Energy Sector

[thowed]

2 hours ago, kab60 said:

You should never listen to oil bulls. If anyone had much success trading the worlds largest and most liquid commodity, they wouldn't spend all day on X.

 

Amazing - very good.  Andurand not on there, though can't work out how he's fared long-term - so volatile!

 

Also in IPCO so agree - hope it will be another long-term Lundin success story.

 

[SharperDingaan]

It's O/G, by all means feel free to take the pretty girls out for a spin, but ya dance with the one that brung ya. Pick a name or two and stay with them. Thereafter swing trade the volatility, around those same names. Knowing those names well, mitigating much of the trading risk.

 

SD

 

Edited Thursday at 01:41 PM by SharperDingaan

[Spekulatius]

Trump made the mistake not to refill the strategic crude reserves. He had plenty of time at good prices to do so , but I guess it was important to push crude prices even lower. 

[Dalal.Holdings]

https://www.nytimes.com/2026/06/10/world/middleeast/trump-oil-iran-strait-hormuz.html

 

Oil has been leaking through and around the Strait in increasing amounts as this conflict drags on...

 

China's imports have been way down.

 

As noted, it's in the interests of the most powerful nations that the Spice Must Flow and so Flow the Spice will

[kab60]

1 hour ago, Dalal.Holdings said:

https://www.nytimes.com/2026/06/10/world/middleeast/trump-oil-iran-strait-hormuz.html

 

Oil has been leaking through and around the Strait in increasing amounts as this conflict drags on...

 

China's imports have been way down.

 

As noted, it's in the interests of the most powerful nations that the Spice Must Flow and so Flow the Spice will

The spice must flow, and a bit does, but it's still the biggest supply shock in history. Inventories, not least in China, seem to be doing the heavy lifting. That's not infinite though. And no amount of jawboning will change the physical realities. One risk to Trump is that while he has had some success in talking down the price of oil, if he doesn't get the strait open, eventually that might backfire. E&P companies aren't eager to increase supply currently, given the risk of getting rugpulled (and investors feel the same way... Who wants to go big into energy now?). These prices are easy for the US economy to handle. But I still think the market is a bit complacent on a tail risk scenario where the Strait is closed for a long time. Not saying it is likely, but I don't think many oil companies price that option in.

Edited Thursday at 04:39 PM by kab60

[Spekulatius]

2 hours ago, Dalal.Holdings said:

https://www.nytimes.com/2026/06/10/world/middleeast/trump-oil-iran-strait-hormuz.html

 

Oil has been leaking through and around the Strait in increasing amounts as this conflict drags on...

 

China's imports have been way down.

 

As noted, it's in the interests of the most powerful nations that the Spice Must Flow and so Flow the Spice will

I think the flow through the SOH is still more than 80% down. Better than totally closed but not much.

Edited Thursday at 04:51 PM by Spekulatius

[Dalal.Holdings]

38 minutes ago, kab60 said:

The spice must flow, and a bit does, but it's still the biggest supply shock in history. Inventories, not least in China, seem to be doing the heavy lifting. That's not infinite though. And no amount of jawboning will change the physical realities. One risk to Trump is that while he has had some success in talking down the price of oil, if he doesn't get the strait open, eventually that might backfire. E&P companies aren't eager to increase supply currently, given the risk of getting rugpulled (and investors feel the same way... Who wants to go big into energy now?). These prices are easy for the US economy to handle. But I still think the market is a bit complacent on a tail risk scenario where the Strait is closed for a long time. Not saying it is likely, but I don't think many oil companies price that option in.

 

25 minutes ago, Spekulatius said:

I think the flow through the SOH is still more than 80% down. Better than totally closed but not much.

 

The problem is that the longer the Strait is closed, the more leakage: the more new pipelines are built, the more overland convoys, the more crazy Greek shippers willing to risk it and smash through the Strait, the more other oil fields around the world pick up the slack.

