Strait Hormuz Tensions

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We’re Burning More Climate-Warming Coal Than Ever. Why?

India’s Oil Ministry Wants Windfall Tax on Petroleum Products Abolished

Why the Strait of Hormuz Is a Focus of Worry Again

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Stuart Turley: [00:00:14] Hello, everybody. Welcome to the Energy News Beat podcast. My name’s Stu Turley President and CEO of the sandstone Group. Today is August 13th, and I’ll tell you why. This is the daily stand up. And it is just a crazy time out there. Let’s go through the top stories. We’re burning more climate warming coal than ever. Why? I’ll tell you why. Let’s go to the next one. India’s oil ministry wants windfall tax on petroleum products abolished. I think he’s dead on. Right. It needs to go away. U.S. oil M&A spree set to surpass last year’s size. We got a few clues coming around the corner. OPEC cuts oil demand growth estimates as China economy struggles. OPEC knows what they’re doing. They’ve got a few good ideas on this. No sign of elevated radiation at Zaporizhzhia nuclear power plant despite fire Boy, I butchered that name. But the, Ukrainian power plant that is controlled by the Russians is not leaking radiation, so that’s a good thing. So let’s go also to the last story here of the day. Why is the Strait of Hormuz a focus? Worry again. Oh, there’s a little bit going on around over there. [00:01:31][77.4]

Stuart Turley: [00:01:32] So let’s start off with this story here. We’re burning more climate warming coal than ever. Why? I’ll tell you what. When you take a look at this article is very interesting. It was on Bloomberg and our feed picked it up. When you take a look at how they, have here blogs is an outstanding author there. And, he is a shout out to him. He has to ask a couple questions. How reliant is the world on coal? And it’s still unbelievable. It’s coal is 35% of the world’s, energy generation. In 2023, natural gas was second with 22%, hydro electric was 14 and nuclear was nine. And then in 2006 or 2014, coal was 40%. So attributed bids come down 5%. But it’s still this next chart. Global coal demand says that it’s peaking in 2024. I don’t buy it. I think that this is actually wrong. And you’re going to see peak. We haven’t seen peak coal yet. Coal is still going to be around while developing countries have explains developing countries value. Coal is cheap, convenient source of power so they can use to modernize their economies. Ding. And it is absolutely, I think, where the U.S could really help solve climate emissions if you if you were and that is go out and sell our technology at a small profit, but sell how to deliver coal to, the rest of the world and and do it cleanly. I think that you would get rid of energy poverty and and solve a lot of the problems. Anyway, two most populous nations face pressure to keep power flowing across the grid amid surging. That’s China and India. And we’re seeing nothing more than that. The country use, in 95% of the coal fired power plants in China in 2023. That’s unbelievable. That’s an amazing amount of information there. [00:03:56][144.3]

Stuart Turley: [00:03:56] Let’s roll over to India’s oil ministry wants windfall tax on petroleum products. Abolish wind farm profits. Taxes are very much like sanctions. They never work as intended. And when we’re looking at the UK and you’re looking at the UK is doing windfall profit taxes and trying to milk all the profits that they can out of oil, they’re just accelerating their deindustrialization very fast. India needs to quit doing windfall profit taxes. And the Indian Oil Ministry asked the country’s finance ministry to consider scrapping the windfall profit tax on petroleum products due to falling crude prices that India’s broadcaster Ed team now reported exclusively on Monday. and I agree, as exports are becoming highly remunerative, it is in that was certain refiners are drying out their pumps in the domestic market. The taxes and the windfall profit. Taxes don’t do anything and don’t allow for any reinvestment into new equipment or, getting scrubbers. Put in or maintenance or any of those things. So they really do need to take a look and don’t follow the UK. Get rid of any windfall profit taxes on oil and gas. If you want to know how to not do something, look at Germany or the UK, New York or California. You want to industrialize, follow those folks. [00:05:33][96.8]

Stuart Turley: [00:05:34] Let’s go to the next one here. U.S. oil M&A spree to set to suppress, suppress, surpass next year’s size. Last year, U.S. oil and gas companies announced several big deals in various will love and various over their, it said in their report an M&A that saw $32 billion worth of deals announced in the second quarter of this year. As the sector consolidates further, one question arises how will production change as the number of players on the shale, field shrinks? Michael and I talked about this yesterday on the podcast, and yesterday we talked about that. We are increasing our oil production, even with fewer people. And it’s because of longer laterals, better efficiency. When we take a look at the, Exxon $60 billion takeover of Pioneer Natural Resources and Chevron’s $53 billion merger with Hess, I’ll tell you what, it is a big one. And if we’re going to see some more mergers coming around the corner, who is going to be the biggest? Let’s take a look here. The third quarter also strong start with the 5 billion was acquisition of Grayson Mills by Devon Energy, a deal in the Balkans and the 1.1 billion acquisition of Point Energy Partners by Vital Energy and Northern Oil and Gas. I love the folks over there at Northern Oil and Gas. They are a well-run organization. So when we take a look at the energy efficiencies and operations, we are going to see some more M&A activity and you’ll see it, good management, good numbers. So keep an eye out. You can make some money out there. [00:07:21][107.6]

