Mephistopheles Posted April 29 Posted April 29 On 4/26/2026 at 6:58 PM, Stuart D said: Shouldn’t this chart alone (new inventory low’s) be sending crude prices to all time high’s? And the counter case? Iran immediately surrenders and guarantees permanent SoH peace, the US and NATO sweep all mines, production restarts and increased global production immediately restarts and restocks inventories? @cubsfan, appreciate the pushback. My timeline is very biased towards ‘oil prices will be higher’, so im keen to hear other views. Even if there is an immediate surrender, those inventories do need to be refilled, and will probably be filled higher than previous levels as now everyone is afraid of another crisis. There’s a sweet spot for a ceasefire where 1) enough inventories have been knocked out and 2) demand destruction is kept at bay. Beyond that, the longer the war drags on, the more likely we see demand destruction/recession and lower oil prices. I have no idea what that sweet spot is, but for now I continue to hold October WTI futures which have moved from $70 to $80. Of course, the real concern here is refined product pricing which has gone through the roof. That demand destruction event may happen sooner than people think. It’s amazing that the S&P500 continues to march higher amongst the very real recession risk that does exist. Even when the strait fully opens, when tankers have no more psychological fear of being hit, flow rate is what matters. It takes time for all that oil, LNG, and refined products to 1) get back to normal production but mostly 2) to make its way to end users. I just think when all this settles out, people will want to stock up for the next war, and oil prices will be a bit higher to reflect that. Kind of like hurricane insurance rates shoot up after major hurricanes. I’m not an expert by any means but I just feel the risk reward is reasonable at the $80 October futures.
rogermunibond Posted April 29 Posted April 29 Brent curve doesn't get back to where it was pre Iran War until 2030-2032
Cor Posted April 30 Posted April 30 On 4/27/2026 at 8:05 AM, SharperDingaan said: The near term bear case is lower prices relative to yesterday; at best, maybe -10%, and for a very short time only. Simply 'cause it will take time for already loaded ships already in the SOH to reach their destinations .... and until they arrive, everybody has to continue bidding up for the very limited non SOH supply. The longer term bear case is lower prices from permanent substitution and new non SOH supply. Years away, as it will take time to build out the required incremental egress infrastructure ... for supply to again overwhelm demand. The MOMO bear case is a panic selloff that drags o/g down with it. Most everyone would simply use the volatility to rotate into o/g, pushing hard against the selloff. SD Hey SD, did you see earnings for PD? This seemed like no so good news? “Net earnings attributable to shareholders in the first quarter was $17 million compared with $35 million in 2025. Our lower net earnings in 2026 was due to higher share-based compensation expense and increased depreciation expense from the change in useful life estimates.“ Saw PD was down 10% on the sell off as compared to other Canadian small caps. Are you still holding this one?
SharperDingaan Posted April 30 Posted April 30 (edited) 2 hours ago, Cor said: Hey SD, did you see earnings for PD? This seemed like no so good news? “Net earnings attributable to shareholders in the first quarter was $17 million compared with $35 million in 2025. Our lower net earnings in 2026 was due to higher share-based compensation expense and increased depreciation expense from the change in useful life estimates.“ Saw PD was down 10% on the sell off as compared to other Canadian small caps. Are you still holding this one? We have been out of PD for some time; switched to a bar-bell between ESI, and a significant position in a junior driller. Periodic swing trades around ESI to continually raise the house money funded portion. The junior driller as another life changing sidecar if it works out; a tax write-off if it doesn't. The junior preferred over options, to avoid the constant time erosion. Within the WCSB, drilling is consolidating into fewer players with better tech and bigger machines. Less movement between sites (Mullen Transport); as there is now more drilling from common pads, over both longer lengths, and different depths. Driller expertise, site experience, and efficiencies speeding up completion times as well; obsolesce shrinking the useful life of older rigs (PD). At current strip, it is a lot more attractive to grow production via bolt-on field acquisition and consolidation; then produce/drill the bigger holding more efficiently afterwards. Old collection facilities, and old wells often re-purposed at low cost (via old rigs) for water-flood/CO2 injection to lower depletion rate. Sadly, there is little incentive to aggressively grow via the drill bit; until better visibility around the Iran War, and new BC tidewater egress becomes available. Hence .... a quiet summer for the drillers; fall/winter a little busier should M&A step up. Good luck! SD Edited April 30 by SharperDingaan
cubsfan Posted April 30 Posted April 30 On 4/26/2026 at 5:58 PM, Stuart D said: @cubsfan, appreciate the pushback. My timeline is very biased towards ‘oil prices will be higher’, so im keen to hear other views. Worth checking out this view:
Stuart D Posted April 30 Posted April 30 2 hours ago, cubsfan said: Worth checking out this view: Thank you - I’ll add him as a follow on Twitter.