 

The ROI on building pipelines for the Gulf States is massive

 

Prewar, you had 20 million barrels/day going out of the Strait. Now, it is estimated that about half of that (9-10 million barrels/day) is coming out via pipelines (Saudi East-West does 7 million Barrels/day alone) and overland trucking from Iraq.

 

Then you have maybe 2 million barrels/day leaking directly out of the Strait with U.S. Centcom helping out and you get to a leakage of 11-12 million barrels per day or about half (or more) of prewar Hormuz exports. 

 

The pipeline news headlines are also growing:

 

https://www.wsj.com/world/middle-east/the-hormuz-squeeze-is-redrawing-the-oil-map-for-good-cf33d8c0

Quote

Saudi Arabia, the U.A.E. and Iraq are pouring money into pipelines, rail and storage to keep oil flowing even when the strait isn’t

Quote

Across the Gulf, governments are pouring billions into new oil pipelines, rail corridors and energy storage hubs to bypass the waterway in what is set to become one of the most durable outcomes of the conflict. The new energy links are part of a broader redrawing of the region’s logistics map, shifting trade toward trucking, rail and new ports.

https://africa.businessinsider.com/local/markets/europes-search-for-alternatives-to-russian-and-middle-eastern-gas-revives-two-african/lx8zxkj

Quote

Europe's search for alternatives to Russian and Middle Eastern gas revives two African pipelines worth $38 billion

 

Healthy systems are capable of adapting to shocks

 

Meanwhile, Iran's exports are taking a huge hit and their fields are liable to suffer irreversible damage under the U.S. blockade. In the end, waiting it out now seems to be the better option for the U.S...

 

What is additionally interesting is that China seems to be *cooperating* with this process

Edited Thursday at 05:16 PM by Dalal.Holdings

[yesman182]

35 minutes ago, Dalal.Holdings said:

What is additionally interesting is that China seems to be *cooperating* with this process

By cooperating do you mean lowering imports, or something else that I am missing? 

[kab60]

57 minutes ago, Dalal.Holdings said:

 

 

The problem is that the longer the Strait is closed, the more leakage: the more new pipelines are built, the more overland convoys, the more crazy Greek shippers willing to risk it and smash through the Strait, the more other oil fields around the world pick up the slack.

 

The ROI on building pipelines for the Gulf States is massive

 

Prewar, you had 20 million barrels/day going out of the Strait. Now, it is estimated that about half of that (9-10 million barrels/day) is coming out via pipelines (Saudi East-West does 7 million Barrels/day alone) and overland trucking from Iraq.

 

Then you have maybe 2 million barrels/day leaking directly out of the Strait with U.S. Centcom helping out and you get to a leakage of 11-12 million barrels per day or about half (or more) of prewar Hormuz exports. 

 

The pipeline news headlines are also growing:

 

https://www.wsj.com/world/middle-east/the-hormuz-squeeze-is-redrawing-the-oil-map-for-good-cf33d8c0

https://africa.businessinsider.com/local/markets/europes-search-for-alternatives-to-russian-and-middle-eastern-gas-revives-two-african/lx8zxkj

 

Healthy systems are capable of adapting to shocks

 

Meanwhile, Iran's exports are taking a huge hit and their fields are liable to suffer irreversible damage under the U.S. blockade. In the end, waiting it out now seems to be the better option for the U.S...

 

What is additionally interesting is that China seems to be *cooperating* with this process

8m barrels is still a massive supply shock. Yes, pipelines will be built. And I also own something which should benefit from RoW supply growth. But pipelines aren't quickly built. 

 

Another day, another deal. You might be right in Iranian oil fields, but same was said for Russia. I think these petro shit states usually find a way, and they are used to suffering. 

 

Hopefully, end is close. My thesis however is that it is in Irans interest to inflict serious damage on Trump, so the world knows they have a nuclear option in the future. But perhaps they, or himself, already did enough damage to approval ratings.

