Peak Oil Barrel

142 responses to “US December Oil Production Drops”

1. Ovi

   03/03/2026

   Shallow Sand

   In response to your comment in the previous post “Control of the Strait of Hormuz is the whole deal IMO. The USA will have to patrol it for a very long time unless regime change can be accomplished..”

   Iran does not even have to fire a missile. Just saying the Straits are closed will keep ships away. Also insurance companies will not insure the ships.

   It will be interesting to see how many ships risk going through the straits.

   1. Coffeeguyzz

      03/03/2026

      Ovi,
      Regarding the status of the Strait of Hormuz, THE youtube site related to this crucial topic is Sal Mercogliano’s “What’s Going On With Shipping?”.
      Short, fast paced, info packed presentations by an exceptionally knowledgeable (and entertaining) former mariner.

   2. Dan

      03/03/2026

      Excellent post!!!
      Thank you Ovi!!!

   3. Ovi

      03/04/2026

      Dan

      Thanks. Much appreciated.

2. DC

   03/03/2026

   Ovi,

   The link for Mike Shellman’s post does not work for me, maybe double check that.

   1. Ovi

      03/03/2026

      Thanks

      Fixed in post.

      Just in case/

      https://www.oilystuff.com/group/operational-stuff/discussion/841d2787-6d25-4ffe-b39e-f52d7614e6da

   2. DC

      03/03/2026

      Thanks Ovi,

      Seems to work correctly now. Another excellent post by Mr Shellman.

      Also great work by you.

      Thanks.

3. Ovi

   03/03/2026

   Great Timing

   US at peak oil production and will need to import more oil. Straits of Hormuz shut down for a few months driving oil price up. T encourages more US consumption of oil/gasoline by discouraging purchase of PHEVs.

   Will higher WTI encourage more drilling and oil production. Find out in 6 to 8 months and will the new production be big enough to offset ever increasing decline?

   1. DC

      03/03/2026

      Ovi,

      If the higher prices are sustained and the completion rate increases we might see tight oil output on a plateau for as long as high oil prices are sustained. This may require $120/bo in 2025$, I doubt that price level will be sustained as it would increase EV and plugin hybrid adoption which may reduce demand for oil.

   2. Alimbiquated

      03/04/2026

      China is by far the largest customer of oil flowing through the Straits of Hormuz. They are likely to double down on their EV strategy.

4. shallow sand

   03/03/2026

   I just saw on Bloomberg that US taxpayers are going to pay tanker shipping insurance costs through the Strait of Hormuz, as well as providing escorts via the US Navy.

   Isn’t this subsidy directly benefiting China?

   1. Ovi

      03/03/2026

      SS

      Does anything make sense these days.

   2. SRSrocco

      03/03/2026

      shallow,

      Not only is this a subsidy on U.S. taxpayers that benefits China, but it also puts U.S. Navy ships in jeopardy if Iran decides to use hypersonic missiles, the Fattah-1 or Fattah-2, on U.S. warships escorting tankers.

      https://www.youtube.com/watch?v=VTAlZWZi_TQ

      If this US-Israel-Iran conflict, which now includes many other Middle East countries with U.S. Military bases, continues for more than 2-3 weeks, this could seriously disrupt the Global Economy.

      steve

   3. LeeG

      03/03/2026

      Steve, Donald is suggesting a few weeks of bombing. I would guess that would keep shipping insurers from insuring during that time.

      https://www.juancole.com/2026/03/provoke-economic-downturn.html

      In the United States, President Trump has ducked reporters because the rationale for the US/Israeli Iran attacks – Iran’s planning for a preemptive attack against American interests – has proved untrue, as the US intelligence community has acknowledged.

      “In the Sunday interview with the British Daily Mail, President Trump disclosed a possible timeline for the war with Iran, suggesting fighting could go on for a month: “It’s always been a four-week process. We figured it will be four weeks or so. It’s always been about a four-week process so – as strong as it is, it’s a big country, it’ll take four weeks – or less.””

   4. Nick G

      03/03/2026

      LeeG,

      The president and others in his administration, notably Rubio, have presented several contradictory rationales, none of which made sense on their own (pre-emptive attacks are illegal under international law, perhaps because such a rationale is so easily dishonest), and make even less sense as part of a chaotic war effort.

      No clear or consistent goals, no clear or consistent timeline, no obvious strategy to achieve possible goals (like regime change).

      Sigh.

   5. SRSrocco

      03/03/2026

      LeeG & Nick G,

      Maybe you all have seen this interview of Prof Jiang forecasting “The U.S. Will Lose The Iran War.” Of course, this is his opinion, as everyone who has an a-hole also has an opinion.

      But, interestingly, Jiang predicted not only that Trump would win the 2024 Presidential Election, but also that the U.S. would go to war with Iran, and, lastly, that the U.S. would lose the war with Iran… basing his forecasts on his strategy using “GAME THEORY.”

      https://www.youtube.com/watch?v=4Ql24Z8SIeE

      I think Trump bit off more than he could chew… that’s my KISS-Keep It Simple Stupid opinion.

      steve

   6. Alimbiquated

      03/04/2026

      shallow sand —
      I thought the US government’s calculation was “Shutting down oil exports will hurt China and help US oil producers”. Now they seem to be burning money to deal with the unintended consequences of their own actions.

      Trump’s Peace Council got $10 bn from the American taxpayer. Maybe they can pitch in.

5. Mike B

   03/03/2026

   Thank you POB and Matt Mushalik for the use of your charts. I’ve written a retrospective on the phenomenon of peak oil, which will be published at 3QuarksDaily sometime late next week. But with the way things are going in the world right now that seems like an age away and I’m afraid my little article will seem a fly speck.

6. Iron Mike

   03/04/2026

   LeeG,

   I just saw your question on the last post.

   I don’t think any regime will change from air strikes. In this particular case, I think defection from the army and IRGC would be the key point. These people have kids which have no future in Iran due to the economic mismanagement and an outdated ideology. So if regime does change it will be from large scale defection.

   This scenario would be ideal for the U.S, Israel and the wests since they wouldn’t really have to put any boots on the ground.

   No idea how it will play out though.

   1. DC

      03/04/2026

      Hi Iron Mike,

      You were concerned about the extreme religious views in Iran. The article below suggests this is a problem on both sides.

      https://www.theguardian.com/world/2026/mar/03/us-israel-iran-war-christian-rhetoric?utm_source=firefox-newtab-en-us

   2. Alimbiquated

      03/04/2026

      Some thoughts, Iron Mike

      – Cruelty and economic mismanagement do not doom repressive regimes. They can continue on for decades, even if it it is in practically everyone’s best interests to change.

      – Terrorizing the populace with bombing raids is not an effective means of turning the country against its government. It can even have the opposite effect.

      – Boots on the ground is a terrible idea. Iran is about four times the area of Iraq and double the population. And America has no plan.

      – Without something to rally around, there will be no revolution. People need something to defect to, regardless of how bad. That’s how the current Iranian regime got in. People rallied around the mad mullahs to get rid of the self-styled Shah. They didn’t want the mullahs, they just wanted change, and grasped at straws. What straws do Iranians have now?

   3. Iron Mike

      03/04/2026

      DC,

      You are opening up a can of worms here and this is not the place for a dialogue on religious theology. So ill keep it short (as possible).

      The figure head of Christianity, Jesus, was not a violent figure. If you look at his main teachings it is mostly about loving one another and being kind to one another. Generally a much more wholesome teachings in my opinion. Very similar to Hindu and Buddhist philosophy actually. I wouldn’t be surprised if he travelled to India in his early years.

