The funny part about this is that we’re just finding out about this now! I’ve known this for 30 years. The US leadership has known it for longer. Now ask yourself why they didn’t do anything about it until Trump?

But… Muh Peak Oil! EROEI (Cue the Steve St. Angelo and the… https://t.co/ANogHx4xte

— Tom Luongo (@TFL1728) April 18, 2026

FYI,

techno-ag said:

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Pizza said:

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Would be great if we could construct new refineries, but with cost/return on, apprehension about the future, and permitting I don't ever see that happening.

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A new one is supposedly coming online in Brownsville soon, Deep South Texas.

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Can't get here to make pump price cheaper, soon enough.

Rest of X post from above.

Quote:

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Truth is folks, technology keeps pace with Human Action. That's why the Law of Diminishing Marginal Utility is a LAW, not a postulate.

The technology to pull oil and gas out of the ground will only improve when the old technology is no longer profitable. Then Capex gets deployed, new methods are put into play, and cost of production steadies.

In inflation-adjusted terms Oil is as cheap as it was in the 1970's +/- 20%. Even during "Crises" like these.

When you factor in efficiency gains from other technology, that make the barrel of oil equivalent go farther in advancing Human Action, oil is stupidly cheap compared to the past.

That's reality. Malthus is always wrong. Doomcasters are grifters. Humanity rocks. If you hate humanity enough to believe the Panicans, doomsters, and terrorists that have sucked the joy out of life, that's between you, the guy in the mirror, whatever god you worship, and your therapist.

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Sq 17 said:

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Earlier in the thread it was discussed sounds like premiums and discounts are attached to the Futures price but not a truly separate market of course could be wrong about that

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Thanks for the info, I'll go back and read through.

aggiehawg said:

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The funny part about this is that we’re just finding out about this now! I’ve known this for 30 years. The US leadership has known it for longer. Now ask yourself why they didn’t do anything about it until Trump?

But… Muh Peak Oil! EROEI (Cue the Steve St. Angelo and the… https://t.co/ANogHx4xte

— Tom Luongo (@TFL1728) April 18, 2026

FYI,

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One thing I noted some time back was the only benefits when Dems prevent drilling is it leaves these massive reserves on public land to be exploited later when we really need them.

Oil is fungible (for the most part) so even if we can replace it (we can including vaca muerta, canadian oil sands etc) - we still get the price impacts globally without something like export restrictions.

On the other hand, we have a superior position with respect to nat gas. Henry hub is structurally cheaper than Asian/euro nat gas and the spread is widening because of geo political instability. Gas is not nearly as fungible so we do reap the benefits locally of cheap gas without suffering pricing issues caused by foreign issues.

Somebody commented that delivered oil was more than the futures indicated
So the futures quotes are not 100% indicative of the current price

Sq 17 said:

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Somebody commented that delivered oil was more than the futures indicated
So the futures quotes are not 100% indicative of the current price

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In industry terms, we call this current market being in "backwardation", meaning spot and front month delivery is (right now) MUCH higher than say, December futures. That said, it's not a guarantee that it will stay like this long-term, and front month can degrade and catch up to or dip below forward curves (what is known as a "contango" market). If a global recession truly arises, you'll see contango in curve activity
Crude oil is my wheelhouse -NatGas, not so much

The oil market just passed its breaking point.
And it doesn’t matter if the Strait of Hormuz opens tomorrow.
Here’s why the damage is already done 🧵

— Qasem Al-Ali (@AlaliQasem) April 20, 2026

He's not a typical doomer and IEA is saying similar things ... BUT ... The thread's storage crash forecast requires summer driving demand to be strong enough to draw inventories fast, but implicitly assumes no supply side response from non-ME sources. Those two assumptions are hard to hold simultaneously. If demand is that strong at these prices, Canadian oil sands, Brazilian pre-salt, Guyana, Saudi East-West pipeline flows, and UAE Fujairah volumes all get pushed to the max. The rebalancing happens, just not as a single event.

