State of play ahead of heading out to the Middle East

Doubtless you couldn't have escaped an escalation of tensions in the Middle East after Israel attacked Iranian nuclear and military sites early on Friday, and Tehran inevitably responded. 

The two have sparred before including last year. But as yours truly contemplates this - over a pre-departure negroni at a Heathrow Airport lounge ahead of a trip out to the region whilst waiting for BA 123 to Doha, followed by Abu Dhabi for a speaking engagement - something feels different this time around. 

For starters, last time Israel and Iran sparred, the former left the latter's oil and gas infrastructure intact. But that doesn't appear to be the case this time around. Over the last 24 hours, Israel has attacked the Shahran oil depot in Tehran. It has also attacked two of Iran’s gas fields, including Phase 14 of South Pars so far.

This clearly indicates that the Israelis no longer see Iran's energy infrastructure as off limits. Worse may (or may not) yet follow as the Oilholic said in a BBC interview on Friday. 

And here's more detail on some of the potential worst case scenarios for the oil markets in your's truly's latest Forbes missive, including, yes, the not-so-likely-at-all possibility of Iran attempting to close the Strait of Hormuz in a fit of consternation. 

But there will be wider near-to-medium-term implications for the oil market and you can fully expect oil futures to post a(nother) near-term spike next week, especially given Israel's attacks on the Iran's oil and gas sites. 

It is just as well that there is plenty of shall we say non-OPEC, non-Middle Eastern oil out in the market as the Oilholic said in an Al Jazeera interview prior to all hell breaking loose. 

Consumers could well have been looking forward to an easing in prices at the pump were it not for this development. 

Where it goes from here is anybody's guess - but if this calms down, it won't take long for market fundamentals to return and drag oil prices lower! The Oilholic knows it feels a million miles away from there right now, but things can change in an instant because that's the nature of the cyclical volatility of the oil market. 

In the interim, as the old British saying, or shall we say the old adage, goes - Keep calm and carry on! More musings to follow soon folks. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Energy Connects click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo I: A delicious negroni at British Airways First Lounge, London Heathrow Airport © Gaurav Sharma, June 2025. Photo II: Energy Analyst Gaurav Sharma on BBC World Service © BBC News, June 2025. Photo III: Energy Analyst Gaurav Sharma on Al Jazeera English © Al Jazeera, June 2025. 

OPEC+, uptick in crude prices & more

For crude traders, the month of June began exactly the way May did - with another 411,000 bpd production hike by OPEC+. 

The move was almost entirely priced in by the global market. And if anything else, prices actually rose a bit to clawback the ground lost in the wake of the Trump Tariffs kerfuffle in April. 

Overall, the crude price - using Brent as a benchmark - is still down by double digits on last year. 

Of course, there are different opinions out there in the market, but respectfully the Oilholic sees little reason to be overtly bullish on oil prices as things stand. 

Here's yours truly's Forbes post on OPEC's move and its wider implications with another hike - most likely - coming in for August from the producers' group. 

All things considered, with the hedges of US shale players not rolling off for another six months in many cases (and as high as 18 months in the case of some), this blogger expects the market in 2025 to be in surplus. 

Furthermore, as The Oilholic noted in an interview with Asharq Bloomberg Business News last week, this isn't just about OPEC+ versus US shale production. 

The market can (and will continue to) expect additional barrels from Canada, Brazil, Guyana and Norway too. 

On balance, we're looking at an oil market surplus in 2025, especially for light sweet crude. 

This then does beg the age-old question (again) - what about investment in oil and gas in the current market and macroeconomic climate? We're in retreat from the Covid-years of frowning upon oil and gas investments to somewhat of a panic on the need for it to ensure security of supply in the energy transition era.

According to the IEF, around $740 billion a year is needed in investments to the end of the current decade assuming a global demand figure north of 100 million bpd. But in 2024, we didn't even cap $600 billion worth of oil and gas investments. So is the industry investing enough? It's what yours truly asked in his latest Energy Connects column (available here). 

Well that's all for the moment folks! More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Energy Connects click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo I: Oil production site. © jplenio / Pixabay, 2018. Photo II: Energy Analyst Gaurav Sharma on Asharq Bloomberg Business News channel. © Asharq Bloomberg Business News, June 2025. 

Crude thoughts ahead of OPEC+ decision

The question some in the oil markets are asking is will OPEC+ hike production again over the weekend for a third consecutive month in a row. The Oilholic is not among them - a hike is most likely coming, quite possibly of the same volume seen in the previous two announcements, i.e. 411k barrels per day (bpd). 

That's because OPEC has quite overtly shifted from defending a price level to protecting its market share, as yours truly said in a BBC interview this morning. For its part, the oil market is pricing this in already and at some point soon - were this continue - sub-$60 per barrel Brent crude prices beckon. 

