Energy Sector

[Gregmal]

Was this just some roundabout way to steal the SOH...cuz starting a war, and then using the counterparty's response to then militarily seize the asset and then charge tolls is......a bit out there lmfao 

[SharperDingaan]

Sometime around the end of this month the US runs out of SPR reserves. Cushing (heavy oil) is already at below minimum level, with what's left as primarily sludge. Per the below, the four weeks is up Friday this week; assuming most of the SOH leakage over the last few weeks was US bound, give it another two weeks or so ... end of July.

 

https://thehill.com/policy/energy-environment/5928618-iran-deal-oil-reserves-g7/

 

VZ heavy oil supply is still very limited, Russian is essentially now only for domestic use; leaving mostly just Mexican and Canadian. And the US formally advising that it wants out of CUSMA ...... the art of the deal.

 

The SOH now economically locked solid, and the Red Sea under attack, there will be a lot less leakage covering shortfalls. There will soon need to be a 2nd coordinated global SPR release, and China will be reentering the market in the coming months. 

 

Absent a sudden change; one has to think that the line ups at the pump start happening by around late August through mid September, maybe earlier. 

 

Israeli elections are 27-October, with Netanyahu projected to lose. US midterm elections a week later, on 03-November, with Republicans projected to lose the house. Potentially, ground breaking change in 3-4 months, with Israeli results bleeding into the US outcome.

 

https://en.wikipedia.org/wiki/2026_Israeli_legislative_election

https://www.britannica.com/event/2026-US-midterm-elections

 

Hang on for the ride 

 

SD

Edited Monday at 10:30 PM by SharperDingaan

[Spekulatius]

10 hours ago, SharperDingaan said:

Only the US (The Guardian Of The Homuz Strait) .... can be this warped 

 

https://www.theglobeandmail.com/world/article-us-iran-attacks-kuwait/

“The U.S.A. will be, from this point forward, known as ’THE GUARDIAN OF THE HORMUZ STRAIT’, but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped.”

 

The Iranians charge maybe USD 3/bbl (high) ... or 4% on a USD 75/bbl; the US charges 20%. The strait is now guaranteed to remain closed, and the Gulf incentivized to support Iranian tolling of the strait instead.  

 

SD

May be he didn’t take his meds today. I would not worry to much, tomorrow is Taco Don Tuesday.

[SharperDingaan]

One could not make this sh1te up  ....

It is still illegal, unenforceable, 20% of the cargo value, and the Iranians have proposed to toll for 80% less ... The SOH remain locked, Red Sea egress remains threatened, and global reserves continue to drain.

 

"U.S. President Donald Trump on Tuesday backtracked on plans to charge ships for using the Strait of Hormuz, saying Gulf countries would instead invest in the United States." 

 

https://www.theglobeandmail.com/world/article-us-iran-war-strait-of-hormuz-2/

 

SD

Edited yesterday at 06:03 PM by SharperDingaan

[Artha158]

4D Chess. 

[SharperDingaan]

Fairly good summation of the SOH tolling 'thing'  ......

https://oilprice.com/Energy/Crude-Oil/Trumps-Hormuz-Toll-Could-Upend-Global-Energy-Trade.html

 

'Imposing a charge equivalent to one-fifth of the cargo’s value would achieve almost exactly the opposite. It would transform a temporary geopolitical disruption into a permanent structural cost, replacing the risk of an Iranian blockade with an American toll that could be just as damaging to energy markets. After spending enormous political, military and financial resources trying to preserve freedom of navigation, Washington would effectively begin charging the world for the freedom it claims to have restored.'

 

'The resulting levy on oil and gas could therefore approach $115 billion per year under fairly moderate assumptions, before including petrochemicals, fertilizers, containerized goods and other commercial cargo. This would not be a conventional shipping toll based on the cost of providing a service or maintaining infrastructure. It would be an ad valorem charge on some of the most important commodity flows in the global economy.'