Stuart Turley: [00:07:22] Let’s go to OPEC here. OPEC cuts oil demand growth estimates. As China economy struggles. There are some serious problems coming around the corner for China OPEC cuts its 2024 oil demand growth by 135,000 barrels per day due to weaker Chinese demand. I’m always reluctant to just put all of my eggs in the, I’m going to throw down and not produce, oil because of China. China will surprise you. Somebody else will pick up the demand. And it seems like demand has been fairly steady. Global oil demand is set to grow by 2.11 million barrels per day. In a healthy growth space, total world demand is anticipated to reach 104 million barrels per day in 2024, bolstered by strong air travel demand, road mobility, including trucking as, healthy industrial and construction. OPEC trimmed its 2025 demand growth forecast to 178 1.78 million barrels per day, slightly lower than the 1.285 million barrels per day in the last. Global growth forecast. Is subject to many uncertainties. And I’ll tell you what, I’m not sure how, to rule in whether or not the China, tax or tries to annex Taiwan that is still out there and, we don’t know how any of that is going to play into it. So I do respect the, folks over there at OPEC. They have a pretty good handle on things, but I’m not sure that I would bet all my marbles on whether or not China is going to slow down or not. [00:09:03][101.4]

Stuart Turley: [00:09:03] No sign of elevated radiation at the this for the first the, nuclear plant. Despite the fire, these reckless attacks endanger nuclear safety at the plant and increase the risk of a nuclear accident. They must stop now. Russia is in control of the plant. The the. I believe it’s the 4 to 6 reactors are in standby mode. I do not believe that they are generating electricity. Team was told by the nuclear plant an alleged drone attack, that one of the cooling towers located at the site. Currently, the radiation indicators are normal, but as long as Russian terrorists remain control over the nuclear plant, the situation is not and cannot be normal. I don’t Russia did not attack it. Why would they attack it if they’re in control of it? And would why would Ukraine attack a thing? This whole thing reeks of why would a Russia attack the Nord Stream pipeline when Putin said, actually, all we have to do is turn it off without having to do anything. So who? No, no. Why was dying? It’s not generating electricity. And it’s best to let nuclear reactors kind of sit there, because when the war is over, you’re going to want to turn those things back on. Let’s let a nuclear reactor come back online, no matter who wins a war. Sorry. I am not a war fan. If you can’t tell. [00:10:31][87.8]

Stuart Turley: [00:10:32] So let’s go in here to the last story here. Why? The Strait of Hormuz is our focus. Worry again. Well, part of it is because, today is a religious holiday for, Israel. And they are pending an attack from, Iran. And then the, the Strait of Hormuz is, shaped like an inverted V. The waterway connects the Persian Gulf to the Indian Ocean and Iran with its north and and the United Arab Emirates and Oman to the south. It’s 100 miles or 161km long and 21 miles wide. And it’s narrow as point. That’s not very far. And the shipping lanes, each direction two miles wide. And this feeds into you’ve got Iraq, Kuwait. So Saudi Arabia, Iran, lots of oil goes rolling around through this area in in here. It’s essential to the global oil trade. Tankers all almost 15.5 million barrels per day of crude and condensate from Saudi Arabia, Iraq, Kuwait and the UAE and Iran through the strait in the first quarter of 2024. Wow. That is a lot. 15.5 million barrels. That’s a lot of tankers. And when we sit back and take a look, I am surprised that we’re not seeing higher prices, on oil. At the time of this, we were at about 80 some odd dollars right at that for oil. Let me check here for just a moment and that the stock oil price is coming up and we are at 79, 65 for wow 7911 and 7964. So Brant and WTI this is really where they are right there next to each other. The dollar is down just a little bit at a dollar three. Nat gas is at $2 and 80 $0.18 $0.19. So when we sit back and take a look Saudi Arabia exports the most through the Strait of Hormuz. And it’s been recently diverting shipments by using a 746 mile pipeline across the kingdom to the Red sea, avoiding the Strait of Hormuz. And it’s sending 1.5 million barrels a day via its pipeline to the port of, through the Gulf of Oman. So if you can avoid it, avoid it. But, I’ll tell you what, we are living in some crazy times here, so buckle up. [00:13:15][163.4]

Stuart Turley: [00:13:16] Please. Like, subscribe, share, hug your pets, tell your pets, say, hey, we want to listen to the podcast. Got some fantastic guests lined up. I mean, we are covering global markets. We are covering oil and gas, information, energy trading, finance markets. If you are buying or selling oil and or natural gas and or LNG, please reach out at energy newsbeat.com/trading desk and reach out and, we will get in touch with you if you need to buy or sell oil. And, anyway, we’ll have a great day. We will talk to you guys soon. [00:13:16][0.0][778.8]

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