Some OPEC ministers and others allocating higher production say the market should remain cognizant of rising demand. However, global demand growth is currently just north of 1 million bpd. That can be serviced by non-OPEC production growth alone. 

A glut beckons with plenty of oil in storage on land and on sea, as the Oilholic wrote on Forbes overnight. A group of eight within OPEC+, or shall we say the powers that be led by the Saudis, have so far unwound 44% or 960k bpd of the 2.2 million bpd in cuts announced in 2022. So how far will they go? And what's the stomach for the fight within OPEC's corridors?

Well, we've been here before in 2015-16, when the Saudi minister at the time Ali Al-Naimi attempted to clobber non-OPEC, especially US shale, producers. In the process, both sides ended up inflicting deep flesh wounds but no knockout blows, as oil prices plummeted to $30 per barrel, before recovering. 

Al-Naimi was sent packing into retirement by the Saudi king and the US oil patch suffered investment delays and thousands of job losses, but survived and saw another wave of consolidation. 

Ultimately, both back then and this time around, those contributing to headline US hydrocarbon production are driven by the spirit of private enterprise, not some unified collective like OPEC producers who can collectively hike or cut output. This spirit and agility keeps them afloat at trying times, if not avoid pain. 

Many shale producers are currently hedged at $70+ per barrel levels with the hedges slated to decouple in six to 18 months time. Therefore, the earliest a hit will be noted would be in 2026 to early 2027 when production stateside will likely plateau or start sliding lower. So are we in a prolonged fight for crude market share and will it work in OPEC's favour? Only time will tell. 

But for context, back in the summer of 2016, the US was producing north of 8.5 million bpd despite all the pain in oil patch. In May 2025, as yet another battle for market share commences - in very different circumstances commences - that figure is north of 13 million bpd. Go figure! 

That's all for the moment folks. More musings to follow soon in line with market developments as they happen. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Energy Connects click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo: Gaurav Sharma, Energy Analyst at Oilholics Synonymous, on BBC Business Today on May 28, 2025. © BBC News, May 2025. 

What oil price would Trump want for US consumers?

US President Donald Trump makes no secret of his pro oil and gas credentials. It is also widely understood that the President seeks lower crude prices for the American consumer. 

Ideally, US shale producers would prefer oil prices north of $75 per barrel. That isn't exactly low enough for the President. 

Thanks to an uncertain macroeconomic climate, the kerfuffle caused by his trade tariffs and OPEC+ opting to bring more barrels on to an already well supplied market - prices have recently slumped down to $60-65 per barrel. But is that range now low enough for the President? Perhaps not, say many, including global investment bank Goldman Sachs. 

Apparently, after a forensic analysis of the President's social media posts, analysts at the bank have concluded that his preference would be for a $40-50 per barrel West Texas Intermediate range. The US benchmark is trading at ~$3 per barrel discount to the global proxy benchmark Brent at the time of writing.

Quoting parts of a Goldman Sachs report to clients, Bloomberg recently noted it as having observed that Trump's "inferred preference for WTI appears to be around $40 to $50 a barrel, where his propensity to post about oil prices bottoms.” 

He also “tends to call for lower prices (or celebrate falling prices) when WTI is greater than $50,” Goldman analysts added. “In contrast, President Trump has called for higher prices when prices are very low (WTI less than $30) often in the context of supporting US production.”

However, for US shale drillers this blogger has spoken to, that range is a tad too low. Many are presently hedged 12-18 months out on $70-plus prices. When the hedges come off, a low price environment will bite. 

But the President has also been very vocal about US energy dominance - or as Goldman analysts note - tweeting nearly "900 times" about it. Clearly he wants US oil inc. to succeed too. So, where would the happy middle ground be between both sentiment tugs? 

Market forces might well decide that, skewing it to one side or the other. The only confirmed thing is the overwhelmingly bearish climate this may all play out in 2025. That's all for the moment folks. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2025. Photo: US flag. © DWilliam / Pixabay, 2015. 

OPEC and the oil price floor

The last few weeks have brought range-bound volatility to the oil market with Brent futures oscillating between $70 and $75 per barrel. 

For the Oilholic, the now not-so-new Brent price floor is at $70 that OPEC appears to be protecting, although the producers' group rarely publicly comments on oil prices. 

In the face of subdued global, especially Chinese, demand growth, working to protect a price level rather than market share isn't quite working either. 

Brent has seen a steady decline over the last six months to the end of the year from $85 down to $75 to ultimately encountering resistance at $70. 

The market share versus price quandary is continuing for OPEC+ with no end in sight and perhaps no unanimity within its ranks on how to deal with it. 

All the while rising numbers of non-OPEC, especially US, barrels continue to hit the market. Overall, the situation is that at present, and going well in to H1 2025, there is very little appetite for additional barrels from any source, let alone OPEC+ barrels. 

