Week Recap: Rising Oil Risks, Inflation, and the Push for Alternative Power

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Stuart Turley [00:00:10] Welcome to the Energy News Beat Daily. Stand up. This is the weekly recap. It is been a crazy week around here. I’ll tell you what. Michael and I have just been running amok with all the stories. The staff has got them all lined up. Please, like, subscribe, share. And if you like, please let us know. If you are an oil and gas executive. I want to talk to you. If you’re a energy executive, if you’re in the nuclear field. If you’re in the investment space, in the energy space, I really want to talk to you on the podcast. It’s all about delivering the lowest kilowatt per hour to everyone on the planet with the least amount of impact on the environment. That’s how you stay healthy. Hey, have a great day. Hope you have a fantastic weekend out there. Hug your family. Hug your dad out of your bed. We’ll see you all soon.

Michael Tanner [00:01:05] First up, here we go. Izrael I ran a strike on oil assets. Could revive inflation. As you guys remember, last week, Iran launched in kind of a tit for tat retaliation. About 180 ballistic missiles not causing that much damage. But we did see Israeli President Benjamin Netanyahu warn that, quote, Tehran has made a, quote, big mistake and would pay for it. This goes back all the way to April when I ran first launched about a 300 drone and missile attack. There was a limited counterattack from Israel on that point. Unfortunately, what we’ve now heard out of Israel, maybe not, unfortunately, but maybe if if we’re talking about oil prices or inflation, then, yes, Israel has vowed a, quote, significant retaliation. I’m going to read straight from the article here fueling speculation that Israel could target Iran’s oil, military and nuclear infrastructure. I think some of the stuff that we’ve heard recently, they’re steering away from nuclear, but they’re leaning in to the oil, which is, again, if you like, high oil prices, then yeah, because we will see oil prices tremendously shoot up. I’ll read now straight from the article again, Netanyahu is under intense pressure from senior Israeli officials, including former Prime Minister Yaron Lapid, to strike Iran’s, quote, most painful target, while U.S. President Joe Biden has called for calm, saying October 4th he would think about alternatives to striking Iranian oilfields if he were in Israel’s shoes. Thank goodness he is not. I mean, really, since the day we got to go back and look, even after this happened, we saw oil prices and specifically Brant prices up about 17% week over week, even though we’ve now seen them ease a little bit. You know, there’s a couple different critical Israeli oil assets that could be hit that somewhere, if you read reports, could be somewhere around 2 million barrels per day. And if that were to happen, I mean, we would clearly see triple digit oil. The last time we did see $100 oil was shortly after Russia decided to invade Ukraine in February of 2022. Here’s a quote from Biraj Seidl, draft chief commodities analyst at Swedish Bank ECB. He was on CNBC last week. Quote, If you strike, if Israel takes out oil installations, Iran, you could easily see oil prices go to 200 plus. Holy smokes. Okay, so the real question is what exactly are these oil fields that they may or may not hit? Okay. So obviously, you’ve got Kharg Island. It would be the most crippling. It’s really home to their major Iranian oil export terminal. It’s about where most of their oil goes in terms of to be exported if it’s located the Persian Gulf, about 40 miles off the or excuse me, 40km. We’re talking international, 25 miles off the array off the Iranian coast. It has handles about 9/10 of their oil exports, which is unbelievable. You’ve got other targets as you’ve got the Bandier Abbas oil refinery located in the southern Gulf port city by the exact same name. That refinery does about 400,000 barrels a day and is really key to Iranian domestic consumption. So if you’re trying to cripple them in Iran, maybe that’s what you’re looking for. You know, again, if you they attack refineries, we probably won’t see oil prices shoot up as much as if they did end up attacking Kharg Island. They also something else that could be under attack is the South Bronx gas field located in the Gulf. It’s the world’s largest natural gas field that they share with other South Bronx keeps about 8% of the world’s natural gas reserves, and it’s a major revenue source down there for Iran. When it comes to the LNG export market. We also have the Bushehr oil terminals, which are located pretty close to a nuclear plant that bears the same name. So if they did want to basically hit two birds with one stone, maybe that’s the place we go. It could be interesting. All I know is I think the market is setting up and prepping itself for that. You know, we’re sitting at $75 oil now. As you listen this Monday morning, I mean, it could be $100 that they decided to take out any one of these facilities to start the week. I do think that, you know, what they do will be limited in its oil price inflation capacity. And basically what this of, you know, from my perspective. I think they’re more likely to hit gas fields. I think they’re more likely to refining capacity.

[00:05:13] I doubt they go out and actually go in and go out and just completely take out Kharg Island, if only because I don’t think they want $200 oil. I do think that’s a little bit. I don’t think it’s going to be $200 oil per se. If that does happen, you might see 120, maybe 130. But again, I don’t know if that’s necessarily going to happen. But I think this article is pointing out, as you know, that this would come at a very fraught time for both the Biden administration, I should say, the Biden-Harris administration and the current political climate in terms of, you know, running for president. If all of a sudden we do see for an extended period of time, 90, 95, $100 oil, that’s only going to continue to exacerbate the inflation that we’re already seeing. I saw 250 gas outside just as I was driving home earlier. I mean, that’s great. We can that can work for everybody. I mean, it would be nice if it was lower, but that that’ll work if all of a sudden you get to that $354 range, especially here in Texas. Yeah. It’s it’s going to continue to continue to to hurt. So I think the whole world is kind of watching what happens. And then depending on where they actually decide to go ahead and hit, you know, again, if it’s if it’s Kharg Island, well, you know, then we will see it. I me personally, I doubt it is that.