      The figure head of Islam, Muhammad. It is hard to deny he wasn’t violent. The whole religion was spread by the sword. Not to mention the pedophilia aspect of it among a lot of things wrong within the core teaching of the religion.

      Now lets get to the followers, human nature is violent and a lot of people have used religion as an excuse to kill what they perceive to be an infidel or a heretic. Christianity being older killed a lot more people than Islam has. Majority of which was done arguably in the dark ages of Europe. But they had their reformation, renaissance followed by the enlightenment period which set the core values of western civilisation. Islam hasn’t had any of that yet.

      To the article, yes Christian and in this case Zionist fundamentalists probably look at this event as some end of the world scenario. Funny thing is so the the Islamic regime of Iran (Shia). They think Imam Mahdi will come and save them from the ‘great satan’.

      Is one more dangerous than the other. Yes Islam is more dangerous from my perspective, growing up in Iran these people are mentally ill beyond what you can comprehend, go look at the ceremony of Ashura, they take one historical event which may or may not have happen and hinge a whole cult mentality on it by self-flagellation, though admittedly they reformed that in some parts but it still happens. The other side is sick too, but at least it no longer enforces its beliefs onto others. (anymore)

      Finally, Islam does not fit WHATSOEVER with western civilisation values. You guys have no clue in the west, but the people who ACTUALLY follow Islam are Islamic State, Taliban, Islamic regime in Iran and what the west calls terrorist organisations. They actually follow what is said by the book.

      The rest is what i’d call good muslims. And they are good because they don’t follow everything by the book whether knowingly or unknowingly.

   4. Iron Mike

      03/04/2026

      Alim,

      You opened a can of worms too so I am going to attempt at addressing some of the points you made. You might not know the intricate domestic issues and looking at it from a wholly outside lens.

      – Yes 47 years of gross mismanagement and corruption didn’t doom the Iranian regime. The final straw was economic initially. Which started early January. 1 USD ~ 140,000 IRR. Finally the hyperinflation straw broke the camels back. Even the Baazaris joined the protests which is very rare since they are traditionally very pro-regime.

      Now after the protests gained some real momentum and even took over some institutions such as police stations etc, Trump tweeted to the Iranian people take over your institutions help is on the way. The next day almost everyone was on the streets, the regime realised they cannot control this, so they shut the internet off and started killing people. They committed a mass genocide, they killed easily between 30k-60k people within a week. Most of the people under 30.

      This was their attitude to the parents who were looking for their kids. You want to see if you kid is dead, you need to pay a fee for the bullets used to kill them + storage fees, then go through a whole factory worth of body bags and check whether they are in one of them. There was still people alive in the body bags for days. They went to hospitals and finished some of the injured off too. I’ve had second hand account of this from relatives and friends there. This is no exaggeration.

      Now you tell me whether a regime can survive, doing this to its own people ?

      To your second point. In the 12 day war, yes you are correct. After the genocide, the hatred of the people grew exponentially for this regime, a huge majority supported this move by Bibi and Trump with open arms. Especially the younger cohort which are the majority demographically in Iran.

      I agree boots on the ground is horrible. I have no idea like everyone else how this thing is going to play out.

      Your last point. I think Iranians look at their neighbours in the Gulf and are like why can’t we be like them ? I don’t think they necessarily want democracy, they want economic stability and a higher standard of living. Both of which is possible, Iran is a country full of wealth and resources. It has a strong sense of history and could have a bright future given proper government and leadership. But first you need a government who loves their country, countrymen and women. For 47 years this regime showed nothing but contempt and hatred towards its own people.

   5. Alimbiquated

      03/05/2026

      Iron Mike —
      Trump is hoping for an uprising, but as Hillary Clinton put it, hope is not a strategy. Bush had the same hope in Iraq and Afghanistan.

      The Kurds are now invading Iran from Iraq, to extend their autonomy there. Other than that, we’ll have to wait and see. A civil war is probably the “best” result Trump can realistically hope for.

   6. Hickory

      03/05/2026

      Thank you for your perspectives Iron Mike. Being the only one here from Iran (that I know of) I take your comments most seriously. Although I do realize that with over 90 million people living in Iran that there are also millions of opinions/perspectives. People who are not from Iran should realize that it is a very big country, with population greater than Calif, NY and Texas combined. Just think of all the various opinions residing in those states.

      i offer up an opinion that isn’t often expressed- The people of Iran, Palestine and Israel would all be much better off if the Islamic Republic of Iran (IRI) gave up its paramount mission of eradicating/eliminating/ entirely destroying Israel. Over the last 47 years the ‘shadow of annihilation’ over Israel has enabled a much more fundamentalist and nationalist movement within Israel to dominate the local politics and policy. Chances of negotiated two state solution to that extremely unfortunate situation have been severely diminished by the pressure applied from Iran. Now very few Palestinians and Israelis can envision any kind of reasonable coexistence, with ‘one state’ outcomes having gained predominance. People on both sides are desperate for security and sovereignty, but a pathway for both to have some of that is very hard to see.

      For the IRI its a religious war against Israel. In the long history of Persia it has been very rare to fight on behalf of Arabs, Turks, or Kurds. Rather they have almost always been in military opposition to these other ethnic groups as territorial or cultural threats. The last war in the 1980’s Iraq attacked Iran, with Iran suffering somewhere between 250 and 750,000 deaths.

      Iran, along with Palestinians/Lebanese (courtesy of Hezbollah) and Israel, will continue to suffer until the IRI abandons Islamic version of a crusader religious war on a country 1000 mile away, its look like to me.

   7. Iron Mike

      03/06/2026

      Hi Hickory,

      I agree with everything you’ve said. From the start they announced their enemy is the U.S and Israel which they declared has to be eradicated from the map.

      A regime replacement which drops these ridiculous death cult ideologies would be beneficial both domestically and international.

      I was born during the Iran-Iraq war, I still remember it, absolutely horrible. Prior to the revolution the Shah’s policy was one of low population growth if any. He actively encouraged people to have less kids.

      Post revolution Khomeini dismantled the Shah’s family planning program, calling it a Western plot. They encouraged large families to build an “army of 20 million,” leading to a massive population boom.

      During the war they brainwashed young soldiers and glorified martyrdom, they would organise sprint races for the youngsters and have them run across mine fields many died or were permanently injured as a result.

      A horrible evil regime from the start to finish.

   8. Matt Staben

      03/12/2026

      In Hoc Anno Domini – Vermont Royster (former WSJ Editor)

      When Saul of Tarsus set out on his journey to Damascus the whole of the known world lay in bondage. There was one state, and it was Rome. There was one master for it all, and he was Tiberius Caesar. Everywhere there was civil order, for the arm of the Roman law was long. Everywhere there was stability, in government and in society, for the centurions saw that it was so. But everywhere there was something else, too. There was oppression — for those who were not the friends of Tiberius Caesar. There was the tax gatherer to take the grain from the fields and the flax from the spindle to feed the legions or to fill the hungry treasury from which divine Caesar gave largess to the people. There was the impressor to find recruits for the circuses. There were executioners to quiet those whom the Emperor proscribed. What was a man for but to serve Caesar? There was the persecution of men who dared think differently, who heard strange voices or read strange manuscripts. There was enslavement of men whose tribes came not from Rome, disdain for those who did not have the familiar visage. And most of all, there was everywhere a contempt for human life. What, to the strong, was one man more or less in a crowded world? Then, of a sudden, there was a light in the world, and a man from Galilee saying, Render unto Caesar the things which are Caesar’s and unto God the things that are God’s.