Chances are OPEC+ will keep its cuts in place for another few months whenever a formal meeting takes place to decide on near-term production levels in December. But while it can potentially avoid actions to oversupply the market, will non-OPEC producers do so? Most likely, no. So, lower for longer does appear to be the order of the day. 

And were OPEC+ and the Saudis to discard their output curbs and trigger a market tussle, a decline to $50 Brent prices cannot be ruled out. 

Brent's price floor might currently be at $70, but it could potentially be... well floored further depending on what happens. 

Moving on from oil market chatter, yours truly recently discussed COP29 shenanigans on TRT World (clip here), wrote concluding thoughts on the climate change conference for Forbes (article here), and offered one's take on London's AIM-listed energy minnow Afentra (LON: AET) for Motley Fool (article here). That's all for the moment folks. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2024. Photo I: Oil pump jack building block model at the AVEVA World 2023 Conference, Moscone Center, San Francisco, US. © Gaurav Sharma, October 2023. Photo II: Gaurav Sharma on TRTWorld, November 2024 © TRT World, November 2024. 

Are we back to fundamentals as oil prices tank further?

For the second successive session this week oil prices have slid further and faster. After Monday's declines of over 2%, Tuesday has logged fresh intraday drops of as high as 5%. 

At the time of writing this post, The Oilholic noted that Brent and WTI front month futures contracts had breached their respective $74 and $70 per barrel floors. Headwinds are in fact gathering momentum and yet lower prices may follow. 

Over the weekend, China's promised economic stimulus underwhelmed the market with its vagueness. Then came a revelation that OPEC - deemed the most bullish of the crude oil demand growth forecasters - had revised its prediction lower for 2024 below 2 million bpd. The IEA's prediction is below 1 million bpd. 

And if that wasn't bearish enough, media reports, led by The Washington Post, also suggested on Tuesday that Israel may not attack Iran's oil facilities as feared. So has the risk premium effectively decoupled and are we now back to market fundamentals driving the oil price again? Largely yes in an oversupplied market. But then again not a complete yes yet, as its contingent upon what Israel may or may not do next! 

That said, outlandish $100 per barrel oil price predictions can once again take a back seat. That's all for the moment folks! Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2024. Photo: Oil production site. © jplenio / Pixabay, 2018. 

CERAWeek Day III: On peak oil demand & more

As the end of day III of CERAWeek nears, for the Oilholic one panel session stood out in particular - Oil Demand: How will it look in a decade? This emotive and extremely polarizing subject turned hot late last year after the International Energy Agency issued a forecast predicting a peaking of oil demand in the 2030s. 

Naturally, OPEC blasted the IEA and said demand would continue to grow for many, many years. It also offered a bullish scenario of 116 million barrels per day in global oil demand by 2045. 

If the Oilholic were to offer his tuppence, oil will indeed continue to be a major part of the energy landscape not just for many years, but many decades. The stark reality of the matter is that no one can say for sure when oil demand will peak whether it is the IEA or OPEC. 

But kudos for the CERAWeek panelists to have at least tried. They included names familiar to the readers of this blog - Joseph McMonigle, Secretary General of International Energy Forum and Jeff Currie, a former Goldman Sachs partner and Chief Strategy Officer of Energy Pathways at Carlyle. 

Both were joined by Fred Forthuber, President of Oxy Energy Services, and Arjun Murti, Partner, Energy Macro and Policy at Veriten, and another former Goldman Sachs executive. The discussion was as lively as it gets. Here's the Oilholic's full report on the goings-on of the panel via Forbes. 

The panel followed a related quip by Shaikh Nawaf al-Sabah, CEO of Kuwait Petroleum Company, earlier in the day's proceedings. He told delegates that global energy demand will increase faster than the population growth rates through to 2050. "That means that we're going to require more energy intensity for the population in the world."

KPC's answer - why of course - increase its production capacity to 4 million bpd by 2035 from its current level of 3 million bpd. 

See, again the thing here is (as asserted earlier by yours truly), if the various forecasters can't even agree on what demand growth will be like at the end of 2024 (with the IEA predicting 1.3 million bpd and OPEC predicting 2.25 million bpd) - how can they predict for sure what the approaching horizon may look like in 2030! And on that note, it's time to say goodbye. More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Motley Fool click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2024. Photo: CERAWeek 2024 panel on - Oil Demand: How will it look in a decade? © Gaurav Sharma, March 2024. 

ADIPEC Day III: On partnerships, progress & more

As Day III of ADIPEC gathered momentum and crowds grew bigger still, global crude oil markets were greeted with the news that Saudi Arabia and Russia would maintain their joint oil production cuts of 1.3 million bpd until the end of the year. However, that didn't stop global oil benchmarks from sliding lower faced with an uncertain demand picture and an ever stronger US dollar. 

