Week Recap: From Biden Sanctions to EU Dilemmas

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

Stuart Turley: [00:00:12] Hi everyone welcome to the energy news beat daily stand up. This is the weekly recap. The staff is going to pick out the biggest stories of the week. We have had an absolute crazy week on the desk. I’ve got five George McMillan stories that are a total podcast that are coming right on out. We’ve also got Genevieve Collins, which is now in the hopper. We’ve got Christopher Messina, we’ve got Jim Matlock, and we’ve also got a few others that are coming out. We’ve got Steve Goreham with he is an absolute great friend of the show. We’ve got a lot of podcasts coming up and looking forward to name. If you are going to name, please reach out to me. I want to interview you there. Last year we did about 35 interviews and it was crazy how successful it was. So thanks. Have a great day and look forward to speaking to you soon. [00:01:07][55.3]

Stuart Turley[00:01:08] What do oil and gas exports mean to the Russian economy? The second question in this article is how will the new Biden sanctions play with President Trump’s negotiations? Michael, I did not see this sweeping sanctions from the Barber Deville out of the Treasury secretary. I mean, she needs she needs a new hairdresser. Holy smokes, Batman. Mine’s bad. Mine’s flesh. Hers off the charts. But let’s start here with this article. This article is from a couple of Russian gentlemen, and I thought it was very interesting that we would. They would even have some great comments in here. Let’s go through what was sanctioned by the Treasury. Turkish and Gazprom Neft ranked third and fourth in Russia for oil extraction, along with subsidiaries, as well as personal sanctions against Vladimir Bogdanov and Alexander Doko, heads of seven Gas and Gazprom insurance companies, shipping companies, Gold the greatest carrier, the biggest carrier of the Russian oil. 183 vessels believed to be part of the shadow fleet. 20 foreign trading companies and dozens of officials in the energy ministry. Now, how does this affect me in a Russian economy? Russian export income will decline and import prices will go up. It will further weaken the ruble. Now, Michael, the shadow fleet is really unknown how many are out there. I’m thinking it’s in the 800 tankers. And right now, the sank US sanctions, less than 7% of the tankers that are around the world. So I don’t know the sanctions are going to impact in the short run. They’re not going to impact the will of the Venezuelans, the Iraqi and all of the other ones to get around the OPEC quotas. And it’s the insurance companies, Michael, that the shadow fleet gets 80%. I just ran another article on this on Newsbeat, 80% of the shadow fleet, let’s say it’s 800 tankers do not have insurance. And we just saw three of them last month. Sink. Who pays for that cleanup? So this is huge. [00:03:34][146.4]

Michael Tanner: [00:03:35] There’s obviously a pricing component to this, which I’ll talk about a little later on. But I think the real reason this was done was is theoretically a negotiating tool for the Ukrainian delegation and the incoming administration in order to make some sort of deal with Putin. The question was, will this is this a ship that will actually help a deal get made or is it just irrelevant? [00:04:00][25.1]

Stuart Turley: [00:04:01] Why would the Biden secretary as secretary of treasury, do this without talking to President Trump? I don’t know. There is a big section, a group within the Democrat Party now saying that Trump is not going to be able to reduce the sanctions without Congress, and that’s due to a bill that they ran through last year. So this looks to me like they’re trying to hinder President Trump rather than help him. [00:04:32][31.0]

Michael Tanner: [00:04:33] It’s it’s it’s stupid. It’s stupid. And it makes it look more, in my opinion, adversarial. And if their goal, you know, I mean, I think from a from the other side, why would they do this? I mean we saw what happened to prices. Prices briefly spiked over $78 a barrel. It could be solely for the fact that, hey, can we drive up prices and start off give President Trump a high cost of energy as he comes into his administration? There could be something there. I, I don’t like to think that because I like to think we’re all in the same team. But I think there’s a lot of evidence to show that we’re all not on the same team. But, you know, we did see that. A lot of those images coming out of President Jimmy Carter funeral. We might all be on the same team and they’re just playing us. [00:05:14][41.7]