      … and unto Trump that are Trump’s

   9. Yves T

      03/21/2026

      @Matt staben

      Do you realize Rome has been at war with Iran (Parthes then Sassanide Empires) for 700 years ? And never conquered it ? (even if the Trajan column is one of the most recognized antique monument in Rome today ..)

      As to the current war, a few key things I don’t see discussed a lot, not sure why :
      – US interests in changing the regime go far beyond security concerns for the US and Israel (which of course are real, not to mention the expansionist nature of the regime through Hezbollah, Houthis , etc)
      – These interests mainly center on Oil (but not only, 80 millions people is a big market), and made even more critical considering US tight oil is peaking or is about peaking. Moreover if the regime isn’t toppled, none of these benefits will be “cashed in” (and Iran could go in the Chinese influence sphere).
      – This clearly is hard to sell to Trump electorate and Maga crowd, which I guess is persuaded the US is still full of oil, when they don’t believe in abiotic oil and other non sense. That electorate thinks the US could just rely on its own resource and is doing that war out of good will for the Iranian people, Israel interests only or something.
      – As to Trump himself, I really don’t know to what extend he is aware of the oil situation (would be interested to know what people think on this point here), but I guess people like Rex Tillerson gave him a few hints during his first mandate. One thing for sure in his speech (more than 1 hour) after the Maduro story he was very blunt and direct : He spoke about oil, getting back the oil etc around 20 times, and about the drug story with Maduro as a drug kingpin 3 or 4 times. Same during his speech at the UN, Energy was all over the place.
      – I don’t see the Iranian people being mentioned much in the context of the ongoing war, although I’m quite confident they will be instrumental in toppling the regime, this is more a liberation war than anything else, and don’t forget the 79 revolution was a kind of strange alliance between “communist” /”lefties” and “Islamists/religious”, the communist/lefties having been wiped out after Khomeiny settled. Iranian didn’t forget about that.
      From the Mullah’s own figures, 60% of mosques have closed in Iran for lack of people going to them.
      – If a secular democracy (parliementary monarchy or republic) can be a reality in the region, Iran is clearly, and by FAR, the best candidate.

7. DC

   03/04/2026

   US tight oil centered 12 month average in chart at link below.

   Getting close to peak tight oil.

   tight oil 2603

   1. Ovi

      03/04/2026

      Dennis

      You usually project out a couple of years. Give it a shot.

   2. DC

      03/04/2026

      Hi Ovi,

      The projection would depend on future oil prices. Currently that is difficult to predict. If we use the futures curve for Brent Crude as a guide (price in the range of 67 to 68 per barrel from 2027 to 2033) the following scenario linked below would be my guess. Cumulative tight oil production through Jan 2026 is about 34 Gb, cumulative output reaches 37.5 Gb in Feb 2027 (50% of URR for scenario).

      tight scen 2603

   3. Ovi

      03/05/2026

      Dennis

      What is the main factor driving oil production down after the peak. Fewer Tier 1 wells, completions due to WTI price, other

   4. GigiB

      03/06/2026

      Can you make a simulation with 90-100 $ a barrel? Thanks

   5. DC

      03/06/2026

      Ovi,

      Short answer is falling profits.

      Falling new well productivity per 1000 feet of lateral length has been occurring in the Permian Basin since 2017. I assume this continues as fewer locations remain in tier 1 and tier 2 areas and a larger proportion of well completions occur in tier 3 and higher (4 and 5) areas of the play. I also assume a similar phenomenon occurs in all other US tight oil plays over time. At about $63/b at well head (due to $5/b transport cost to refineries or export hubs) and under $4/MCF (based on futures curve) and with NGL typically at 30% of crude price, fewer wells are completed due to lack of profitability in this scenario.

   6. DC

      03/06/2026

      GigiB,

      The spike in price is due to the war premium, doubtful that prices will remain at $95/bo long term. Current futures curve has Brent back to $69/b in July 2027, see

      https://www.cmegroup.com/markets/energy/crude-oil/brent-crude-oil.html

      Dec 2033 at about $69/b, if we account for inflation, this would be about $61/b in 2025 US$, accounting for $5/b transport cost, the producer would see $56/b in 2025 US$ at the well head and would not see any profits. For this reason completion rate will fall.

8. shallow sand

   03/04/2026

   Several outlets reporting Iraq is out of storage and has shut in 1.5 million BOPD.

   Further that Kuwait will be out of room by 3-18.

   Also reading Trump’s plan for opening the Strait not as simple as it seems.

   1. Coffeeguyzz

      03/04/2026

      Shallow,
      There is absolutely NO way on God’s green earth that ships will get through Hormuz if the Iranians disallow it.

      For about a year and a half, Ansar Allah (aka the Houthis) cut off access through the Suez/Red Sea and their ‘navy’ consisted of no more than a handful of high speed boats.

      Not wanting to get political here, but suggestions of effectively forcing Hormuz access are beyond delusional.
      (Hydrocarbons aside, something like 60/80 percent of the food consumed in the Gulf area is transported through the Strait.)

   2. Nick G

      03/04/2026

      I’m not seeing any sign of careful contingency plans here. Any strategist (heck, any chess player) knows that you have to anticipate your opponent’s plans and have answers to them.

      I’ve seen comments that Iran will suffer from closing the Strait, or that China will object. Well, I’ve been watching the ship traffic, and it looks like Iranian and Chinese flagged ships are going through just fine. The only other ship is adrift and on fire…

   3. Paul Pukite (@whut)

      03/05/2026

      https://www.bloomberg.com/news/articles/2026-03-05/china-tells-top-refiners-to-suspend-diesel-and-gasoline-exports

   4. Andre The Giant

      03/05/2026

      https://www.independent.co.uk/news/world/europe/ukraine-submarine-russia-black-sea-attack-b2885582.html

      Ukraine sunk a docked Russian submarine with an underwater drone.

      I’m now reading that Iran has underwater drones.

      I can see how you can shoot down an aerial drone.

      But an underwater one??????

      Can oil and shipping vessels defend against this?

   5. Andre The Giant

      03/05/2026

      Nick G,

      Trump is notoriously impulsive. He has not thought thru any of this thru.

      He just wants results that make him look good, make him money and who cares about anyone else.

      And when the results are terrible he blames other people.

      https://asiatimes.com/2026/03/us-troops-were-told-iran-war-is-for-armageddon-return-of-jesus/

      Hegseth is a “Rapture Ready” Christian. He wants the end times to come. (i’m not saying I think will become that bad)

   6. Alimbiquated

      03/05/2026

      shallow sand —
      America (and the rest of NATO) really isn’t prepared for the new droned based warfare that is developing in Ukraine. The key is flooding the skies with cheap potentially harmful objects, like a swarm of bees. Iran has been part of that.

      I suspect just threatening to shut down the Straits is deterrent enough for most insurers. Container ship have been avoiding the Black Sea since Putin invaded Crimea, so Russia gets its shipments from the Far East via Petersburg.

      Interestingly, Ukraine has started reaching out to the Gulf Arabs offering to sell them protection against Iranian drones in exchange for war funding. America can’t or at least won’t protect its “allies” there.

9. Andre The Giant

   03/05/2026

   Ovi,

   Copy and Paste Andre’s WTI prediction from last year to this year.

   Award me the TITLE BELT.

   117 WTI end of year, 100 average

   – Trump going after Iran for revenge for assasination
   – Declining permian

   Missed it by a few months.