Inside the conference halls, and away from the din of the global crude market, various speakers called for heathy and meaningful cross-sector partnerships to open viable energy transition pathways. These may ideally involve stakeholders from across energy industries, financiers, technologists, governments, academia, and, of course, the end-consumer. 

As Niall Hannigan, Chief Financial Officer of Masdar, noted in a panel on fast tracking finance and prioritising investments for the energy transition. "Investors need scale. They want to see a clear policy framework within a geography, underpinned by a stable, transparent regulatory regime. Governments won’t attract investors alone – we need regulators, developers, development banks and commercial banks in the room together to create a programme. That collaborative conversation is essential.”

For his part, the Oilholic marked Day III with a tech heavy outing. It included concluding one's final speaking engagement at ADIPEC 2023's Digitalisation in Energy conference stream with a one-on-one discussion with Saravan Penubarthi, CTO of AiQ, on the future of cybersecurity solutions for energy systems. 

Wrapped up my moderating duties at #ADIPEC2023 with a final Digitalisation in Energy session earlier today with Saravan Penubarthi, CTO of AiQ, on the future of #cybersecurity solutions for #energy systems. Great session, lovely audience at @Chevron Hall 14 #EnergyTransition pic.twitter.com/WDIc77ekQk

— Gaurav Sharma (@The_Oilholic) October 4, 2023

With panel sessions concluded, yours truly also took some time out to have a walkabout in the wider exhibition area spread over several halls. 

Getting going on Day III of @ADIPECOfficial 2023. Here's @Yokogawa's display on #decarbonizing, @ABB_Energy's EV charging station mock-up (& @bakerhughesco talk on sustainable solutions) in the background #ADIPEC2023 #EnergyTransition #OOTT pic.twitter.com/Im6PLyz1p0

— Gaurav Sharma (@The_Oilholic) October 4, 2023

And...also said goodbye to Chevron's Boston Dynamics robotic dog(s) this blogger has been walking by for the past few days :) 

And that's all for Day III, more tomorrow! Keep reading, keep it 'crude'!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Rigzone click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2023. Photo: (1) ADIPEC 2023 exhibition floor, Abu Dhabi, UAE, (2) Chevron's Boston Dynamics Robotic Dogs © Gaurav Sharma 2023.

ADIPEC Day I: "Decarbonising. Faster. Together"

The Oilholic is delighted to be back at ADIPEC 2023 after a gap of four years, and one virtual ADIPEC (2020) during the Covid pandemic. The tagline this year is rather unique "Decarbonising. Faster. Together" - and one that yours truly, and one suspects 160,000-plus delegates who'd be visiting the event are unlikely to miss. 

It's on banners, flags, posters, flyers, magazines, websites and broadcasts - in short if you are in town, you are unlikely to miss it. 

But what does it all mean? For Sultan Ahmed Al Jaber - ADNOC's boss and the country's Minister of Energy and Advanced Technology, and one might add the President-designate of COP28 - it all about an energy transition that's "just, orderly, equitable and responsible." More on that here via this blogger's latest Forbes post. But kudos from a branding perspective as "Decarbonising. Faster. Together" is just as catchy in 2023, as "Oil and Gas 4.0" was back in 2019. 

Something's of course never change. China has yet again sent a humongous delegation to town with a number of exhibitors, major energy outfits, businesspersons, subject matter experts and dignitaries whose presence you simply cannot miss. 

There are also another 29 country pavilions to visit. Around 1,600 speakers are in town, present company included, and 10 parallel conference streams, two of which the Oilholic will have four sessions in (More details here). The "Make It In The Emirates" theme - encouraging the UAE's domestic industry and manufacturing - also looms large and proud around ADIPEC corridors. 

This blogger also hosted the first of his panel sessions at ADIPEC 2023, titled: "The twin transition: policy alignment between the green and digital agendas," i.e. the simultaneous shift towards a more sustainable and digital economy. 

This engaging discussion included panellists Andrei Covatariu, Co-Chair, Task Force on “Digitalization in Energy” and Vice-Chair of the Group of Experts on Energy Efficiency, United Nations Economic Commission for Europe; Allyson Anderson Book, Chief Sustainability Officer, Baker Hughes and Leonid Zhukov, VP of Data Science, BCG-X and Director of BCG Global AI Institute. 

That's all for the moment folks as we're just getting started in Abu Dhabi. More to follow soon! Keep reading, keep it 'crude'!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Rigzone click here.

To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2023. Photo: (1) Entrance to ADIPEC 2023, Abu Dhabi, UAE, (2) Pavilions of companies from China. © Gaurav Sharma 2023.