Stuart Turley: [00:05:15] I’m not going to go there because I thought it was kind of funny that, you know, you see President Obama and President Trump yucking it up and then you see the whole rest of the alive. President’s not happy that that’s being funny. So that was quite interesting. And one other thing is the we need to remember the World Bank and Russia’s food exports are important to the world and this impacts that as well. GOP Rep Unveils Bill No president Can ban Fracking Without Congressional Approval. Holy smokes, this is really a good one. You’ve had some great comments on this one. And in the sense Congress, you know, I agree that no president should a single president should be able to with a stroke of a pen ban fracking in the sense Congress, the states should maintain primacy for the republic, regulation of hydraulic fracturing for oil and gas. And this is from Ruger. And I think you brought up some excellent points on this. The Biden administration has spent the last four years attacking American energy industry and recently attempting to shut down by banning almost all new offshore banning projects, Luger said in a statement. It will be up to Republicans and President Trump to reestablish American energy independence. Hats off to him. I really like him. And when you sit back and take a look at this California Michael in 2023, California imported 26% of their oil from Iran, Iraq as sanctioned adversary of the United States. Why are we not trying to produce a local energy rather than import from sanctioned other folks? No president should ban fracking. No state governor should have to destroy a thing. So this is very important. [00:07:15][120.0]

Michael Tanner: [00:07:15] Yeah, because it’s not like oil produced in Texas just goes to Texas. It goes nationwide. So no gov worldwide be allowed to ban fracking or it’s a global market. It’s a national market. So I completely agree. Love me some some Congressman Pfluger. He’s from the great city of Midland, so he firsthand understands the nature of the relationship between fracking and oil production. So great call there. [00:07:37][22.2]

Stuart Turley: [00:07:38] Sanctions on Russia is killing German companies. Chancellor candidate says out of this, the sanctions have nothing to do with morality. They have nothing to do with human rights. They have nothing to do with a love of peace. They’re simply a stimulus program for the U.S. economy and a killer program for Germany and European countries. Wagging That said, she is running for chancellor. And I agree with her that sanctions, as Irina Slav has often said and a wonderful energy writer, she says sanctions do not work as intended. And the sanctions really the energy crisis was brought on by the left wing policies in the Germany Congress. They became dependent on Russian low cost natural gas and they thought that they could keep getting away with it as they close their nuclear facilities. You’ve got to have a baseline. Renewable energy does not work, quote unquote renewable energy. Wind and solar does not work without baseline supporting power. And she is right, it is a have nothing to do with morality. They have nothing to do with human rights. They have everything to do with a love of peace. And they’re simply a stimulus program for the US economy. In the short run, it will be continued because if you compare cheap Russian natural gas price in a pipeline versus LNG, people don’t talk about the cost disparity between Russian pipeline gas and US LNG shipping in not even the same. Let’s go to Petro Vietnam. Power fires up LNG to power plant. This is exciting. The first ignition is a milestone on January 11th, according to PV Power. PV Power said the first time imported LNG is produced into a power plant in Vietnam in a new milestone for Vietnam’s power industry. This is really pretty cool. It’s a 1.5GW of power. South Korea’s Samsung and KT secured a contract from PV Power to build the plant in a consortium with Vietnamese contractor La Lima, I believe is how you pronounce that. This is an exciting way to take a look. I’m going to be going through this kind of a thing because when you take a look at the power plants in. Why they use high sulfur content of fuel oil. And I’m going to try to take a look at recommending to Chris Wright, the new incoming secretary for energy. It would make a lot of sense to have an LNG import facility costed out and convert those oil burning facilities, power plants in Hawaii to cleaner burning U.S. LNG. This is an incredibly important for the environment because you’re not going to be able to get wind or solar in Hawaii without having to really destroy the environment. So it would make more sense to wipe out their crude oil or their heavy crude heating fuel and power plants and put in LNG like this one. Iran Russia Treaty signals deepening ties of defiance of the West. There is more to this than you can shake a stick at. Russia and Iran will sign a comprehensive Strategic partnership treaty on Friday focusing on defense and security cooperation. This is very important, especially when you consider the the close ties that Russia has been developing and quietly developing with Japan. Yes, you heard me say that. You heard they they are developing them with also South Korea. You heard me here that say that as well, North Korea and Asia. And this is coming in to the whole shifting of power is rolling right along through. So this is a huge development when you talk about both of these guys. Both countries are in OPEC plus and both countries are huge in the shadow fleet in avoiding sanctions. Yeah. [00:12:04][266.0]