10. DC

    03/05/2026

    https://oilprice.com/Energy/Crude-Oil/Iraqi-Supply-Loss-Could-Expose-the-Real-Limits-of-OPEC-Spare-Capacity.html

11. Matt Mushalik

    03/05/2026

    Asia is nothing without Middle East oil. Example Australia

    2 March 2026
    Australia’s diesel import dependency on Strait of Hormuz is around 50%. Update with Dec 2025 data
    https://crudeoilpeak.info/australias-diesel-import-dependency-on-strait-of-hormuz-is-around-50

    1. Nick G

       03/05/2026

       This should make more people start choosing to electrify their transportation and kick the oil habit. China is showing the way, at 50% market share. Norwegians have pretty much stopped buying ICE vehicles. Ethiopia has banned the import of ICE vehicles (not next year,not in 2035, but right now).

       Australia’s EV sales grew 38% in 2025, reaching 13% market share. 4 years of growth at that rate gets you to 50% share.

12. Coffeeguyzz

    03/05/2026

    Looks like the refinery in Bahrain just got hit with a missile.
    Refined output about 350,000 bbld.
    Details sketchy/conflicting but the videos that I have seen show a very large fire.

    Things appear to be escalating rapidly.

    1. Nick G

       03/05/2026

       And yet WTI is only at $79, and Brent at $84. Traders seem to be pricing in the war slower than I would have expected.

       Hmmm…

    2. Alimbiquated

       03/06/2026

       The code name is “Epic Fury”, which is the politically correct way of saying “Temper Tantrum”.

       There may be unexpected consequences, as nobody actually thought this through in advance.

    3. gerryf

       03/06/2026

       Nick G,

       … and a day later, WTI is $91.

    4. Alimbiquated

       03/12/2026

       I’m no fan of conspiracy theories, but I can’t help thinking that the guy who comes up with the stupid “operation” names was having a little fun at Trump’s expense. “Epic Fury” is awful close to “epic failure”, and the initials EF also stand for “Epstein Files”. These jokes just write themselves.

13. Hickory

    03/05/2026

    Interesting perspective to consider. The China angle to the Iran conflict
    https://substack.com/home/post/p-189459055

    1. Hickory

       03/06/2026

       meanwhile-
       BYD’s New Flagship EV SUV Blows The Competition Out Of The Water-
       The BYD Great Tang gets a 1,000-volt architecture, 1,500-kilowatt charging, and nearly 600 miles of range.

       https://insideevs.com/news/789214/byd-great-tang-ev-suv-ultra-fast-charging-range/

       Or perhaps you’d prefer a Buick-
       A plug-in hybrid Buick minivan is now the world’s longest-range multi-purpose vehicle. [available in China]

       https://insideevs.com/news/789066/buick-gl8-ls-phev-range-record-china/

    2. LeeG

       03/06/2026

       Worthwhile article but the last sentence is a head scratcher.

       “ Trump’s strikes are the first move by an American president who appears to understand that the road to the Pacific runs through Tehran.”

       1. implying that Donald is implementing a long range strategy isn’t supported by his words or actions as much as he is a useful tool for powerful interests.

       2. Demonizing Iran and China isn’t a realistic path to promoting the general welfare in the US.

    3. Hickory

       03/07/2026

       LeeG- I agree with your point/s.

14. shallow sand

    03/05/2026

    Bessent is going to use US taxpayer dollars to intervene in the crude oil futures market.

    You just cannot underestimate the lengths the administration will go with our money. Costing us almost $1 billion per day on this war, and that doesn’t count the F-15’s Kuwait shot down, nor the billion dollar radar destroyed by an Iranian drone.

15. DC

    03/06/2026

    Brent May futures contract now at about $89/bo.

16. SRSrocco

    03/06/2026

    Looks Like $100 Oil Comes In A Few Days At This Rate

    According to a JP Morgan analyst, after the next three days, we will enter into a Commodity Crisis, led by Oil. Even the coal price is up 17% over the past 4-5 days.

    Furthermore, the damage done to the U.S. Military Bases in the Middle East is far more extensive than we hear from the MSM, an estimated $2 billion in damages in just the first two days of the war.

    I’ve seen estimates on the Boob Tube that the U.S. Military is spending ~$1 billion a Day in this War, which already has cost $4 billion.

    How many more days before this situation in the Middle East really gets out of control??

    steve

17. old chemist

    03/06/2026

    Interesting graphs on US gasoline consumption

    https://wolfstreet.com/2026/03/04/u-s-gasoline-demand-fell-further-amid-long-term-structural-shift-plunging-per-capita-consumption/

    1. Nick G

       03/07/2026

       Yes, we’ve seen peak ICE vehicle in the US and in the world.

    2. Paul Pukite (@whut)

       03/07/2026

       ” In 2020, the US became a net exporter of crude oil and petroleum products, exporting more than importing. “

       Always find this interesting considering extraction is 13 million barrels while consumption is 20 million.

    3. Nick G

       03/07/2026

       Paul,

       We tend to focus on crude and condensate on POB, to have consistency in analysis. Most people include any liquids you can burn (or convert into something else useful…). That gets you to: Total Petroleum Production: Approx. 21.69 million b/d (2023 data).

       That total includes:
       C & C: Record-high production reaching 13.4–13.6 million b/d in 2024–2025.
       Natural Gas Plant Liquids (NGPLs): 6.43 million b/d.
       Biofuels & Others: 1.3 million b/d.
       Refinery Processing Gain: ~1 million b/d

       Roughly half of NGLs are exported. That more than accounts for positive net exports.

    4. DC

       03/07/2026

       Paul,

       Consumption of C+C is about 16 Mb/d (input of crude oil to refineries), so for C+C, US net imports of C+C are about 2 to 3 Mb/d. The claim by some that the US is a net exporter of oil is false, the US is a net exporter of NGL.

    5. Paul Pukite (@whut)

       03/09/2026

       Agree. Just find it interesting in that the caveats are never mentioned, and how the public is always lead to believe that the USA is in any way self-sufficient. And it will only get worse.

    6. Nick G

       03/09/2026

       Paul, DC,

       Crude is cheaper than refined products. The US has a fairly significant positive balance of trade in liquid fuels. That means that when the price of oil jumps, the US benefits.

       That’s an important factor in this situation.

    7. DC

       03/09/2026

       Paul,

       I was watching Morning Joe and even their stats guy didn’t understand this, he was claiming the US is a net exporter because he doesn’t realize that C+C is the crucial liquid that is actually “oil”. When you look at net imports of US C+C you find the US imports less than in 2005 to 2008 when it was about 10 Mb/d, but we still import more C+C than we export and many are not aware of this. See chart at second link below from first link below

       https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRNTUS2&f=M

       chart(117)

    8. DC

       03/09/2026

       Nick G,

       Keep in mind that a large proportion of those “liquid fuels exports” are propane, ethane, and butane, essentially bottled gas. The prices of these gas products are not really linked to crude prices, it is a separate market.

       We do have some net exports of gasoline, diesel, and jet fuel, on the order of 1.8 Mb/d in 2025 out of roughly 4.98 Mb/d for all products. But when we look at crude plus products the net exports falls to 2.8 Mb/d because we had net imports of about 2.2 Mb/d of C+C in 2025. About 2.9 Mb/d of the net exports were hydrocarbon Gas liquids (essentially the product form of NGL).

       Yes there is a markup for refining crude into gasoline, diesel and jet fuel so the exports of the crude oil products will bring some profits to the refiners on their imported oil.

       Also keep in mind that higher crude prices tend to increase the prices of refined products in the US and this tends to be inflationary in the domestic market.

    9. Nick G

       03/09/2026

       Dennis,

       I agree with your points but…we still have a noticeable dollar surplus in petroleum products. We’re the mirror image of Mexico, which is also a net exporter of petroleum products, but exports crude and imports refined products which means they have a dollar trade deficit.