On Guyana & other 'crude' musings

As the month of July comes to a close, it seems the Saudis have indeed achieved near-term success with global oil benchmarks - Brent and WTI - now above $80 per barrel. It's a price level that Riyadh can live with. Although it is worth wondering at what cost (i.e. the good old debate about losing market share vs propping up the market without the help of friends / foes)? 

On a related note, while for much of OPEC+ the recent uptick in crude prices may come as a relief, for one new non-OPEC kid on the crude exploration block it has the makings of a spectacular boost in fortunes - Guyana. Here are the Oilholic's thoughts via Forbes on this micro-state in Latin America, with a population of less than a million people, and its full-blown oil boom. 

Guyana's headline crude production which came in at less than 100,000 barrels per day (bpd) as recently as 2020 has grown nearly four-fold to just shy of 383,000 bpd in 2023, and is still growing, according to the country's Ministry of Natural Resources. That said all the market chatter of it either joining or being asked to join OPEC is a load of nonsense that been denied by the oil producers' organization itself.

Elsewhere in the Oilholic's world, yours truly offered his perspective market perspectives on CGTN and Asharq Business News following the conclusion of the OPEC International Seminar earlier this month, and noted OMV's potential recoverable natural gas find of approximately 48 TWh, or 28 million barrels of oil equivalent. This discovery carries the potential to alter the natural gas market in Central Europe, and is Austria's largest gas discovery in the last 40 years. So watch this space! That's all for the moment folks! Keep reading, keep it 'crude'!

To follow The Oilholic on Twitter click here. 

To follow The Oilholic on Forbes click here. 

To follow The Oilholic on Rigzone click here. 

To email: journalist_gsharma@yahoo.co.uk

© Gaurav Sharma 2023. Photo © Image by Omni Matryx from Pixabay. 

On crude demand & the OPEC seminar’s conclusion

On a calmer second and concluding day of the OPEC Seminar, participants and deliberators' thoughts moved away from obsessing about the oil price and market stability, to pragmatic discussions on a more just and equitable energy transition. And, of course, to the energy sustainability trilemma (sustainability, security and affordability) - i.e., how focusing on one aspect at the cost of the other could have - in the words of many participants - "disastrous" consequences.

Of course, many spokespersons representing developing world producers at the gathering felt they need no lectures from the developed nations; and had every right to tap into the wealth of their hydrocarbons to improve their economic fortunes. No doubt an emotive subject for many, especially since no one can convincingly call time on hydrocarbons anytime soon.

The way the Oilholic views it – human mobility, mainly ground transportation, is unquestionably and increasingly heading in the direction of electric mobility. However, there are no obvious solutions or substitutes for petrochemicals, for aviation, for heavy mining and industry, for the cosmetics value chain, and many other facets of the global economy. So renewable energy, and electric mobility are the low hanging fruits, but what and where next, and how fast? 

BP’s Boss Bernard Looney told the seminar: “Oil and natural gas will continue be a part of the world’s energy mix for several decades to come.” How then do you balance investments in hydrocarbons versus the capex involved in moving away from them, at what pace, and using what proportionalities?

For instance, as the United Arab Emirates' Energy Minister Suhail Al Mazrouei pointed out – current
global oil demand is north of 100 million barrels per day (bpd), and every year the energy industry needs to invest to prevent the depletion of around 8 million bpd.

OPEC puts the figure at $12.1 trillion to 2045 or $500 billion per year. Projection figures can vary from forecaster to forecaster. It's not the amount of money that’s the subject of the most heated debates both in Vienna and beyond, it’s what approach to take over the coming decades. For that there is neither a unified approach nor any sort of magic wand solution. And so the debate rages on, as it did at the OPEC Seminar, and as COP28 approaches with United Arab Emirates, a major hydrocarbon producer being the host nation (as were coincidentally the last two – Egypt and Scotland). So plenty to ponder over. 

And on that note, it’s time to bid goodbye to Vienna. Just before one takes your leave, here’s the Oilholic’s latest Forbes missive on how/why Saudi Arabia remains committed to unilateral cuts, and why the oil price isn’t quite firing up. More analysis to follow over the airwaves in the coming days on what was discussed here, but that’s all for now. Keep reading, keep it crude! 

To follow The Oilholic on Twitter click here. 

To follow The Oilholic on Forbes click here. 

To follow The Oilholic on Rigzone click here. 

To email: journalist_gsharma@yahoo.co.uk

© Gaurav Sharma 2023. Photo © Gaurav Sharma, July 7, 2023.

Back on a road (err...flight path) well travelled!

It's nearly time for BA706 - a very familiar British Airways flight number as far as the Oilholic's travels go. For after a gap of over three years in earnest, the Oilholic is back on a 'crude' road (err...flight path) well travelled and heading to the 8th International OPEC Seminar in Vienna, Austria. The core subject for deliberations is "Towards a sustainable & inclusive energy transition" and yours truly is looking forward to a fascinating few days of international dialogues. 