Michael Tanner: [00:12:05] And the interesting part is, you know, they’re both under intense US sanctions. And the real question is what from an energy standpoint, does this help them get around those sanctions via Iran? Iran is probably going to be an easier time getting around the sanctions if they partner up with Russia. How that all works, I don’t know. But I think it’s something super interesting to watch. Also, it’s just also not, you know, not great that they’re teaming up. You know, that creates kind of an interesting monolith there in the Middle East. [00:12:32][27.8]

Stuart Turley: [00:12:33] It does. And anyway, and believe it or not, we forced Putin’s hand to do this. So this is all based on the lousy geopolitical from the current administration. U.S. LNG Prepares for Under Trump. What do you think, Michael? [00:12:50][16.2]

Michael Tanner: [00:12:50] Well, you know, I. I can’t say I told you so on this one, but I would completely agree with this article from the standpoint of, you know, when people kept saying, drill, baby, drill, oil production is going to go crazy. I don’t think so. I think drill, baby, drill, and I’ve been saying this now for weeks is code for less regulation. Regulation has not affected oil companies from drilling new wells. Really, it hasn’t. Even offshore. All the offshore that’s being drilled right now was permitted even under the Biden administration. Under that 2022 act they were required to hold if they were going to do offshore wind leases, they had to offer offshore oil and gas leases, and they did that. So where Biden really hurt was the ban on new LNG permits, which could be a way to unlock the natural gas business in the United States. There are large private equity companies that are gambling everything on this. We won’t name them Cambridge, but you know it in so this this code in this I don’t want to maybe code’s the wrong word but this take of LNG exports leading to a resurgence of natural gas was what I think was code for drill, baby, drill or vice versa. Drill, baby, drill was code for let’s get rid of regulation and let’s allow the US LNG industry to thrive because one that actually does allow us to make more oil because a lot of the times if there’s no if it’s if we have no end consumption, it’s like you just put natural gas in a tank and let it sit there. Not cool how it works. You got to use it. So that means if you’re if if there’s nowhere to take it, you can’t put it into a pipeline, meaning the wells that are producing natural gas or even producing oil with natural gas as a byproduct can’t produce because they’re not to want to put their gas so well. [00:14:34][103.9]

Stuart Turley: [00:14:34] There’s a couple of big things in here. The U.S. LNG export capacity expected to double over the next five years. That’s a lot of new LNG coming online. That is an incremental 1.3 trillion boost to the US economy through 2040. This is extremely huge. But here’s where I want to also. So many talking heads will sit there and say that they can replace European or Russian natural gas for U.S. LNG. It does not work that way there. Not even the same aim. A Russian natural gas is a 7,700% whatever. The number is cheaper. You cannot compare the two. [00:15:18][44.0]

Stuart Turley[00:15:19] EU Trump China Dilemma. Relations between China and the EU are worsening and could rapidly deteriorate when Donald Trump returns to the White House on Monday, pledged to the self-proclaimed tariff man to impose steep duties on all U.S. imports may have prompted Brussels and Beijing to ease trade ties to limit the potential impact of their export oriented industries. This is very interesting when you consider without a doubt the EU China relations is getting worse, said Tobias Frank, a senior policy analyst at the European Council on Foreign Relations. And I think it’s recognized by both sides. The whole world is just coming out of a horrific leadership of the Biden-Harris administration. And I think that there’s going to be some trouble in their eyes as Trump gets a balance again on these things. President Trump has got a going to have his hands full with $2 trillion of additional spending that the Biden-Harris administration put in. He’s got to recover if he’s going to recover. President Trump recovering, it’s going to impact the EU and the China relations, the Russia relations. The second key issue affecting the EU. China is increasingly in close political economic ties with Russia, whose war in Ukraine is entering its fourth year in February. I believe that the war will have an ending in 2025. However, as George Macmillan and I have been talking, I’ve got five podcast lined up that I’ve recorded with him. They’re coming out and he’s basically said if President Putin does nothing, he’s won. The EU and NATO are having some serious problems and they could fail. So when you take a look at how China and the EU buckle up, they’re not the only ones that are having some serious issues going on. And it’s an excellent article. [00:15:19][0.0][899.7]

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