       And, yes, higher crude prices increase refined products prices in the US, but it doesn’t bleed into non-energy inflation much. It does increase the CPI (about 9% of the CPI is energy), but the Fed ignores that these days in favor of core CPI and PCE, unlike in the 1970s.

       Sadly, oil companies don’t care about inflation, and Texans don’t worry about the effect of high prices on oil importing US states. The oil industry has bought this presidency – we know because it was for sale, and the purchase was right out in the open.

       At the end of the day, this is not the 1970’s, in many ways. Fortunately, one important difference is that there are very clear and superior substitutes for oil and FF, and this war will accelerate the transition to them. That’s a fairly big silver lining.

    10. DC

        03/10/2026

        Nick,

        Oil prices do bleed into other sectors as oil products are used to transport goods and people driving up both prices and wages which leads to inflation. Also in the news cycle it is the headline inflation that tends to be reported and that includes energy prices. To politicians the price at the gas pump is quite important as the majority of consumers continue to use ice powered transport.

        I agree there is a dollar surplus in petroleum products as one would expect because there is a cost to refine crude into products, in volume terms the net exports in products from crude is similar to the net imports of crude, and products have a higher value.

        If one is focused on trade deficits like Trump, this is important. Most economists would say this is of third order importance.

    11. Nick G

        03/10/2026

        Yes, the amount of money that flows in or out of the US is now a 3rd order effect. 50 years ago it was a 1st order effect.

        OTOH, you’re focusing on the real problem: US consumers. Very large amounts of money are flowing out of the pockets of consumers, into the pockets of producers. Sadly, the US car industry has managed to con consumers into buying low-mileage high-profit status symbols.

18. Nick G

    03/07/2026

    US oil producers are rushing to lock in higher prices by hedging. Is this raising production?

    I’m surprised that prices aren’t rising faster. Is this surge in hedging helping to hold down the rate of increase in prices, at least temporarily?

    https://www.reuters.com/business/energy/investors-us-crude-producers-scramble-lock-oil-price-spike-2026-03-03/

19. Ovi

    03/07/2026

    Rig Report for the Week Ending March 6

    The rig count drop that started in early April 2025 when 450 rigs were operating rose for the third consecutive week this week. Drilling continues at a steady rate of 365 ± 5 rigs per week since August 2025. However this week the rig count spiked up and WTI closed above $90/b.

    – US Hz oil rigs rose by 5 to 371, down 79 since April 2025 when it was 450. It was also up 9 rig from the low of 362 first reached in the week ending August 1. The rig count is down 17.5% since April 2025.
    – New Mexico Permian was unchanged at 91. Eddy and Lea held steady at 33 and 58 respectively.
    – Texas added 5 to 170. Midland and Martin both dropped 1 to 21 and 23 respectively. Andrews, Dimmit and Upton added 2 each while Ector added 3. A couple of counties dropped 1 each.
    – Eagle Ford added 3 to 31.
    – NG Hz rigs dropped by 3 to 112.

    A rig

20. Ovi

    03/07/2026

    Frac Spread Report for the Week Ending March 6

    The frac spread count rose by 3 to 170. From one year ago, it is down by 40 spreads and is down by 45 since March 28.

    A frac

21. Ovi

    03/07/2026

    WTI since January 2023

    Companies that were producing 1 Mb/d on December 16, 2025 are making an extra $35 M/d or an extra $1 B/mth.

    However some OPEC countries now have to limit production because of the closing of the Straits of Hormuz.

    Iran war forces OPEC nation to limit oil production

    https://www.independent.co.uk/news/world/middle-east/kuwait-oil-iran-war-trump-b2933548.html

    A WTI

    1. DC

       03/07/2026

       Ovi,

       Producers may not increase drilling or completion until they see oil prices maintained at some level for a few months. The futures market suggests most who trade the futures contract believe this price increase will be temporary. Producers are likely to just collect the profits for now and wait to see what happens in the future.

    2. Ovi

       03/07/2026

       Dennis

       I was surprised to see the jump of five rigs last week. Let’s see if it jumps again next week. That will give some idea of whether a $25/b increase in WTI brings on more rigs.

    3. Sheng Wu

       03/07/2026

       exploration drilling exploded 2 months ago, obviously they had inside note from Trump

    4. DC

       03/07/2026

       Ovi,

       We will need to wait and see if the increase in rigs continues. Many producers may not be willing to bring more rigs online if they believe the current price increase will be short lived.

22. DC

    03/07/2026

    At $95/b for crude and NGL at 30% of crude price and natural gas at $4/MCF, the average Permian well for a high price scenario ($95/b) in 2035 falls to 355 kb of crude over the life of a new well. Such a well at these prices has an average annual return of 2% per year over a 15 year well life, this barely keeps up with inflation and for my scenario, the completion rate starts to decrease in late 2035. Permian high price model below.

    permian high price 2603

    1. Sheng Wu

       03/07/2026

       355kbo EUR + gas and NGL EUR at $95 WTI is total $35million+?
       How could the return still so miserable?

       The majority of the EUR is front loaded in first 5~6 years, so the return should be even better.

    2. DC

       03/07/2026

       Sheng Wu,

       Over the first 5 to 6 years the capital cost is being paid off. I take net revenue over the life of the well and divide by capital cost. The total return is averaged over the 15 year life of the well. The average return over 15 years is about 2% per year.

    3. DC

       03/09/2026

       Sheng Wu,

       There are royalty payments, severance taxes, operating costs, overhead, transportation costs and downhole maintenance over the life of the well and then plugging costs at end of life. Gross revenue is not very important, it is the discounted net revenue over the life of the well that matters.

       Also not likely that oil price remains at $95/b for 15 years, so the $95/b price assumption for 15 years is very optimistic.

23. DC

    03/07/2026

    Permian low price scenario for comparison, URR is about 11 Gb (20%) less than high price scenario. Low price=$65/b, high price=$95/b. both in 2025$.

    Note that this low price scenario is probably on the optimistic side. At low prices the completion rate may decrease far more rapidly than I propose in this scenario.

    permian low price2603

24. Coffeeguyzz

    03/07/2026

    Looks like the Tondgouyan refinery just outside Tehran has been attacked.
    Reciprocal – as in targeting regional energy infrastructure – seems to be both a logical and imminent response.
    Coupled with reports of the bombing of a somewhat small water desalination plant (in southern Iran, IIRC), the rapidly unfolding events are spiraling downwards into the realm of global chaos unimaginable just a short time ago.

    Buckle. The. Fuck. Up.

    1. Sheng Wu

       03/07/2026

       Iran is shelling back with cluster bomb

25. DC

    03/07/2026

    Alternative low price Permian scenario with lower completion rate. URR=37 Gb see link below. This scenario seems more realistic for oil prices at $65/b in 2025$ (pre-war oil price).

    permian low priceb 2603

26. SRSrocco

    03/07/2026

    Kuwait declares force majeure, cuts crude oil output due to Middle East conflict

    March 7 (Reuters) – Kuwait Petroleum Corporation began cutting oil output on Saturday and declared force majeure, adding to earlier oil and gas reductions from Iraq and Qatar as the U.S.-Iran war blocked shipments from the Middle East ​for the eighth consecutive day.
    ————————

    Looks like $100 Oil is likely a done deal Sunday-Monday.

    How do we get to $150-$200 Oil? Send in the U.S. Marines.

    steve

    1. Andre The Giant

       03/07/2026

       https://mishtalk.com/economics/kuwait-petroleum-declares-force-majeure-on-sales-of-oil-and-refinery-products/

       Mish is doing some good reporting on this as well.

       Underwater sea drones. Can’t be stopped by commercial vessels.