One must say, waiting for a flight to the Austrian capital once again for an OPEC gathering after gap years spent in the "in-house" corporate world brings a renewed sense of excitement and anticipation, eagerness to reconnect with old friends in energy analysis community and make new friends. 

Prevalent energy market conditions are miles apart from where we were in a pre-Covid world in March 2020 (scene of the last crime....err...visit). And who can forget the negative WTI oil price that followed in April 2020. Furthermore, energy transition is high on the agenda in a changed (hopefully pragmatic) world. So cheers to it all. 

To warm up, and prior to embarking on this journey, yours truly has fired a few missives via Forbes. Based on the Oilholic's reading of the current market situation and macroeconomic climate, oil prices remain rangebound and stuck in $70s for Brent (More here). 

And here are yours truly's thoughts on Shell's dividend hike and return to 'crude' basics. If sustainable investment trusts, learning more about Scope 1, 2 & 3 emissions and OPEC's June meeting are topics of interest, you can find your way there via the Oilholic's Forbes profile (details below). But that's all for now, and for the moment folks. Am BACK! So keep reading, keep it 'crude'!

To follow The Oilholic on Twitter click here. 

To follow The Oilholic on Forbes click here. 

To follow The Oilholic on Rigzone click here. 

To email: journalist_gsharma@yahoo.co.uk

© Gaurav Sharma 2023. Photo © Gaurav Sharma, July 4, 2023.

'e-OPEC' agrees 9.7mbpd cut extension by a month

We here again, albeit via webcam! As widely anticipated, oil producers' group OPEC has agreed to recommend a roll over its existing 9.7 million barrels per day (bpd) production cut at its latest meeting. Here's a glimpse of the new e-OPEC (click to enlarge). 

Two sources said all members were onboard, with one respondent emphatically declaring there "will be a 9.7 million bpd not ifs or buts." However, the was precious little word on the so-called cheaters. Within OPEC that would be Iraq and Nigeria, and beyond it Kazakhstan. There's plenty of doubt over what to do with Mexico's insistence that it cannot reduce its production level. 

However, Russia and Saudi Arabia, who want non-OPEC and OPEC cheaters brought to heel are so far said to be in agreement with a move to extend the cuts - instituted in April in the wake of the coronavirus pandemic - by a month. Non-OPEC countries are only just joining the meeting, so the market will have further word on that at time of stunted demand and expectations of a dire 2020. 

Monitoring is expected to be stepped up with OPEC's monitoring committee or the Joint Ministerial Monitoring Committee (JMMC) opting to meet every month from June 18 onwards. The next OPEC meeting has been scheduled for Nov 30, followed by an OPEC+ meeting on Dec 1. Ultimately, an exit strategy remains missing and that problem will resurface soon rather than later. 

Ahead of the weekend's OPEC+ meeting, oil futures jumped significantly, with the Brent August contract rising well above $40 per barrel, and WTI July contract coming within tantalizing distance of the said level. There's something incredibly premature about this and the said levels - at least in this blogger's opinion - have arrived at least a month early as one noted in recent opinion column. 

Away from the goings-on at OPEC, here are few of the Oilholic's recent Forbes missives on the world of oil and gas equities:

• 3 Oil Stocks That Might Go Bankrupt In 2020, May 15, 2020
• 5 Top Canadian Oil Stocks To Buy In 2020
• How To Interpret Saudi Wealth Fund’s $2 Billion Splurge On Big Oil Stocks

And that's all for the moment folks! Keep reading, keep it 'crude'!

To follow The Oilholic on Twitter click here.

To follow on Forbes click here.

To follow on Rigzone click here. 

To email: gaurav.sharma@oilholicssynonymous.com

OPEC+ G20 = 'Crude' potpourri + V-shaped recovery

There have been umpteen developments over the last fortnight in the crude saga of oil producers scrambling to curtail production in light of the unprecedented drop in demand triggered by the coronavirus or Covid-19 outbreak.

That oil prices would have fallen regardless was a given, but the current desperate market situation was largely of Saudi Arabia and Russia's own making following the collapse of OPEC+ on March 6. 

Marking a reversal, frantic talks over the Easter weekend saw Moscow and Riyadh underpin a 9.7 million barrels per day (bpd) production cut, with feverish diplomacy by U.S. President Donald Trump and the promise of 1.5 million bpd in cuts by G20 oil producers serving as an accompaniment. Overall, the crude potpourri smelt better than it actually was. 

For the expected near-term oil demand decline is likely to be two to three times the production cut level. The deal itself doesn't look rock solid. As the Oilholic discussed with Mary-Ann Russon of the BBC, around 2.5 million bpd of cuts have been promised by Russia, an OPEC+ participant with a very poor record of compliance with the OPEC+ framework. 