His narrative is more just painting a picture of circumstances aligning for the worst possible effect. Any of which can happen but the likelihood of all of them happening in concert leans more toward requiring a mutually agreed upon, coordinated bad outcome than a market responding to price signals. Prices are the rebalancing mechanism, and at $100+ Brent, a lot of latent supply and demand elasticity gets activated.

I'm not understanding the market right now. From what I'm reading there's a bigger shortage than the paper traders realize and the market just seems way too calm.

Reserves are being drawn down and alternate output seems to be maximized, but demand has not really destructed. Massive shortages of jet fuel in the near future. Europe and a lot of Asia looks very rough.

Is this a situation where everything looks calm and suddenly we wake up and we're sitting at >$150 oil?

Grim reading on why the global energy crisis is far worse than it looks in the futures markets:

- The world has already lost 550m barrels of Gulf crude (2% of global output); every month Hormuz is closed erases 7m tons of LNG (also 2% of supply)

- Seaborne stocks of crude are…

— Gregg Carlstrom (@glcarlstrom) April 22, 2026

I'm not even going to paste any excerpts from this hotair.com piece. I admit I had a lot of schadenfreude reading of their oil/energy travails in Germany. Gulp, indeed.

ErnestEndeavor said:

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I'm not understanding the market right now. From what I'm reading there's a bigger shortage than the paper traders realize and the market just seems way too calm.

Reserves are being drawn down and alternate output seems to be maximized, but demand has not really destructed. Massive shortages of jet fuel in the near future. Europe and a lot of Asia looks very rough.

Is this a situation where everything looks calm and suddenly we wake up and we're sitting at >$150 oil?

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Good question.

It's the "suddenly..." part that is concerning because prices at our pumps haven't budged in a couple of weeks now, and prices at the stores haven't jumped, so all seems as if this were too be the new normal for the foreseeable future, meh, we'll live.

But, if all of a sudden prices jump that much, that might actually affect many aspects of Americans daily lives. And near the midterms would not be helpful to the GOP at all.

ErnestEndeavor said:

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suddenly we wake up and we're sitting at >$150 oil?

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$156, June. We've been warned.

This is what I'm worried about. The markets just seem too calm right now.

“If the Strait of Hormuz opens after April, we cannot provide an accurate oil price forecast. We will have crossed too deep into the Rubicon. This will have been the largest oil supply outage in the history of the oil market by a magnitude of 4x. Fundamental market theories will… https://t.co/1HLJz1R92Y

— HFI Research (@HFI_Research) April 25, 2026

Demand destruction is coming and a possible global recession

Might be look like Covid where WFH and Zoom instead of face to face make a comeback in the workplace

A friend of mine is in Europe and not 100% sure he will be able to fly back as schedule in 2 weeks
His daughter just started in a job there and this is his second trip in 6 months Seems likely he will not be going again this year

Really simple read from JPM. Something isn't in alignment; we're just not sure what will crack

https://substack.com/@hfir/note/c-248155408?r=27mikr&utm_medium=ios&utm_source=notes-share-action

Sq 17 said:

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Demand destruction is coming and a possible global recession

Might be look like Covid where WFH and Zoom instead of face to face make a comeback in the workplace

A friend of mine is in Europe and not 100% sure he will be able to fly back as schedule in 2 weeks
His daughter just started in a job there and this is his second trip in 6 months Seems likely he will not be going again this year

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So....cheaper gas?

That's all that most of the nation worries about. Myself included.

It's good to be a NA refiner today.

Suck it rest of the world. You made the bed…

BigRobSA said:

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Sq 17 said:

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Demand destruction is coming and a possible global recession

Might be look like Covid where WFH and Zoom instead of face to face make a comeback in the workplace

A friend of mine is in Europe and not 100% sure he will be able to fly back as schedule in 2 weeks
His daughter just started in a job there and this is his second trip in 6 months Seems likely he will not be going again this year

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So....cheaper gas?

That's all that most of the nation worries about. Myself included.

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Energy demand destruction + credit tightening + labor market softening indicates recession. Add on higher inflation over a longer period and we have stagflation. Thats the medium term concern

https://www.hfir.com/p/wctw-the-oil-market-breaking-point-eab

This is the article the tweet is based on. A lot of problems if Hormuz doesn't open up. The US is in the best position to deal with it but the rest of the world is somewhat hosed already.