       And they are relativeily cheap…there in lies the very scary problem….
       (unlike a submarine)

       Maybe the US Navy can send an electromagnetic weapon down there….but unintended consequences?

27. Hickory

    03/08/2026

    Off ramps?
    Most oil importing countries are going to get extremely hot and bothered by a shutdown of the Strait of Hormuz and damaged oil export facilities in the Gulf, within a few weeks.
    The international pressure on Iran to allow shipping, and on the US/Israel to halt attempts at wholesale regime change is going to ramp up big time, soon. But neither of these three entities will have what they vehemently desire.

    It is highly doubtful that a bombing campaign will get the IRI and its fervent supporters to fade into the woodwork and allow other factions to slide into control. They will ride things out for a very long time, short of a massive invasion or wholesale civil war involving millions. That latter scenario will be a very long bloodbath, and both scenarios do not allow a quick return to safe shipping.

    Can anyone be confident that the IRI and its supporters (5-30 million) will give up on the United Islamic Republic project, and the goal of eradicating Israel from all maps. I can’t see it.
    And I don’t see the people of Israel learning to live with the perpetual threat of annihilation without putting up a massive fight for survival to the very end.

    So, does anyone really see a way that oil, nat gas and commodities will flow from the Persian/Arabian Gulf anytime soon?
    ______________________________________________

    “The Gulf of Arabia (Persian Gulf) is a critical source for global commodities, with over 5 million metric tons of primary aluminum (roughly 8-10% of global supply) and roughly 33% of the world’s fertilizer supply transiting the Strait of Hormuz. Major exporters include Saudi Arabia, UAE, Qatar, and Iran, with significant, amounts of nitrogen fertilizers and aluminum shipped to Asia, Europe, and the US.”

    1. Hickory

       03/08/2026

       Side effect- there will be big pressure to for Ukraine to capitulate to Russian territorial annexation, so that Russian export commodities can be rapidly de-sanctioned.

    2. Coffeeguyzz

       03/08/2026

       Hickory,
       “… within a few weeks”.
       Already, ~8,000 miles from Hormuz, the large diesel distributor in Brisbane has halted sales to customers who do not have contracts.
       This imperils food production from this high yielding, very fertile region.
       Reports coming out that Oz may be completely out of diesel, avgas and petrol this time next month.

       Global ramifications of current events are as imminent as they are profoundly disrupting.

28. Hickory

    03/08/2026

    This author hits a lot of nails directly on the head, worth considering all the points made-

    https://substack.com/home/post/p-190073150?source=queue

    ‘Faced with the reality of foreign bombs, the Iranian populace prioritizes national survival over political reform.’

    1. Yves T

       03/21/2026

       https://x.com/femmeazadi/status/2032571136311951517

29. SRSrocco

    03/08/2026

    The Longer The US-Israel-Iran War Lasts, The Worse It Will Be For The Global Economy

    The reason I say that is because the U.S. is sitting on the Edge of a Massive AI-Bubble Recession, which looks like it has already started with the 92,000 job losses as just one indicator.

    According to Bloomberg:

    Oracle and OpenAI End Plans to Expand Flagship Data Center

    Oracle Corp. and OpenAI have scrapped plans to expand a flagship artificial intelligence data center in Texas after negotiations dragged over financing and OpenAI’s changing needs.
    ——————

    Supposedly, Meta wants to step in and snatch up excess AI Capacity. This will be a Big Mistake for Meta, but there isn’t much wisdom today in High-Tech.

    Watch as more Large AI Data Center Projects get cancelled as completed projects go bankrupt in the years ahead. Unfortunately, the market, except for a few wise individuals, doesn’t realize AI ain’t AI; it’s lame LLMs that don’t really live up to the promises made.

    Even if LLMs did efficiencies, like Coding, the cost of LLMs isn’t profitable. Thus, the market will figure this out shortly.

    Now… with this AI-High-Tech HPC-Bitcoin Bubble being a large percentage of U.S. GDP, the coming Gutting of the Global Economy from the massive disruption of the US-Israel-Iran War, then the Recession and Stock Market Selloff will be much worse… thanks to the current Trump Administration.

    Oh, I forgot… Cuba is Next. LOL, what an insane asylum running the show.

    Grab Your Popcorn…

    steve

30. Kleiber

    03/08/2026

    Oil futures up 20% and hauling ass.

    lol, everything is so stupid.

    1. Coffeeguyzz

       03/08/2026

       Kleiber,
       Yeah, oil markets have been open barely a half hour as I type this (they open 1800/6 PM now eastern daylight time) and Brent spot price shot up from ~$92 to over $107 from Friday’s close.

       Quick edit …
       As I was typing the above sentence, I went back to the open ‘Oil Price dotcom’ tab and hit refresh.
       Sunuvagun … price for both Brent and WTI are now well above $108 with WTI actually higher.

       … Yeah, gotta stop now as prices are over $109 as I keep typing.

       For any and every one who might be reading, to say we are in absolutely uncharted territory would be to state the obvious.
       Sincere good luck wishes to all.

31. HHH

    03/08/2026

    WTI $118

    Only matters where it closes tomorrow afternoon though. Might close higher, might close lower.

    WTI was above Brent. At least for a few minutes. Nothing inflationary about this. This is the setup for a hard recession.

    1. HHH

       03/08/2026

       There will be a mad rush for dollars soon if this keeps going. Forced selling of other stuff to get dollars that is.

       That forced selling may or might not include government bonds, gold, Swiss francs are down rather sharply. Because there are plenty of dollars piled up in the Swiss banking system. The Franc usually acts as a safe haven. Not so safe when liquidity disappears and you have to get dollars wherever possible.

32. Nick G

    03/09/2026

    • South Korean President Lee Jae Myung is arguing that his country “should not merely endure the recent global oil price surge and fossil fuel supply chain crisis—triggered by the Iran situation—but instead use this as a pivotal moment to completely overhaul its national energy structure,” the Chosun Daily reports.

    “I think this would be a good opportunity to swiftly and extensively transition to renewable energy,” he said.

    • UK Business Secretary Peter Kyle announced that the country would accelerate its net-zero strategy, emphasizing “that accelerating the deployment of renewable energy technologies, such as offshore wind and solar power, will help reduce Britain’s reliance on oil and gas imports from politically unstable regions,” London Loves Business writes.

    “Doubling down on renewables is, yes, right for climate change, it’s, yes, right for jobs,” Kyle said. “It is also essential because we keep on seeing these lived examples of how instability, through regional instability, is creeping into our energy prices, for which the British government has no agency.”

    • Energy Transition Africa says the first attacks on Iran changed the continent’s transition debate overnight. “The first alert didn’t come from a climate report, but from the market,” the organization recounts, with crude oil prices surging on even the possibility that Middle East shipments would be disrupted.

    The week’s events have African governments and investors “once again prioritizing a question that climate narratives sometimes treat as secondary,” the independent media platfom adds: “Can an energy system keep functioning under geopolitical stress? The shift is subtle but decisive: transition is increasingly framed as security-aware electrification, not only climate-aligned decarbonization.”

33. shallow sand

    03/09/2026

    G7 coordinated SPR release has gotten WTI futures to drop about $20.

    Will drop US SPR to about 300 million, maybe less.

    Trump only added 20 million back during his Presidency. Biden had added back 48 million after dropping it to a low of 347 million.

    1. DC

       03/09/2026

       The SPR provides about a 450 day cushion (assuming 20% loss of crude barrels flowing through Hormuz and assuming 90 day supply of 100% of crude demand). So maybe we are ok for 15 months, not clear the objectives in Iran are achieved in that time frame.

       The Biden drawdown was determined by laws passed by Congress and signed into law by Trump and Obama in his first administration (though Biden accelerated the timing).

