Energy Sector

[Spekulatius]

12 minutes ago, Marco Van Basten said:

Can they be buried underground?  

Yes, but it takes longer and is more expensive. The substations are large and I don’t think they can be simply put underground and hence still could be targets. They can be hardened against drone attacks.

[SharperDingaan]

1 hour ago, Marco Van Basten said:

Can they be buried underground?  

 

Not much point when the pipe itself, and oil storage facilities are all above ground. Pipe just changes the egress point; if that egress is subsequently blocked, the pipe becomes 'shut-in' and pretty useless.

 

Also keep in mind that the much touted Iran/US MOU is not the end of the war either, it is just a temporary cease fire and rounds of nuclear negotiations at some targeted future date. Other than rotation, it is unlikely that most of the US task force and aircraft are returning home anytime soon.

 

SD

[Stuart D]

Change of tune from chevron CEO, now saying oil markets might now be ok until September.

Edited yesterday at 01:05 AM by Stuart D

[ratiman]

If we get a 60 day window why wouldn't everybody scramble to top up their inventory? We might go right back to a blockade after 60 days and presumably China and US won't be drawing down SPRs during the 60 day window, if anything they will be building them back up. So if that is the case why wouldn't oil go UP if there's a deal? 

Edited 14 hours ago by ratiman

[TwoCitiesCapital]

On 6/2/2026 at 8:00 PM, Blake Hampton said:

 

I agree over the long-term. But what about deflation?

   "History tells the story. In the United States, we have had decades of good growth without inflation—in the 1950s and early 1960s, and again in the 1990s through the early 2000s. Those years of stability were also marked by eight recessions, mostly quick, that posed no risk of deflation.
    Only once in the past century, in the 1930s, have we had deflation, serious deflation. In 2008-2009 there was cause for concern. The common characteristic of those two incidents was collapse of the financial system."

— Paul Volcker, Keeping At it

Add to that list 2020 since Volcker died in December of 2019.

The hallmark of a systemic credit crisis is extreme deflation. The only asset you can count on not collapsing in price during a crisis like that is cash.

 

There's a reason deflation hasn't happened since the Great Depression and that inflation was the escape valve (devaluing against gold and then mass austerity of personal consumption to rebuild savings and investment in the war effort). 

 

Once we found Keynesian religion, and realized we could just print our way out of any mess (or default against the obligations of a hard currency), we did. 

 

I used to think along the same lines as you  - that debt was deflationary. And it is - for anyone who can't print their own currency. But we're the latter and currently have forced buyers of the USD regardless of how much we print (at least for now), so deflation aint going to happen. 

 

 

On 6/13/2026 at 7:30 AM, SharperDingaan said:

 

It takes a lot longer than a year to build new pipe, and the terminal infrastructure required to accommodate it. Most would assume 24-30 months minimum, inclusive of upgrades, testing, and line fill.

 

SD

 

Not to mention that other infrastructure in the area has been damaged/destroyed by Iran and nothing says new infrastructure wouldn't be under similar threats. 

 

I don't know what the right price for oil is - but if we could hit $150/barrel in 2008, I don't see why $150/barrel today is out of the question. It would still be a significantly lower inflation adjusted top from 2008, comparable to the Russia/Ukraine episode, and reflects the ongoing supply shock, the increased insurance premium, AND that nations will need to rebuilt some level of inventories even if traditional drivers of demand fall off. 

 

If oil wasn't going to head higher, I don't know why we're doing all of these reserve releases and jawboning trying to prevent it. I think it's clear that the price has been artificially suppressed and the only questions are by how much, and for how long, and how high will it go when that suppression stops. 

Edited 9 hours ago by TwoCitiesCapital

[Dalal.Holdings]

https://www.wsj.com/world/middle-east/iran-threatens-to-pull-out-of-talks-after-israel-strikes-beiruts-outskirts-d0390e22

 

Quote

Trump said the Strait of Hormuz would be reopened on Friday, indicating in a social-media post the time was needed “for purposes of mine removal.” In an earlier post, Trump said that Iran’s restrictions on shipping in the Strait and the U.S. naval blockade on Iran would be simultaneously and immediately lifted.