 

'Washington would effectively be asserting that military protection of an international shipping route creates a right to collect a percentage of the goods passing through it. That principle would have implications far beyond the Gulf. If naval protection creates a right to tax commercial cargo, other military powers could make similar claims around contested maritime routes. The distinction between securing freedom of navigation and monetizing control over navigation would become dangerously blurred.'

 

'The direct 20% payment would therefore be only the beginning. War-risk insurance premiums would remain elevated, while shipowners could demand additional compensation for crews and vessels entering the region. Financing costs would increase because cargoes exposed to possible seizure, delayed payment or changing regulations would become riskier collateral. Traders would build larger margins into contracts, and buyers would seek supplies from routes not subject to arbitrary charges.'

 

One has to be truly gifted to f*** ** this badly  Gasoline prices have already begun to reflect the now higher crude prices; it is only a matter of time until US refineries start failing (running at capacity, no maintenance shutdowns), China has already further scaled back its refining, and the Saudi East West pipeline terminals at Yanbu are very vulnerable. Houthis don't have to destroy, continually damage enough to progressively reduce throughput .... is good enough.

 

Of course ...... most would expect Orange Boy to do whatever he can to lower gasoline prices, and the speculative community to squeeze US inventories as much as possible. Rising volatility, rapid change, pending mid-terms, and an 80 year old dealing with the pressure ..... what could possibly go wrong   

 

SD

 

[Sinbius]

The 20% toll is not "real"...

 

...it is just his style to negotiate and make people talk about himself...probably in his mind it is smart anchoring to a bad outcome to more easily achieve a "middle" ground (that is not middle but in his favor)...some people do it in negotiations...

[cubsfan]

6 minutes ago, Sinbius said:

The 20% toll is not "real"...

 

...it is just his style to negotiate and make people talk about himself...probably in his mind it is smart anchoring to a bad outcome to more easily achieve a "middle" ground (that is not middle but in his favor)...some people do it in negotiations...

 

The man loves to float trial balloons, as many politicians do.  He got his immediate feedback and changed course/strategy.  Some would say that this is "pragmatic" behavior.

[SharperDingaan]

41 minutes ago, Sinbius said:

The 20% toll is not "real"...

 

 

Quite agree .... as it's not collectable  Thing is .... every time a balloon is floated, it's a few more days of diminished traffic through the SOH before it is resolved, and a further draw on global SPR inventory. Jawbone all you want, but you fight against a price rise as that inventory depletes ... and have to fight harder the less inventory you have left.

 

Knocking out the bridges and power stations, just means the Iranians knocking out the same in US friendly states, not Iran magically coming to the table. It just evidences a trapped, drowning man, punching at every/anything, desperately searching for a way out of the tarpit. Let the man tire, and drown. 

 

One of the WWII takeaways was that bombing civilian infrastructure to diminish ability to produce more war material, just made the population more resistant ... even when their leadership were Nazi. Arguably, the same thing happening here. 

 

SD   

Edited 4 hours ago by SharperDingaan

[cubsfan]

15 minutes ago, SharperDingaan said:

 

Quite agree .... as it's not collectable  Thing is .... every time a balloon is floated, it's a few more days of diminished traffic through the SOH before it is resolved, and a further draw on global SPR inventory. Jawbone all you want, but you fight against a price rise as that inventory depletes ... and have to fight harder the less inventory you have left.

 

Knocking out the bridges and power stations, just means the Iranians knocking out the same in US friendly states, not Iran magically coming to the table. It just evidences a trapped, drowning man, punching at every/anything, desperately searching for a way out of the tarpit. Let the man tire, and drown. 

 

One of the WWII takeaways was that bombing civilian infrastructure to diminish ability to produce more war material, just made the population more resistant ... even when their leadership were Nazi. Arguably, the same thing happening here. 

 

SD   

 

You forgot the punchline SD.  After terrible bombing campaigns, the Nazis and Japan lost the war. Trump has given the IRGC every opportunity to submit.

 

Like Japan and Hitler - they refuse to..

 

The battle for control of the SOH is now on.  That's pretty much all that matters now.

