Tag Archives: Oil

September 28, 2024 · 22:22

How I fall short

That is the stage, that is the setting. I do not know everything (too boring anyways) and even as I see how things develop and are optionally staged. The fact that I do not know everything gets in the way of some things. Now, I know very little about oil. It is a commodity everyone needs, it is a commodity only some countries have and the two biggest players in that field are Aramco and ADNOC, oil is black and it is needed for the production of petroleum. That’s about all I know. The current price is about $68 dollars per barrel. So when I saw ‘Oil price drops, and BP and Shell shares slide, as Saudi Arabia ‘prepares to abandon $100 crude target’’ I didn’t think too much of it. The story comes from the Guardian (at https://www.theguardian.com/business/live/2024/sep/26/european-reconstruction-bank-cuts-growth-forecasts-energy-ukraine-elon-musk-uk-investment-summit), there were more sources, but I am handing you this one. We get “Saudi Arabia is reportedly ready to abandon its unofficial price target of $100 a barrel for crude as it prepares to increase output” yet Oil&Gas journal gives us “Saudi Arabia is preparing to abandon its informal target of $100/bbl for crude oil as it plans to increase production, signalling the kingdom’s acceptance of a period of lower prices and intentions to take back market share, according to sources cited by the Financial Times”, now in my book the shortage of one commodity means prices go up. I do understand that any player will protect market share, as such I get the increase of product to protect your market share. That makes sense. And as such we see Saudi Arabia deciding an increase for about 1 million barrels per day as per December 2024. There are a few players on this field and I like the idea that the increase will make sure that Russia has less customers to get it from Russia is not happy. And as several media are giving us the goods, there is no other way for me than to agree with the setting. In overall there is still a larger concern I have. Oil is a commodity with a finite supply, so how much supply is there? I believe that the middle east has the bulk of it, but the finite session gives us the dangerous setting that at some point, the three countries with supply will be Russia, Iran and Venezuela. That is not a setting I want to wake up to, although at present it is highly unlikely that I will be around the morning we get that piece of news. In the meantime there is a larger issue at stake. How will Aramco increase its creation of oil with an additional 159,000,000 litres of that black fluid. You see everyone is looking at the end result and no one is looking at the how. What is required to that level of increase? I feel certain that it will require a lot more than one pump. It is the increase of 10% (near to that) and comes from 300 rigs. The simpleton in me sees this as an additional 30 rigs. It takes 18 months to five years to commission a rig, the construction timeline for an oil rig can vary significantly depending on several factors and that is if the oil comes from rigs. Saudi Arabia has one hundred oil and gas fields, so if it comes from there, other means are needed. The largest oil field is the Ghawar field. So how can you increase the production there? And is that the only place? We are so desperate for oil that the basic security is overlooked and there is at present Iran, Houthi forces and a few others who are very willing to hurt Saudi Arabia. So what more is needed, because when by November that increase is realised, some will take offence to this and that problem will possibly create all kinds of new problems. And we do not see enough information on that side of the equation.

And advice from me? Nope, I know next to nothing on that topic. I can merely see hurdles and optionally a personal belief that I see options, but that is not what the actual expert on the topic has. And the media? Solutions do not make their digital wallet fat, flames do that and in that view it is not a good idea to put flames close to oil, a mere personal view on the matter.

Have a great weekend.

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January 3, 2024 · 21:40

A strange evolving setting

I saw the article last night (really really early this morning) and it gave me something to think about. The article (at https://www.deccanherald.com/business/economy/with-russian-oil-imports-falling-india-turns-to-saudi-arabia-2832708) comes from Deccan Herald. I do not know them, but it is an Indian paper. The west doesn’t seem to have this. So lets look at what is weird. 

It starts with “at least five cargoes of the sweet Sokol variant heading to other locations, data from vessel tracking agencies showed.” Then there is “China appears to be the final solution for some cargoes” so whilst we see that imports of Saudi oil, rose by about 4 per cent, Russian oil declined by 22%, the numbers do not add up. I personally believe that Russia is in more trouble then they are letting on. I personally believe that a chunk of that oil is going to Iran to pay for drones. Iran might have oil, but it is embargoed, Russian oil is not and they can make transfer sales and fill their coffers up that way. Now, all this needs to be taken lightly, because there is only one source and I am speculating of that. Consider the deal Russian suppliers had with India. Also consider that by late July 2023, Iran had sent at least 400 Shahed and Mohajer series drones to Russia. That is close to $20 million, per $60 a barrel that is a whole lot of oil and the fact that India is getting less implies (implies is not a fact) that Russia has more than one issue at present. The Shahed drones are running out, more are needed and Russia (through several sources) are lacking in capabilities to get their own drones to the front. This all adds up that Russia has increasing issues to maintain their battlefronts, to maintain their Russian oil supplies and to maintain their manufacturing facilities. Napoleon lost with a lot less problems.