The ships that left Hormuz before the start of the war have now dropped their cargo and that oil is being processed through the refineries and markets. There's no more behind it. There's only so much storage to draw down. It takes several weeks for a ship passing through Hormuz to make it to a refinery in Asia. Even if Hormuz opens up today there will be a shortage of oil available to be refined. Refineries start slowing production.

Quote:

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By the first week of May, the only Asian countries with real excess in crude oil inventories will be Japan and China. Everyone else will have to scramble for barrels on the market, and if the Strait of Hormuz remains closed, that's when you will see refineries pay any price they can to secure the barrels they need. Because the alternative is shutting down the refinery.

For Europe, the lack of crude will become apparent by the same timeframe. US crude exports will have averaged near ~5.5 million b/d by then. OECD crude oil inventories will have reached operational minimum with the remaining excess crude in storage residing in the US.

By our estimate, US commercial crude storage will be below ~400 million bbls and approaching the operational minimum (370 to 380 million bbls) by the end of July.

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The article goes on to say that the Trump Administration would likely start banning refined product exports followed eventually by crude exports.

Any idea what Canada is doing with their tar sands oil?

Ag In Ok said:

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Any idea what Canada is doing with their tar sands oil?

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It just doesn't matter

Places that aren't Saudi Arabia Qatar etc can't pump enough to replace the oil that should be coming from Saudi Arabia Qatar etc

Venezuela can.

And, oh! Would you look at that!

We pretty much control it.

tysker said:

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BigRobSA said:

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Sq 17 said:

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Demand destruction is coming and a possible global recession

Might be look like Covid where WFH and Zoom instead of face to face make a comeback in the workplace

A friend of mine is in Europe and not 100% sure he will be able to fly back as schedule in 2 weeks
His daughter just started in a job there and this is his second trip in 6 months Seems likely he will not be going again this year

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So....cheaper gas?

That's all that most of the nation worries about. Myself included.

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Energy demand destruction + credit tightening + labor market softening indicates recession. Add on higher inflation over a longer period and we have stagflation. Thats the medium term concern

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You can just rock me to sleep....

Sq 17 said:

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Ag In Ok said:

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Any idea what Canada is doing with their tar sands oil?

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It just doesn't matter

Places that aren't Saudi Arabia Qatar etc can't pump enough to replace the oil that should be coming from Saudi Arabia Qatar etc

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Canadian TMX barrels are increasingly coveted by Asian buyers which is making the west coast refinery problem even worse. Canada is helping fill the global gap, partially at the expense of California.

California just continues to exhibit an ability to be worse than all of their socialist friends.

Correct me if I'm wrong as I'm certainly not an expert in the topic, but my understanding is the Canadian pipeline to the West Coast is pretty small and can't send a whole lot out for export to Asia from there. Most of their tar sands oil is coming to the United States pipelines down to the coast or for processing.

Yeah most goes south still. Pre 2024 about 300k (almost all) of the TMX line went to west coast refineries. Today it's about 800k b/d going to west, about half of that to refineries and half to China.

Rough math, 2.4x going to the pacific vs 2024 levels. West coast refinery delivery has barely moved in absolute terms over the same time period.

4 said:

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Venezuela can.

And, oh! Would you look at that!

We pretty much control it.

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Except all their infrastructure is greatly degraded by decades of mismanagement. Its also politically unstable and only private sector can go in and rebuild. They wont do that without guatentees.

https://www.reuters.com/business/energy/canada-approves-4-billion-natural-gas-pipeline-expansion-2026-04-24/

WTI back up to $106 today and climbing. Brent almost $120.

Just in time for there to another two week extension to the ceasefire.

ErnestEndeavor said:

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WTI back up to $106 today and climbing. Brent almost $120.

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That explains the jump the other night to $3.899 by me. Was dribbling down to $3.359, then BAM!.....$3.899.

Seeing a lot of X reports that wholesale gasoline prices are about to jump. I can't confirm that. One of them is from the Gasbuddy Guy saying he's seeing there might be a huge spike in gas prices in the midwest in the next day.