 

[Gregmal]

Oils still 20% higher than pre war and ...."oil hasn't gone up"...

[Spekulatius]

PBR.A back below $12 and I will reload.

[Blake Hampton]

We made a deal with Iran. Whoopee fucking ding dong.

[Blake Hampton]

7 hours ago, TwoCitiesCapital said:

There's a reason deflation hasn't happened since the Great Depression and that inflation was the escape valve (devaluing against gold and then mass austerity of personal consumption to rebuild savings and investment in the war effort). 

 

Once we found Keynesian religion, and realized we could just print our way out of any mess (or default against the obligations of a hard currency), we did. 

 

I used to think along the same lines as you  - that debt was deflationary. And it is - for anyone who can't print their own currency. But we're the latter and currently have forced buyers of the USD regardless of how much we print (at least for now), so deflation aint going to happen. 

 

Money in our economy is primarily credit. When there is a run on the system, and the means for originating credit come to a halt, deflation is the only outcome due to the money supply rapidly shrinking.

 

2008 and 2020 were both instances of the Federal Reserve and Treasury racing against deflation in order to stave off collapse of the financial system.

[TwoCitiesCapital]

23 minutes ago, Blake Hampton said:

 

Money in our economy is primarily credit.

 

Yes. But we've seen what happens when it's time to collect. The losses are socialized and the government prints and deflation is avoided. 

 

It's not morally right. And you should invest in the companies owing the credit. But as long as we're the reserve currency, we'll print. 

 

23 minutes ago, Blake Hampton said:

When there is a run on the system, and the means for originating credit come to a halt, deflation is the only outcome due to the money supply rapidly shrinking.

 

No, printing is the alternative outcome to offset the contraction in credit. And they'll print. 

 

23 minutes ago, Blake Hampton said:

 

2008 and 2020 were both instances of the Federal Reserve and Treasury racing against deflation in order to stave off collapse of the financial system.

 

And they succeeded both times. And will do again.... because they'll print. 

Edited 1 hour ago by TwoCitiesCapital

[Blake Hampton]

4 minutes ago, TwoCitiesCapital said:

And they'll print. 

 

And you're right, they will print.

 

But it's not that simple. The Federal Reserve can't fix a massive credit crisis just by providing liquidity to the Treasury market. Many of the systemic problems during times of extreme stress require fiscal policy, an act of Congress. The Federal Reserve is simply a lender of last resort; they legally can't spend money.

 

Have you taken a good look at our Congress lately? I've been more impressed by the intellectual display of chimps at my local zoo. A fiscal crisis would leave everyone with nothing but bad options. I do not expect good judgment to come from our current government.

[Blake Hampton]

If anything, all of this takes time.

 

I'm certain nothing will happen until we're peering into the abyss.

There will be opportunities.

[TwoCitiesCapital]

35 minutes ago, Blake Hampton said:

But it's not that simple. The Federal Reserve can't fix a massive credit crisis just by providing liquidity to the Treasury market.

 

But the Treasury can - by sending direct checks to consumers (2020) or by writing checks to take over companies (Fannie/Freddie), or by coercing corporations to buy out failing competitors, or by deficit spending in the trillions. All while Fed Reserve holds rates at 0% and buys treasuries. 

 

35 minutes ago, Blake Hampton said:

Many of the systemic problems during times of extreme stress require fiscal policy, an act of Congress. The Federal Reserve is simply a lender of last resort; they legally can't spend money.

 

You tell me which Congressman, elected by popular vote, is gonna say "fuck it - we've got to do the difficult thing and deal with the pain instead of the easy thing and print"

 

And not just one - but enough of them to push through legislation. America doesn't have the will to do the hard/right thing 

 

35 minutes ago, Blake Hampton said:

 

Have you taken a good look at our Congress lately? I've been more impressed by the intellectual display of chimps at my local zoo. A fiscal crisis would leave everyone with nothing but bad options. I do not expect good judgment to come from our current government.

 

Exactly. Which is why it's easy to know they'll do the easy thing - and print. 

Edited 25 minutes ago by TwoCitiesCapital