So whilst Saudi Arabia is seeing more revenue from their oil stocks, the question is how long that happens. It is not on Saudi Arabia, but once it is shown that Russia is lacking in a few ways the larger station comes that Russia will be fighting internal and external wars. 

So how right am I?
That remains the larger question. If any of the presented facts through sources is wrong, the entire domino wall comes tumbling down. None of this could be verified and the fact that only the Deccan Herald had this is also a point for debate. There are differences between the data of Kpler and Vortexa and that is fine. But the stage where Russia is delivering 22% less whilst there are implied reasons and none of this backed up by facts, together with the one mention of China with “China appears to be the final solution for some cargoes” makes me think that there is more going on and somehow someone paid for all those drones, Iran doesn’t give these toys away. 

So there is a stage where merely some of it could be right, but which part? 

In addition to Yesterday
Yesterday I talked about tourism. What I failed to mention is that there was data on the UAE. Reuters gave it 4 days ago (at https://www.reuters.com/world/middle-east/uaes-abu-dhabi-sees-non-oil-gdp-growth-77-q3-2023-statement-2023-12-29/), I missed it.  There we see ‘UAE’s Abu Dhabi sees non-oil GDP growth of 7.7% in Q3 2023 -statement’. This is huge and it is non-oil growth. Now, this is not merely tourism, this is on more sides, but tourism will be taking a chunk of this. Poland with 1.4% growth is the biggest in the EU last year. This implies that the United Arab Emirates outperformed all EU nations by well over 500%. That is massive. Now, comparing GDP’s is unbalanced and incorrect, I get that. However, these settings imply that tourism in the US and EU are taking a serious dive in 2024. We can debate that this is merely a hiccup, or that it is nothing, a mere blip on the radar. But in light of their faltering GDP and places like Greece, Spain, Italy, London, Paris, New York and Florida need tourism these blips could have severe impacts in these places. If continued there is every chance that Saudi Arabia and the United Arab Emirates will get access to $25-$30 billion and other places do not. Do you still think it is a little hiccup? Even when we see “Florida visitors contributed $101.9 billion to Florida’s economy and supported over 1.7 million Florida jobs (2021)” now consider that to be 5% less. How many jobs will go south? The European nations cannot even consider losing that much, it would be like the impact of Greek tourism (2002-2008) but now over three nations. That impact will be seen. 

So how accurate is this?
It is not. The reported numbers from Saudi Arabia and the UAE are, but how it affects others is not directly seen and can only be speculated on. What is clear that money spend there will not be spend anywhere else and that implies well over 25 billion lost to other places. How much each is impacted remains a guess. 

So enjoy the day and consider that special deals this summer will be all over Europe and America, so you might get a decently prized vacation this year.

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December 14, 2023 · 19:52

Our menu: Delusional stew for all.

Yup, a meal that is free of charge, but that is how it feels to me (and I am hungry). This has started some time ago for me and the blablabla is nice, but it distracts me. On the up hand I came up with the pilot of yet another TV series, but I have enough at present. You see, what set me off today (off being a big word), was ‘No ‘phase-out’, but Dubai deal puts oil and gas sector on notice’ (at https://www.climatechangenews.com/2023/12/13/no-phase-out-but-dubai-deal-puts-oil-and-gas-sector-on-notice/), you think it is delusional, think again. We are also given “The “UAE consensus” did not go so far as to call for a “phase-out” as more than a hundred countries wanted. It settled on “transitioning away from fossil fuels in energy systems”.” You want to see how delusional this is? Lets take a look. In the first OPEC removes their delivery by 1,000,000 barrels of oil per day, they keep on producing for China, but the West (USA, Canada, UK, EU) get that less per day, this is not phasing out, but it is moving that way. Now consider that impact

USA 450,000 bpd less, Canada 100,000, United Kingdom 100,000 an the EU loses 350,00 bpd. I give it less than 60 days before all hell breaks lose. Brent will export less than 5% as all goes to America and with that change America collapses broke in 60 days, Canada will lose most of its shit, UK will become too expensive to live and the EU breaks down on its own issues. 60 days is all that is required for chaos to unfold in the west. That is what you are celebrating, aren’t you?