[SharperDingaan]

2 hours ago, cubsfan said:

 

You forgot the punchline SD.  After terrible bombing campaigns, the Nazis and Japan lost the war. Trump has given the IRGC every opportunity to submit.  The battle for control of the SOH is now on.  That's pretty much all that matters now.

 

The battle for the SOH needs to have been decidedly won, and with traffic flowing freely both ways, by Nov-03 (US MidTerm) at the latest... 3 1/2 months. Should both Netanyahu and Trump lose their elections, it will be the allies withdrawing; and a global coalition stepping in to negotiate peace, security, reparations, and a return to 'normal' flows. 

 

The US and Israel have been at it for 4 1/2 months ... and the SOH is still closed; no reason to think that it will be much different come Nov-03. Were the Iranian people pre-disposed to overthrow the regime, it would have already happened; now the growing misery just makes the population want to see Trump gone (WW II bombing effect). 

 

Of course the SOH will reopen ..... just most likely with different players.

 

SD

Edited 1 hour ago by SharperDingaan

[cubsfan]

8 minutes ago, SharperDingaan said:

 

The battle for the SOH needs to have been decidedly won, and with traffic flowing freely both ways, by Nov-03 (US MidTerm) at the latest... 3 1/2 months. Should both Netanyahu and Trump lose their elections, it will be the allies withdrawing; and a global coalition stepping in to negotiate peace, security, reparations, and a return to 'normal' flows. 

 

The US and Israel have been at it for 4 1/2 months ... and the SOH is still closed; no reason to think that it will be much different come Nov-03. Were the Iranian people pre-disposed to overthrow the regime, it would have already happened; now the growing misery just makes the population want to see Trump gone by Persian New Year (WW II bombing effect). 

 

Of course the SOH will reopen ..... just most likely with different players.

 

SD

 

Let me clarify:  There have been 90 days of negotiations during a CEASEFIRE, along with, perhaps 40 days of actual fighting by the USA.  Imagine the sustained damage with just another 40 days of fighting, where Iran cannot touch the USA.

 

Bill Clinton brought Serbia to surrender with an 70 day bombing campaign, taking out power plants, electric grid, all the bridges and communication assets - once the Serbs showed they were not serious about peace with NATO.

 

Barrack Obama brought Libya to surrender with a non-stop 7 month bombing campaign - at the insistence of France and the Europeans.

 

You are now almost 30 years later - where the American military has "eyes in the sky" showing every single movement of assets in the IRGC. Furthermore, the precision weapons employed by the USA dwarf anything imaginable in the 1990's.

 

Notice that the IRCG has not touched Israel for months. Telling, that IRGC understands, unlike Trump, if they dare to launch missiles into Israel - Netanyahu knows where all their leaders/families live.  Trump will be far kinder to Iran's leadership than Bibi - while the Donald fights to restrain Bibi.

 

The momentum on controlling the SOH has shifted dramatically.

 

Time is not on the side of the IRGC, just like Libya and Serbia.

[SharperDingaan]

Hopefully the SOH opens soon, and the Bab-el-Mandeb (Red Sea) remains open; while views may differ as to mechanics, we have a market for that. We just don't have confidence in the dysfunctional Whitehouse, or the abilities of two old men to remain calm and collected, while under immense pressure. 

 

C'est la vie.

 

SD

 

 

[cubsfan]

22 minutes ago, SharperDingaan said:

Hopefully the SOH opens soon, and the Bab-el-Mandeb (Red Sea) remains open; while views may differ as to mechanics, we have a market for that. We just don't have confidence in the dysfunctional Whitehouse, or the abilities of two old men to remain calm and collected, while under immense pressure. 

 

C'est la vie.

 

SD

 

Ok - forget about Trump and Bibi.

 

Everyone is sick of the IRGC, even the Chinese who told the Iranians to knock it off with the ship attacks and get back to negotiating. 

 

Iran is losing all their friends and leverage.

 

The IRGC may remain, but their destruction is pretty much assured.

 

And the oil markets are yawning.