - ahead of schedule and above advertised production. I believe they are unhedged. So, some period of higher realized prices with Redford 1 operating should put them in good shape for Redford 2, as you suggest. If that goes as smoothly as 1 they’ll be in a much better position to sustain the dividend and have some flexibility
Dalal.Holdings Posted March 9 Posted March 9 Oil is up quite quickly. Usually it pops up like this and then grinds lower. Once it gets much lower, a bunch of people who were bullish oil will claim they sold out near the top or wrote some calls, etc--all with the benefit of hindsight. If oil goes up, they will of course claim they held (again with the benefit of hindsight). It does seem like a good time to fade the rally if you held (though a lot of oil stocks like OXY haven't moved considerably) If helicopters can stop the drone threat cheaply and Iran's ballistic missile capabilities are eroded, then ship traffic is likely set to resume quickly. The Gulf states are basically warning Iran that if attacks on them continue, they will have to join the war...
SharperDingaan Posted March 9 Posted March 9 1 hour ago, StevieV said: CJ raised their dividend too quickly and too high. Left them too tight for both the dividend and the SAGD projects. But they appear to have done a fantastic job on Redford 1 - ahead of schedule and above advertised production. I believe they are unhedged. So, some period of higher realized prices with Redford 1 operating should put them in good shape for Redford 2, as you suggest. If that goes as smoothly as 1 they’ll be in a much better position to sustain the dividend and have some flexibility Q4 reporting this week should be illuminating SD
SharperDingaan Posted March 9 Posted March 9 (edited) 17 minutes ago, Dalal.Holdings said: The Gulf states are basically warning Iran that if attacks on them continue, they will have to join the war... You might want to keep in mind that SPR releases will be via oil-swaps and futures delivery. Today's China SPR sold to a Gulf State at today's price, in return for a higher volume futures delivery at price Y some months from now. Iranian crude included ...... with settlements processed via the Chinese banking system. Lots of crude ... far away from US/Israeli attack. That same system that is processing for Russia ... as sanctions relief does not include insurance/settlement processing though the western rails. Squeeeze ... the Orange SD Edited March 9 by SharperDingaan
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now