Stuart D Posted May 1 Posted May 1 1 hour ago, Spekulatius said: SOH opening by end of June went from ~90% to 47%. Not open by the end of June, that’s 8-wk’s of ~20m barrel draws in the US, ~160m total. Assuming last week is the new norm (not sure if it is). That’s crazy & can’t (or won’t) happen right?
SharperDingaan Posted May 1 Posted May 1 (edited) 15 hours ago, Stuart D said: That’s crazy & can’t (or won’t) happen right? There are reports in various places that the US SPR is intentionally going to be drained flat, and potentially disbanded (no refill). Future reliance placed on a domestic ramp up of production when required, as is the case in Canada. Significant coming change for NA if it turns out to be true. SD Edited May 1 by SharperDingaan
Spekulatius Posted May 2 Posted May 2 (edited) On 4/30/2026 at 9:48 PM, Stuart D said: Not open by the end of June, that’s 8-wk’s of ~20m barrel draws in the US, ~160m total. Assuming last week is the new norm (not sure if it is). That’s crazy & can’t (or won’t) happen right? Why do you think it won’t happen? The consensus of people betting their money seems to be that it will. Iran and the USA are now in an economic trench warfare situation and we know that trench warfare tends to last a long time. I think there is a perception that each side has to make a deal. Iran because their storage for crude will full in a few weeks which means that their oil wells will get damaged due to back pressure. The USA because the closure of the straight creates an economic problem and maybe a disaster if not so much in the USA itself but elsewhere (Asia foremost). This will politically isolate the USA. the Gulf states are also hard hit as they can’t export, tourism is probably close to zero and their whole economy will be in shambles. Edited May 2 by Spekulatius
cubsfan Posted May 2 Posted May 2 1 hour ago, Spekulatius said: The USA because the closure of the straight creates an economic problem and maybe a disaster if not so much in the USA itself but elsewhere (Asia foremost). This will politically isolate the USA. the Gulf states are also hard hit as they can’t export, tourism is probably close to zero and their whole economy will be in shambles. The Gulf States want this problem solved for good - and the job to be finished whether it is by military or economic strangulation of Iran. The dumbest move the Iran Regime ever made was bombing the UAE and Gulf States. Just the UAE alone, Iran launched 500+ ballistic missiles and 2000+ drones.... Very stupid move against the Gulf States. Iran gave Trump and Israel a tremendous gift.
Stuart D Posted May 3 Posted May 3 9 hours ago, Spekulatius said: Why do you think it won’t happen? The consensus of people betting their money seems to be that it will. Iran and the USA are now in an economic trench warfare situation and we know that trench warfare tends to last a long time. I think there is a perception that each side has to make a deal. Iran because their storage for crude will full in a few weeks which means that their oil wells will get damaged due to back pressure. The USA because the closure of the straight creates an economic problem and maybe a disaster if not so much in the USA itself but elsewhere (Asia foremost). This will politically isolate the USA. the Gulf states are also hard hit as they can’t export, tourism is probably close to zero and their whole economy will be in shambles. What you’re saying makes sense. Both sides can hold on for a while. Continued oil draws eventually drives oil prices way up. I’m sceptical of the US’s stomach for massively higher prices but then again, I also thought Trump would have bailed out ~1-month ago and I was wrong on that.