The Saudis meanwhile would be cutting 2.5 million bpd from an inflated level of 11 million bpd. Prior to OPEC+'s December meeting, their production stood at 9.744 million bpd, which means in actual fact their compromise is closer to 1.25 million bpd on average. 

Yet for all of this, if oil demand is dire, any supply cut is only likely to have a very limited impact. We are flying, consuming and driving less (despite 99c/gallon prices in some US states) - so if we aren't going out that much, it won't matter one bit what OPEC+ does or doesn't. 

The deal is supposed to run from May to July and it won't avert short-term pain. It's come too late to rescue April, and it's too little for May and June. Hopes are pinned on a V-shaped recovery in oil prices come the middle of July. But how steep that 'V' might be is the question, and in the Oilholic's opinion it'll be steeper than where we are. 

As for The Donald, here is this blogger's take in a discussion with Marco Werman on PRI / BBC joint radio production The World. Phenomenal diplomacy it was by the President but more hot air was generated than tangible results. 

Additionally, the Oilholic also discussed various other market permutations, facets and shenanigans plus direction of oil and gas stocks, fuel prices, and several other energy topics with a host of industry colleagues including Richard Hunter of Interactive Investor, Freya Cole of BBC, Juliet Mann of CGTN, Victoria Scholar of IG Markets, Auskar Surbakti of TRT World, Sean Evers of Gulf Intelligence, Garima Gayatri of Energy Dias and scribbled half a dozen Forbes missives in what can only be described as the most manic of all manic fortnights for the oil market.

Final thoughts - WTI still looks like it'll hit mid-to-late-teens and continue to lurk below $20 per barrel  till early summer because dire demands means dire prices! That's about it for the moment folks! Stay safe, keep reading, keep it 'crude'!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2020. Photo I: Oilfield in Oman © Shell. Photo II: Gaurav Sharma on the BBC, TRT World and CGTN broadcasts © Broadcasters as mentioned, April 2020. 

A catalogue of ‘crude’ missives on oil market turmoil

In the nine days that have lapsed since yours truly last wrote a blog post, the crude oil market has gone crude and cruder, peppered with barmy ideas, suggestions of strange alliances, tariffs, and of course tweets. For all of that, two things haven't materially changed – crude demand collapse continues as the coronavirus or Covid-19 pandemic spreads, and oversupply in the face of demand destruction is already here.

So here are few of The Oilholic’s missives via Forbes and Rigzone tackling various market slants between March 26-Apr 2:

• With whole countries in lockdown mode, forecasters now reckon a fifth of global crude demand could be wiped out - Forbes, Mar 26, 2020. 
• The Oilholic's thoughts on why a resurrection of OPEC+ would be too little, too late for the oil market - Forbes, Mar 27, 2020.
• Oil futures are in record contango - Forbes, Mar 29,2020. 
• Oil benchmarks ended Q1 2020 around 66% lower and lack of storage space is becoming apparent - Forbes, Mar 31, 2020. 
• US shale explorer Whiting Petroleum becomes the first casualty of the current oil price slump as it files for bankruptcy - Forbes Apr 1, 2020. 
• Moody's announces series of predictable negative outlooks on major oil and gas companies - Forbes, Apr 1, 2020. 
• How Saudi belligerence has pushed VLCC rates to comedic highs - Rigzone, Apr 1, 2020. 
• And finally, how a Donald Trump tweet sent oil futures soaring but the gains are unlikely to last - Forbes, Apr 2, 2020. 

And that's about it for the moment folks! Stay safe, keep reading, keep it 'crude'!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To follow The Oilholic on Rigzone click here.

To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2020. 

View on a 'crude' few days from Houston

The Oilholic is glad to be back in Houston, Texas, US for yet another visit. However, in many ways the latest outing marks several first instances. It is this blogger's first instance of arriving in America's oil and gas capital right after an OPEC summit, the first immediately following a mammoth oil price crash, and the first when several events yours truly was planning on attending, including IHS CERAWeek have been cancelled due to the coronavirus outbreak that is wrecking the global economy. 

Yours truly promised some considered viewpoints 'to follow' while scrambling out of Vienna, to get here via London following the collapse of OPEC+, and here they are - thoughts on why $30 oil prices could be the short-term norm, and in fact $20 could follow via Forbes, thoughts on the shocking but inevitable collapse of OPEC+ via Rigzone, and why the recovery since Monday's (March 9) oil price slump is not a profound change to where the market stands, again via Forbes. 

Interspersed will penning thoughts for publications, the Oilholic met some familiar trading contacts in H-Town (you all know who you are), and met two new crude souls via mutual contacts too. Most seem surprised by the level of Aramco's discounts for April cargoes, and opined that they were three times over their expectations. 