 

(My portfolio will do much better if I am wrong fwiw. I mostly own what others consider levered shitcos)

Edited Thursday at 06:02 PM by kab60

[Dalal.Holdings]

25 minutes ago, yesman182 said:

By cooperating do you mean lowering imports, or something else that I am missing? 

Yep

https://www.bloomberg.com/news/articles/2026-06-09/china-s-oil-imports-plunge-to-eight-year-low-on-war-disruptions

 

 

It's almost certain that Trump and Xi have discussed this and I'd say coordinated move by China despite China having to publicly act like a neutral/Iran-leaning party

[cubsfan]

4 hours ago, Spekulatius said:

Trump made the mistake not to refill the strategic crude reserves. He had plenty of time at good prices to do so , but I guess it was important to push crude prices even lower. 

 

He learned well from Biden - when the election prospects look shaky - drain the SPR and ask Powell for a rate cut.

[rogermunibond]

https://www.carlyle.com/sites/default/files/2025-03/Carlyle_The_New_Joule_Order.pdf

[SharperDingaan]

9 minutes ago, rogermunibond said:

https://www.carlyle.com/sites/default/files/2025-03/Carlyle_The_New_Joule_Order.pdf

 

Security of supply is just the latest 'factor'; it's always been there, it's just that nobody would put money into the necessity, until the SOH was closed ..... 'cause it was a 'non-risk'. Time goes by, lessons learn't get forgotten .

 

Balance of Payments is another; if you cant afford to import o/g, you go to some other energy source instead. Either change, or accept that the currency will devalue over time. Coal, solar, wind feeding into more EV, and another New Joule Order.    

 

Different strokes.

 

SD

[Spekulatius]

4 hours ago, cubsfan said:

 

He learned well from Biden - when the election prospects look shaky - drain the SPR and ask Powell for a rate cut.

Biden drained the crude reserve when was trading at $120+. This is exactly the case it was build for, imo. He was slowly adding buying back crude when it was much lower. Trump did nothing when crude was $70 and below which now looks like a mistake.

[cubsfan]

Just now, Spekulatius said:

Biden drained the crude reserve when was trading at $120+. This is exactly the case it was build for, imo. He was slowly adding buying back crude when it was much lower. Trump did nothing when crude was $70 and below which now looks like a mistake.

 

Biden drained the SPR to cover for his disastrous energy policies that drove the price of gas up for all Americans.  Everyone knows it.  

[Spekulatius]

7 minutes ago, cubsfan said:

 

Biden drained the SPR to cover for his disastrous energy policies that drove the price of gas up for all Americans.  Everyone knows it.  

BS, crude production in America reached record level under Biden. Disastrous is what is happening in Iran where we have no business to be whatsoever.

 

[Parsad]

8 hours ago, cubsfan said:

 

Biden drained the SPR to cover for his disastrous energy policies that drove the price of gas up for all Americans.  Everyone knows it.  

 

8 hours ago, Spekulatius said:

BS, crude production in America reached record level under Biden. Disastrous is what is happening in Iran where we have no business to be whatsoever.

 

 

Guys, move this discussion to the Politics thread!  Cheers!

[Spekulatius]

On 6/11/2026 at 1:03 PM, Dalal.Holdings said:

What is additionally interesting is that China seems to be *cooperating* with this process

Edited yesterday at 01:16 PM by Dalal.Holdings

China  has a mssice storage capacity for crude and crude products, That why they are able to reduce imports so much but this will only go so long.

 

I think they have storage capacity for almost a year with I’d consumption. Japan has similar storage capacity. The rest of Asia not so much and that’s why they have shortages already. 

[Dalal.Holdings]

8 hours ago, Spekulatius said:

China  has a mssice storage capacity for crude and crude products, That why they are able to reduce imports so much but this will only go so long.

 

I think they have storage capacity for almost a year with I’d consumption. Japan has similar storage capacity. The rest of Asia not so much and that’s why they have shortages already. 

Some estimates say more than a year, and that’s the thing: a year is long enough for new pipelines and other means to be built. A year of not shipping oil is catastrophic for Iran though.