Dalal.Holdings Posted May 3 Posted May 3 (edited) On 5/2/2026 at 12:11 PM, Spekulatius said: Why do you think it won’t happen? The consensus of people betting their money seems to be that it will. Iran and the USA are now in an economic trench warfare situation and we know that trench warfare tends to last a long time. I think there is a perception that each side has to make a deal. Iran because their storage for crude will full in a few weeks which means that their oil wells will get damaged due to back pressure. The USA because the closure of the straight creates an economic problem and maybe a disaster if not so much in the USA itself but elsewhere (Asia foremost). This will politically isolate the USA. the Gulf states are also hard hit as they can’t export, tourism is probably close to zero and their whole economy will be in shambles. I think it's clear the "hard line" regime in Tehran is already cracking under the blockade: https://www.bloomberg.com/news/articles/2026-05-03/trump-weighs-iranian-peace-offer-without-ruling-out-more-strikes?srnd=homepage-americas Quote Iran’s suggestions include setting a one-month deadline on talks for a deal to reopen the Strait of Hormuz and end both the US naval blockade and the fighting in Iran and Lebanon, Axios reported, citing two people familiar with the matter. The U.S. economy seems to have largely shrugged off the Strait closure while Saudis, Iraqis, and UAE bypass the Strait with pipelines and Iraq even sending truck fleet through Syria for loading oil in Mediterranean with potential to restart other pipelines through Syria: https://english.aawsat.com/business/5262888-syria’s-baniyas-begins-loading-iraqi-oil-shipments-re-export A lot of the producers are finding ways around the Strait while Iran's oil is blockaded and threatens to induce long term damage to its wells. Iran is getting squeeze more than anyone now...Trump can sit and wait. The other thing is that in the current ceasefire situation, Iran is no longer attacking oil infrastructure across the Gulf--that was the real nightmare scenario which the ceasefire has halted...so basically Iran is seems backed into a corner and must yield on its nuclear program... Next few years you will see these "closed" and other pipelines built and Iran's leverage over the Strait will get even weaker: Edited May 3 by Dalal.Holdings
Dalal.Holdings Posted May 3 Posted May 3 I found these discussions to be high quality: Former senior CIA guy: Retired U.S. Rear Admiral:
influx Posted May 3 Posted May 3 Folks, just because we (may) want USA to win, it doesn't mean it's winning or the blockade makes sense (ex post reasoning; financial/economics 101 doesn't work here 100% of the time). If it did, it would have been done before the war or at the beginning. We are reasoning based on our principles and way of life, that financial/economics 101 pain will work. Instead, reason from Iran's point of view (it's existential and they've been under sanctions for a long time). Just a reminder re Iran's willingness not to produce and how long it went for in the past:
Dalal.Holdings Posted May 3 Posted May 3 1 minute ago, influx said: Folks, just because we (may) want USA to win, it doesn't mean it's winning or the blockade makes sense (ex post reasoning; financial/economics 101 doesn't work here 100% of the time). If it did, it would have been done before the war or at the beginning. We are reasoning based on our principles and way of life, that financial/economics 101 pain will work. Instead, reason from Iran's point of view (it's existential and they've been under sanctions for a long time). Just a reminder re Iran's willingness not to produce and how long it went for in the past: IRGC guys expect to get paid to show up for work. If the oil ain't flowing, they ain't getting paid. Not only that, but the blockade seems to be doing what no amount of sanctions ever could: nearly completely cutting off Iranian exports AND imports... The blockade seems to be working based on the simple fact that Iran is now the one proposing we go back to the negotiating table...
cubsfan Posted May 3 Posted May 3 3 minutes ago, Dalal.Holdings said: The blockade seems to be working based on the simple fact that Iran is now the one proposing we go back to the negotiating table... It's so simple.