    2. Kleiber

       03/09/2026

       Iran very likely won’t open the strait again until the US has removed all bases (what’s left) and Israel disarms. Otherwise, open season on any ship going through.

       France has announced two frigates to go open the thing. Uh, good luck.

    3. Hickory

       03/09/2026

       A big factor in how this all progresses (Hormuz) is just how many missiles and drones that Iran still has left, and how quick their manufacturing pace is for stockpile replenishment.
       Also- mine-laying ships, subs and waterborne drones.
       I have seen various reports over the past week about these capabilities being heavily targeted by the US and Israel.

    4. Paul Pukite (@whut)

       03/09/2026

       And the discussion already is that the USA is “running out of ammo” — this is just so bizarre considering how much is spent on defense. Realize that without ammo, there really is no military, you can have the fastest jets but that won’t matter without ammo.

    5. Sheng Wu

       03/09/2026

       Venezuela oil ramp up could be super fast, just 10 shipments of 1million barrel of condensate in a month, and could bring out 1million barrels of heavy crude each day.

       https://www.reuters.com/business/energy/venezuelan-oil-output-could-return-pre-blockade-level-by-mid-2026-eia-says-2026-02-10/

    6. Nick G

       03/09/2026

       Paul,

       Apparently the US military, left fairly incompetent by the political purges by the current president, didn’t notice that Iran had a very large supply of effective drones. They should have known, as it became quite clear in Ukraine. So, these cheap drones are being stopped by very expensive precision ordnance, which is somewhat limited in supply.

       It’s an asymmetrical war of attrition which the US was not prepared for, in part because this is a capricious, unplanned military adventure which is very likely intended as political theatre for the US mid-terms.

       The Iranians know this, and they’re determined to embarrass the US (and, of course, survive). Of course, the US already looks ridiculous to the rest of the world – the president has literally provided 10 different explanations for this war – so I guess you’d have to say the Iranians are determined to further embarrass the US.

34. DC

    03/09/2026

    https://oilprice.com/Energy/Crude-Oil/Why-100-Oil-Isnt-Going-to-Spark-a-New-Shale-Boom.html

35. DC

    03/09/2026

    Brent crude price

    brent_crude-2026-03-09

36. Alimbiquated

    03/10/2026

    The wild swings in oil prices are typical of Trump’s behavior. In his first term he damaged the car industry severely with erratic trade policies. Specifically he nearly shut down the chips-for-cars industry. It took years to recover, and now he’s back.

    This is crashing the economy because if nobody knows what prices are. Even the price of basic materials like steel and lumber are in legal limbo.

    The errors are now baked into the system. Imagine you bought imported raw materials for your production from an importer. The importer passed the tariffs on to you, but they are now expecting a refund from the Trump administration. Do you demand a refund from the importer or eat the loss while your competitor buy at the new price? how long will all this take?

    Trump illegally grabbed $175 bn and is stonewalling on paying it back. This is typical Trump behavior — delay in court until the problem goes away. He has also introduce new tariffs, which will be challenged in court as well. In the meantime, nobody in America knows the price of any imported goods. Wild swings in oil prices are just compounding the problem.

    1. Nick G

       03/10/2026

       Yeah, he’s doing enormous damage to the US car industry by pushing them to make low-mileage vehicles. Low mileage vehicles are high profit – it’s very hard for car company execs to say no to investors who want short term profits to fund stock buybacks. They need a government referee that maintains efficiency CAFE rules that push the industry to compete with China. By the time he leaves office China will have taken the export market in the rest of the world, and will be moving in on the US, leaving US car companies as niche manufacturers of ICE vehicles that the rest of the world doesn’t want.

    2. Sheng Wu

       03/10/2026

       Not just US auto industry, Japan also increased price for basic gas saving cars like Corolla by 50% in the past 6 years in Japan (converted to same USD), while dropping price in China by 35% (converted to same USD), now the difference is almost 50percent (22K USD in Japan and 13K USD in China).

       Most of the auto parts are much cheaper in China than the rest of the world, and recently China imposed restriction to Japan industrial products include lots of basic steel parts, like springs, bearings and axle joints, can not believe it!!!!

       Guess that the only countries in the west that could produce such basic heavy industry parts at lower cost and large quantity are limited to Korea and Ukraine now.

    3. Alimbiquated

       03/11/2026

       I’ve been saying for some time that the future of the car industry is Chinese and electric.

       All traditional car makers are trapped by the “innovator’s dilemma” — the can only move forward by undermining their current business model.

    4. LeeG

       03/11/2026

       Alim, my $.02 is that the future of the car industry in the US is fewer cars.

37. Sheng Wu

    03/10/2026

    We’re gonna win so much, you may even get tired of winning. And you’ll say, ‘Please, please. It’s too much winning. We can’t take it anymore, Mr. President, it’s too much.

    UK want to send 2 AC, and Trump said “no longer needed”

38. DC

    03/10/2026

    Recent STEO forecast for Brent crude price at chart linked below.

    chart(118)

39. shallow sand

    03/10/2026

    Energy Secretary Wright’s tweet (which was false) really moved the oil market. Same with President Trump’s interview with CBS News.

    As I thought it would be, the Strait of Hormuz is the whole deal.

    1. DC

       03/11/2026

       shallow sand,

       You are wise, think we may see oil prices continue to rise.

40. DC

    03/11/2026

    https://oilprice.com/Latest-Energy-News/World-News/Cargo-Ship-Hit-by-Projectile-in-Strait-of-Hormuz-as-Tanker-Crisis-Continues.html

    OPEC Big 4 have reduced output by about 5 Mb/d. It will be difficult to replace this oil, though releases from SPR could help. US imported about 6 Mb/d of crude oil in 2025 with about 4.3 Mb/d coming from Canada and Mexico (3.9 Mb/d from Canada). So only 1.7 Mb/d of crude imports from outside North America. The US has about 413 million barrels in SPR so enough for 243 days (8 months) at 2025 average crude consumption assuming crude oil imports from Canada and Mexico remain at 4.3 Mb/d.

    Note that Trump has been pissing off our neighbors so it is possible that crude imports from Canada and Mexico may fall in 2026 and beyond.

    Also note that if there were no crude oil imports to the US and consumption of crude remains at the 2025 level, the SPR would be depleted in 69 days. Note that the crude oil exports by the US are tight oil which US refinery capacity is unable to handle. Most refinery capacity in the US is designed for heavier grades of crude that must be imported. Hopefully not much of the SPR is tight oil as that would not be useful at present because tight oil output is more than current refinery capacity that can utilize this lighter crude.

41. DC

    03/11/2026

    https://oilprice.com/Energy/Crude-Oil/What-Can-Saudi-Arabia-Do-to-Stop-Oil-Prices-From-Spiking-Further.html

    Short answer is not much. Spare capacity and reserves are far lower than claimed by KSA.

    1. Hickory

       03/11/2026

       With Hormuz effectively shut, Saudi max export capacity declines roughly 2-3 Mbpd (as does export capability from Kuwait, Iraq, Qatar and much of the UAE).
       4-5Mpbd export capacity by Saudi east to west pipeline exists however it may already have been at capacity…on this I have no idea.
       So, any spare capacity is a mute point if it can’t be exported.

       note- ‘If the Strait of Hormuz closes, the UAE can export approximately
       1.5 million barrels of crude oil per day using the Habshan-Fujairah pipeline.’ That export terminal is on the Gulf of Oman about 90 miles south of the narrowest portion of the Strait of Hormuz, but still only 70 miles across from Iran.

    2. DC

       03/11/2026

       Hickory,

       Excellent point.