Michael Tanner [00:06:23] We also see rig counts drop. We only were up one week over week to 586. That’s compared to about 622 Last year. We did see oil rigs up by two gas rigs down by one, which makes complete sense. We did see that current weekly oil production, according to the EIA, resumed its all time high, 13.4 million barrels per day. We also did see the frac spread count, which again is an estimate of the number of completion crews that are completing wells that are unfinished bel from October 4th from a to 38 back down to 2 to 36. So our frac current spread is slowing down a little bit. No rigs picked up in the Permian. They were still sitting at 304. We did see the Eagle Ford pick up that one rig from there. So a little bit of shifting here and there. But again, guys, it’s it’s spicy out there. Okay.

Stuart Turley [00:07:10] Jamie Dimon issued dire warning about the treacherous geopolitical situation. He is the CEO of JP Morgan Chase, and he is cited very big, particularly in the Middle East, as a major factor contributing to uncertainty. He’s also talking about political economic challenges in the United States, including inflation, fiscal deficits and infrastructure issues. Quote, There is a significant human suffering in the outcome of these situations could have far reaching effects on both short term economic outcomes and, more importantly, the course of history. Diamond said. On the bank’s third quarter earnings release, he said his bank is closely monitoring the geopolitical situation for some time, and recent events show that conditions are treacherous and getting worse. This is huge. Jamie Dimon has had a lot of good points in the past. He says Iran, North Korea and Russia. I think you can legitimately call them an evil axis, he told reporters at the Financial Markets Quality Conference in Washington in September, referring to a term that’s first used by President George W Bush to describe Iraq. While we hope for the best, these events and prevailing uncertainty demonstrate why we must be prepared for any environment. I’ll tell you, he’s been running it for JPMorgan for 18 years, and he emphasized the board will do the right thing on succession when he eventually lead. I’ll tell you, he is saying again, all of our hearts and prayers go out to Hurricane Eileen and Melbourne. And again, we are our hearts and prayers go out for that travesty.

Stuart Turley [00:08:57] Google Backs build out of small nuclear reactors in Kairos Deal. You know, just like taking a look at the the Three Mile Island deal on this. The deal which will bag 500MW of power, includes Kairos, 50 megawatt demonstration Hermes project in Tennessee, followed by commercial scale reactors at 75MW. Big technology companies are racing in line to power supply. We’re looking for new net clean power, Terrill said. We’re not looking to repurpose their existing clean power, so they’re really looking for net zero type power, which is nuclear. This is exciting from the standpoint that we do need to reopen the nuclear business and environment in the United States. And I am I couldn’t be more happy about that. David Blackman articulated that very well on the Energy reality podcast, which is also you can see this on our YouTube channel. He articulated that very well and it was very telling that the Three Mile Island accident. Was vandalized, if you would. Or brutalized, by the way that it was reported and really ruined the atomic energy in the United States for years. So I’m hoping that this can overcome that and we can see a renaissance in nuclear energy.

Stuart Turley [00:10:29] Israel vows it will make its own decision on how to attack Iran. Netanyahu Responds to Report Nuclear and energy Won’t be Target responds to report nuclear and energy won’t be the target. So everybody is kind of having a sigh of relief that they’re not going to bomb Kharg Island or take out their export facilities. But a report in the Washington Post said the Israeli premier has agreed to limit the response to military targets. The newspaper cited two officials familiar with the matter who didn’t identify. So when we sit back and take a look, we’re not sure. But then Netanyahu actually said we will determine all of the targets I had signed for him. He’s sticking to his guns, so to speak, and saying that he will pick the targets. I applaud them. There’s a little bit more to this discussion on on just destroying their oil infrastructure. There are other things that would be beneficial for the world’s economy. Other than that, I think it’s an open discussion. And if you would leave your comments in the show notes or if this is posted out on my X channel or if it’s posted out anywhere else, we want to know, what do you think? Do you think Israel should propose a strike, a preemptive strike on nuclear facilities? I don’t know. I don’t have an opinion on that. This is just asking, what is your opinion with the.

Stuart Turley [00:12:06] Age of electricity to follow looming fossil fuels? P IEA says A the IEA and the EIA have a lot in common. They’re both government agencies that will fictitious surely put out numbers to the highest bidder. The world is on the brink of a new age of electricity, where fossil fuel demand set to peak at the end of the decade, meaning that surplus oil and gas supplies would drive investments into green energy, the International Energy Agency said on Wednesday. But in a release accompanying its annual World Outlook report, the agency also flagged a high level of uncertainty as conflicts embroil the oil and gas producing Middle East and Russia in the second half of this decade. Quote, the prospect of more ample or even surplus oils of natural gas, depending on how geopolitical tensions evolve, would move us in a different, very different world, IEA executive director Faith Brill said in the release. The IEA has people that pay them and they are green energy for green energy policies, equal deindustrialization and very bad financial problems. So go ahead and I’ll wait here while we try to make an iPhone out of either a solar panel or a windmill. Okay. It’s not going to happen. Thank you for that. It is not going to happen. You need petroleum based products for plastics, semiconductors and used everything that you want to make you can’t make with just renewable energy. I don’t know when peak oil demand is going to get here. I know for a fact we do need to move away from it and eventually we will. The technology is not here and it’s not in the foreseeable future. So till then, be careful who you listen to because there are usually somebody that is on a payroll, kind of like the FBI coming out and having to revise their numbers. And that crime has been increasing. So just because you’re on somebody’s payroll doesn’t give you the the you shouldn’t look at your own ethics in your reporting.

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