I am not against diminishing oil, but at present it isn’t realistic. Alternative solutions were stopped for the longest of times and the funny part here, when that comes back the crows will shout All hail Musk. That is the reality. You see, the internet without powers is not a nice thing and that makes the Musk solution the only internet on the planet. With that much less oil fuel prices will double and with proper isolation (example London), the people will freeze to death. I am game for all that, are you?

You see, the second part is “One delegation not joining in the ovation was Saudi Arabia. Oil-exporting states fought hard against the phase-out language that appeared in earlier drafts.” This makes sense, but what does not is that EVERYONE steered clear from the noise by Brent crude oil, the one American supplier to hundreds of nations and that stops soon after the limitations are reached. And with that all on the table you see that Crude becomes nationalistic and the rest suffers and drowns (or chokes) on a lack of oil.

All these people, all collectively talking on what needs to be done and nothing is being done. I saw it before COP26 and with the animosity against Elon Musk, the one solution holder this merely goes from bad to worse. I reckon that he has his solutions in place in has house and that people like Bill Gates have similar solutions in place. As such when this goes south really far, we have America and about 2000 houses with power. The rest? I think it was the Roman senate who said in unity ‘fuck the poor’ and that will be a simple repetition. 

As such when we get to “Samoa complained they were not yet in the room when the deal was adopted. Small island states had pleaded for a rapid fossil fuel phase-out to hold global warming to 1.5C, seen as critical for their survival.” Their is your first example of the world screwing over the poor. So why were they not in the room? Anyone? Anyone? 

I already stated that this point would be broken at the end of COP26, and so far my numbers hold up (partial coincidence) and that larger stage is merely fuelled by the joke that we see is presented now. Phasing out oil sounds nice, but the four players mentioned earlier cannot see the reality of that ever happening, on the upside, when America collapses, all the eyes will suddenly look at Brent oil for the first time and wonder what will happen there, because a collapsed America implies that Brent will have to export nearly all its oil making life in the USA a lot harsher. The only thing I found was by Reuters giving us “Brent crude futures edged back down towards $97 a barrel on Tuesday because (whatever reason) after two days of back-to-back speeches by world leaders, the COP28 climate” You don’t think Brent has its extensions and override policies in place? That is the reality of things and board of directors tend to be greed driven, so that was easily seen. 

A stage that has a restaurant, it serves a delusional menu. It is free and you can have as much as you like.

That is what is happening and when the world settles bak in 2-3 weeks the issues start arriving on how impossible these goals really are. I reckon the ‘depending’ media already have speakers in place for that event.

Enjoy your day. 

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September 12, 2023 · 03:00

The future is today

That is a small reference to Beaker, the assistant of Muppets lab where the future is being made today. The thought came to me after seeing an article which took me back to one of my articles. The article in question is ‘On the way to……’ (at https://lawlordtobe.com/2023/07/28/on-the-way-to/). In that article I give the readers “Yet the larger part is how the prices (allegedly) dip a little in early 2024, as I see it as these settings continue, the world (EU and USA) will face oil prices of $90+ from December 2023 onwards. I have no idea how high they will get, but the larger setting no matter how managed it is, the shortage will continue and press pressures up to weird levels all over Europe.” So that was my prediction at the end of July, two months ago. I was called all kinds of things, including Arab buddy and wog friend (whatever that is). So now we get ‘Oil prices ease after Saudi, Russian output cuts but hold above $90’ (at https://ara.tv/24w46), so basically we are already at the $90+ point and it was (as I personally see it) clearly visible. And when we add “The supply cuts overshadowed continuing concern over Chinese economic activity last week, but investors looked to be focusing on demand drivers on Monday, with the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) due to release monthly reports this week.” It is more than the simple demand drivers. Yes, these drivers are a first, but the environment, the effects are now becoming a second. The larger setting is that the hot summers are likely going to be the fuel for a drastic and much colder winter. If that is true (and it is pure speculation) the west and especially the northern hemisphere could require a lot more oil for heating and that will drive up the oil price ever further. I have no idea how high it will get but it is already above $90, as such $100 per barrel is not out of the question, but this is not my ballgame. I saw the increase, but how high is less my issue, or my interest as I do not own any oil wells. 