       Saudi exports before current crisis were about 6.5 Mb/d and the east-west pipeline will struggle to reach that capacity, nameplate is 5 Mb/d. So it is likely that Saudi exports will decrease by 1.5 Mb/d, UAE can also bypass Hormuz with about 1.5 Mb/d of capacity, so about 8.5 Mb/d of capacity (at 2025 export level of 15 Mb/d of crude flow through Hormuz) is at risk. Approximately 10% of World C+C output. The 400 million barrel release by the IEA recently announced, at 8.5 Mb/d would last about 47 days.

       Iran may attack these pipelines in KSA and UAE or the loading terminals, we will see.

       Some info in piece linked below

       https://houseofsaud.com/aramco-east-west-pipeline-red-sea-yanbu-hormuz-bypass/

    3. Hickory

       03/11/2026

       Also keep in mind that the countries (IEA) planning to release oil from storage do not necessarily have a big enough spigot capacity to match what supply usually comes through from Gulf. I don’t how much supply they can get to flow to market per day.

    4. DC

       03/11/2026

       Hickory another good point. Thanks.

       US SPR currently at 413 Mb has maximum flow of 4.4 Mb/d, all IEA members have SPR of about 1200 Mb, assuming it is a similar rate for all members this suggests about 13 Mb/d maximum flow rate, enough to offset the roughly 8 to 9 Mb/d of Gulf Nation output that must pass through the Strait of Hormuz. The 1200 Mb SPR for all IEA members could offset the crisis for 5 months, but note that China and India are not be part of the IEA and no doubt they also have their own SPR, but they may be getting much of their imports from Russia that are not affected by the current crisis.

42. DC

    03/11/2026

    https://oilprice.com/Latest-Energy-News/World-News/G7-Backs-Oil-Reserves-Release-to-Curb-Middle-East-Supply-Crunch.html

    Using numbers in piece linked above we have about 1800 million barrels in IEA SPR and 20% of World crude output behind Strait of Hormuz so about 16.8 Mb/d (assuming World output of 84 Mb/d). So a release from SPR would cover this loss for about 107 days (less than 4 months) assuming no change in output from other nations not affected by Hormuz. Releasing crude from SPR is a very temporary ( 4 month) solution.

    Seems Trump did not really think this through.

    1. shallow sand

       03/11/2026

       Have to think at some point in the near future an international armada will be able to start getting some tankers through.

       Still a lot of unknowns here.

       Wonder if this is why Gulf OPEC ramped up production ahead of this to cause a surplus?

       Also have to wonder about Iranian exports. They have been significant.

    2. DC

       03/11/2026

       Shallow sand,

       Iranian oil will get through unless US Navy blocks or seizes the oil, if that happens then Iran will also stop shipping oil. The 20% estimate is total crude flows through Hormuz and probably includes Iranian crude, possible that the 20% refers to crude plus product flow, this is not very clear. An article from EIA in 2023 linked below suggests around 16.4 Mb/d of C+C in 2018 flowed through Hormuz which was about 20% of World output in 2018.

       https://www.eia.gov/todayinenergy/detail.php?id=61002

       Maybe naval escorts and mine sweepers will get the job done, but still seems the risk may be more than many shipping firms may be unwilling to take unless the transport charges double.

       IEA at link below has about 15 Mb/d of C+C transiting via Hormuz, about 18% of the most recent 12 month World C+C output (84 Mb/d).
       https://www.iea.org/about/oil-security-and-emergency-response/strait-of-hormuz

    3. Hickory

       03/11/2026

       Shallow- underwater mines could make the armada attempt a very risky/ineffective endeavor.
       May not be nearly as practical/viable as many of us might assume. Estimates are that Iran has over 5000 mines.
       I have heard that the US mine sweeping capacity is weak in the region-

       https://www.navalnews.com/naval-news/2025/09/combat-ineffective-littoral-combat-ships-are-replacing-mcm-ships-in-bahrain/

       https://www.flyingpenguin.com/trump-gutted-the-minesweepers-then-trump-started-the-mine-war/

    4. Seppo Korpela

       03/11/2026

       This is a flow versus stock issue. If the flow of 2 Mbd is reached, then the deficit is still around 4 Mbd.

       With chatGPT
       1991
       Gulf War
       ~2 million b/d for ~30 days
       2005
       Hurricane Katrina
       ~2 million b/d short-term
       2011
       Libya civil war disruption
       ~2 million b/d equivalent

    5. Kleiber

       03/12/2026

       There is no viable way to form an armada to escort tankers. It’s a suicide run, even if the US didn’t retire (two months ago!) their last four minesweepers in the ME. Even during the tanker wars, which were nothing like this, an LHD of the USMC almost got sunk.

    6. DC

       03/12/2026

       Professor Korpela,

       The US only imports about 2 Mb/d of C+C from nations outside of North America, so the 2 Mb/d release from SPR will cover any deficit from outside of North America for about 6 months. This assumes no change in US C+C imports from Canada and Mexico from the 2025 average level.

    7. Laplander

       03/12/2026

       Well DC, it´s all well and dandy for the US then, it´s a good thing having the SPR filled up to the brim but there is a world outside that might have opinions on things at the moment…
       Several countries have forbidden exports of finished products lately I´ve read btw, might be an issue forwards one would think?

43. Hickory

    03/11/2026

    If this conflict results in a big oil spill in the Gulf then desalinization plants could be fouled.

    “Gulf countries, including Kuwait, Oman, Qatar, and Saudi Arabia, rely on desalination for a significant portion of their water, ranging from 50% to over 99% of their potable water needs, according to
    Alhurra. In Kuwait and Oman, nearly 90% of drinking water is desalinated, while it accounts for 70% in Saudi Arabia.”

    1. Alimbiquated

       03/12/2026

       GCC countries also discharge vast quantities of raw sewage into the gulf. This is mostly water that has been previously desalinated.

       I burn my candle at both ends,
       It will not last the night.
       But ah my foes and oh my friends,
       It gives a lovely light.

       — Edna St. Vincent Millay

44. shallow sand

    03/11/2026

    Reading reports that two tankers are on fire in the Gulf.

    Also listened to a retired Navy higher up explain why we won’t be able to open the Strait without a major land invasion.

    1. Kleiber

       03/12/2026

       Which is never happening. Sounds like the idiots who wandered into this could have thought about this problem in the first minute of planning and realised why fifty years of US presidents didn’t attack Iran for this very reason.

       Talk about a self own.

45. DC

    03/12/2026

    https://oilprice.com/Energy/Crude-Oil/Shale-Producers-Stay-on-the-Sidelines-as-Oil-Crisis-Deepens.html

    and

    https://oilprice.com/Energy/Energy-General/The-Strait-Is-Closed-the-Story-Keeps-Changing-and-Youre-Paying-for-It-All.html

    and Brent futures currently trading at about $99/bo

46. Andre The Giant

    03/12/2026

    https://x.com/IranObserver0/status/2031868153945317512?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E2031868153945317512%7Ctwgr%5Ebb09e1b8c46af974d424bfa7e49e0d53bec2524b%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fmishtalk.com%2Feconomics%2Fthree-oil-tankers-on-fire-following-trumps-advice-crude-jumps-again%2F

    US owned oil tanker sunk by underwater sea drone

    Lets be honest and start taking Big Andre’s predictions more seriously.

    ANDRE IS BIG

    1. Andre The Giant

       03/12/2026

       Set on fire by sea drone, not sunk.

       Sorry guys Andre isn’t PERFECT with his predictions

47. Ovi

    03/13/2026

    An update to World Oil Production has been posted

    https://peakoilbarrel.com/november-world-oil-production-slides/

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