The Saudis certainly mean business, and what was a crisis of demand following the coronavirus outbreak that has crippled China; has Iran, Italy and South Korea in its grip; and has seen emergency protocols being activated from California, US to Hokkaido, Japan now has a new dimension. It is now a crisis of demand coupled with a supply glut as OPEC and non-OPEC producers tough it out in a race to the bottom of the barrel. That's all from Houston, for the moment folks! More soon. For now, keep reading! Keep it 'crude'!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2020. Photo: Downtown Houston, Texas, US © Gaurav Sharma, March 10, 2020.

OPEC+ talks collapse; oil futures tank

The Oilholic had to leave OPEC HQ prior to the conclusion of a rather fractious OPEC+ meeting which resulted in no agreement being reached among OPEC and its non-OPEC partners. Following are the key takeaways, from Vienna Airport:

• Russia blocked OPEC efforts aimed at deepening ongoing OPEC+ cuts by 1.5 million barrels per day (bpd) raising the output cut level to 3.2 million bpd to the end of 2020.
• Stalemate means current level of cuts are set to expire as of April 1, 2020.
• Russian Oil Minister Alexander Novak even refused name/set date for next OPEC+ meeting; technical committee to meet on March 18.
• Senior OPEC sources tell this blogger “There is no plan B”.
• Oil benchmarks slump by as much as 8% in the immediate aftermath of the development and trading down by ~10% at the time of writing; Brent/WTI front-month contract at levels last seen in August 2016, and recorded largest intraday drop since the financial crisis. 

More considered viewpoints/analysis to follow once yours truly has arrived in Houston. Keep reading, keep it ‘crude’! 

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2020.

OPEC+ in waiting mode as Russia plays hardball

Overnight (March 5) OPEC ministers met and proposed a deepening of existing oil production cuts by 1.5 million barrels per day (bpd) to their Russia-led OPEC+ partners in an effort to calm the oil market following the coronavirus outbreak and its devastating impact on the global economy.

While the original 'deepening of cuts' proposal was set to last until end-June 2020, OPEC heavyweights met yet again late yesterday evening and announced the proposal would be extended to the end of 2020. 

The burden of 1.5 million bpd, would be shared as 1 million bpd and 0.5 million bpd between OPEC and non-OPEC players respectively. From a headline perspective, if approved the market would be looking at 3.2 million bpd of OPEC+ barrels being taken out of the global supply pool. 

With that the ball went into the Russian court, and that's where it has been since well into today (March 6). In that time, Russian Oil Minister Alexander Novak has gone and returned from Moscow, and an OPEC+ closed-door meeting scheduled to start at 9:30 CET, has yet to get going 14:20 CET!

And the Oilholic has putting his scenarios to colleagues in the broadcast media. 

As the #OPEC+ waiting game continues, it was a pleasure discussing #oil market direction with @Cibereporter of @euronews. No matter what OPEC does, demand scenarios following #CoronavirusOutbreak are looking pretty dire #OOTT #oilandgas pic.twitter.com/VoYvp6HhjN

— Gaurav Sharma (@The_Oilholic) March 6, 2020

It was a pleasure rounding off #OPEC commentary on @CGTNEurope's Global Business broadcast with @AP TV crew. Thanks for having me on the program. Q1, Q2 looking pretty uncertain for the #oil market #OOTT #oilandgas pic.twitter.com/qIAJ2QQ6qm

— Gaurav Sharma (@The_Oilholic) March 5, 2020

In one scenario, Russia could say 'nyet' and you'd see bearish headwinds engulf oil futures and driving the price down to $30 per barrel. 

In another scenario, the mammoth cut would proceed providing only temporary relief to oil prices given the full extent of the coronavirus' demand destruction is yet to be clear. Although, Wall Street is belatedly, finally coming to terms with the magnitude of the destruction having ditched its complacency.

Finally, often the favourite colour at these OPEC meetings based on the Oilholic's past experience is grey. OPEC+ could emerge and offer a good old fashioned figures fudge involving OPEC cuts with the support of the Russians, and other non-OPEC players, with very few barrels to show for it. This too will either provide negligible or short-lived support. 

All of this bottles down to one thing - hardly anyone has an accurate handle on where oil demand is going, and the Oilholic believes there will be shrinkage on an annualised basis. Were that to be the case, a 'crude' logic applies - oil supply cuts never really solve a crisis of demand. It's where crude market presently is. OPEC can improve its odds via a cut but can do little more!

And on that note its time to leave Vienna for London, and then on to Houston, all the while keeping an eye on events here. But that's all for the moment folks. Keep reading, keep it 'crude'!

To follow The Oilholic on Twitter click here.

To follow The Oilholic on Forbes click here.

To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2020.