Parsad Posted May 4 Posted May 4 8 hours ago, cubsfan said: Now that is a very interesting comment Blake. The last thing I wish to do is post "Ai Slop". How do you reach that conclusion -- or do you just disagree with the content - which I find much more likely. I watched in its entirety - and the impacts/risks on oil make total sense to me. The geopolitical aspects make tremendous sense - and everyone and their brother are interested in "when and under what circumstances all this will end". It was totally AI done...please use main stream sources or non-AI media. Cheers!
influx Posted May 4 Posted May 4 12 hours ago, Dalal.Holdings said: IRGC guys expect to get paid to show up for work. If the oil ain't flowing, they ain't getting paid. Not only that, but the blockade seems to be doing what no amount of sanctions ever could: nearly completely cutting off Iranian exports AND imports... The blockade seems to be working based on the simple fact that Iran is now the one proposing we go back to the negotiating table... OK, let's watch
influx Posted May 4 Posted May 4 14 hours ago, cubsfan said: It's so simple. BTW, please tell when would you consider this a failed strategy - how long should we wait? 2-3 weeks ? 5-6 weeks? 3 months? @Dalal.Holdings too
cubsfan Posted May 4 Posted May 4 3 hours ago, influx said: BTW, please tell when would you consider this a failed strategy - how long should we wait? 2-3 weeks ? 5-6 weeks? 3 months? @Dalal.Holdings too Not having nukes for a decade or two is worth some pain. If it takes a month or two, it would not surprise me - but a critical time comes up in just 2/3 weeks when Iran is faced with well shutdowns due to no storage. No money to pay people, frozen banking assets, secondary sanctions will cause tremendous havoc. The only failed strategy is if Iran can break the blockade and American soldiers start dying, which I find highly unlikely.
Dalal.Holdings Posted May 4 Posted May 4 5 hours ago, influx said: BTW, please tell when would you consider this a failed strategy - how long should we wait? 2-3 weeks ? 5-6 weeks? 3 months? @Dalal.Holdings too I would consider it successful if the U.S. achieves its key objective: removing Iran's ability to build a nuclear weapon while keeping Gulf states' oil and gas assets intact and operating. Everything else is mostly noise. The Strait is being bypassed by an increasing amount of oil lately and global producers are exploiting high prices by raising their own production. Iran is no longer attacking Gulf assets due to the ceasefire. As to timeline, it's tough to say and I'm not sure it really matters. The longer the Strait remains closed, the more Gulf countries find & invent ways to bypass it (they already are). The longer it remains closed, the more other producers outside the region produce (they already are). In other words, the longer the Strait remains closed, the weaker Iran's leverage over the Strait becomes. Meanwhile, the U.S. can continue its blockade of Iran indefinitely which would prove catastrophic for Iran's economy and cause irreversible damage to its wells.
Dalal.Holdings Posted May 4 Posted May 4 (edited) https://www.wsj.com/world/middle-east/iran-defies-trump-and-tightens-its-grip-on-hormuz-01a4e32b?mod=hp_lead_pos1 Looks like we now have cracks forming in Iran's ability to keep the Strait closed: Quote U.S. military forces including warships and aircraft actively protected several commercial vessels from Iranian attacks, a senior U.S. official said. Sailors reported witnessing a drone strike on the JV Innovation tanker and military jets buzzing overhead. The American military said it successfully guided two U.S.-flagged commercial ships through the strait, marking the start of Trump’s operation to free up international traffic in the strategic waterway. U.S. forces didn’t physically escort the merchant vessels, but instead established a defensive shield using warships and aircraft to protect them, the senior official said. Later, U.S. Navy guided-missile destroyers supporting the effort sailed through the strait, the senior official said. The warships are currently operating in the gulf, according to the U.S. Central Command, which oversees the Middle East. “American forces are actively assisting efforts to restore transit for commercial shipping,” Centcom said. This looks like it could be the beginning of U.S. operations to pry the Strait open... Edited May 4 by Dalal.Holdings
SharperDingaan Posted May 4 Posted May 4 (edited) You might want to use the opportunities to lighten holdings this week While the SOH may remain closed; once the number of transits starts rising ... crude prices are coming down. SD Edited May 4 by SharperDingaan
influx Posted May 4 Posted May 4 Something on the other end (ignore their hyperbolic words): https://mearsheimer.substack.com/p/president-trump-thinks-the-us-can
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