So what will happen next? Well, there is some confusion on that. The EU and US have alienated Saudi Arabia as well as some of the other OPEC nations and with Russia in the state it is in a lot of oil is no longer available to the EU, yet the US is the largest producer at present and where it all goes is up to all of you, but it comes at a price. What that price will be is anyones guess but the demand of oil keeps on pressing and the needs during coming winter could reach new heights. But that is pure speculation from my side. I have no information that could be ruled as acceptable evidence. What does matter is that whilst I saw this moment two months ago, too many were in doubt or flat out denying this and we are now entering a stage where denial is the start of disastrous folly. For me the fun part was that I was right all along (yet again) and I am perhaps Beakers twin or assistant and I predicted the present two months ago. OK, I expected this to happen in a few months, but we are already there, all whilst others were playing possum with the reality of events.

Enjoy the day.

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August 25, 2023 · 19:06

And then there were 6 more

I have been expecting this, I have been awaiting it. OK, I have a few different reasons, but the added BRICS members (from January 1st 2024) are Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. I don’t think that the people get how much of a issues this is going to be. BRICS members, just like any other membership (like EU, NATO) will give preference to its own members first. On ‘the seventh guest’ (at https://lawlordtobe.com/2019/06/21/the-seventh-guest/) I wrote “I am certain that Russia and China will use this opportunity that opened up, I just do not know how at present.” That was June 2019. There was no war looming in the Ukraine (and BRICS was not on anyones radar). This setting would be coming naturally from China and now we are about to see that play. Now consider that Saudi Arabia imports from United States was a simple US$16.22 Billion during 2021, now also consider that U.S. Exports to Saudi Arabia constitute 14.2% of total U.S. exports of those commodities worldwide. Now consider that these two numbers will diminish by at least 50% and those trades all go to China (optionally Russia too). I reckon that January 2024 will be the start where the debt levels the US currently has can no longer be allowed. Doing so will end its existence sooner and sooner. Should the US default, they will drag the EU and Japan down with them. A sentiment that China will not shed a tear about. Egypt is interesting as it propels the Saudi plans for their global G5 plans a lot further and a lot faster and it puts the EU and US out of the game pretty much overnight. As such there are signs that the latter two are racing to get agreements in play now. Something Saudi STC and Chinese Huawei are eager to block. Now consider a second part. The quoted setting was “the relationship is that the United States of America (USA) provides military protection of the Kingdom in exchange for a reliable oil supply from the Saudis, pricing of oil in USA dollars, and Saudi support for American foreign policy operations across the world” under those steps China is the most likely party to enlarge their options and they stand to get a lot more oil, oil that is likely not to go to the US and EU from January 1st 2024 (or at least a decent part of it). The latter one is a speculation, but it fits the long term play China is employing and in this I could be wrong. The KSA has long term agreements with the USA. The larger concern isn’t merely the KSA. In this new agreement Iran and the UAE join and now there is a new balancing point in the Middle East and the Emirates are part of that. So how much import does the UAE get from the USA and EU? So when they too go from “United Arab Emirates Imports from United States was US$16.88 Billion during 2021”as well as “European Union Exports to United Arab Emirates was US$37.38 Billion during 2022” and now consider that these two will go down by at least 50%, if not a whole lot more. That gives us $99,000,000,000 in lost commerce from these two places alone and that is merely the start. So how will their government credit cards go when they do not have these revenue streams continue? After that consider the damage that lost revenue from Egypt could get up to as well as increased revenue to China and this is not new, that danger existed from 2019, but certain American politicians were to ego driven and now it all comes to a speculated halt in 16 weeks. For China it will turn out to be a very merry Christmas this year. For the EU and USA a lot less so. But they were warned (not by me), these so called wannabe’s making the calls had more than information I had and they played the ostrich game. So how is that playing out for them? If you were hoping for some miracle cure from me you would be wrong. As I see it, it is too late for that. The US and UK should have adjusted their courses at least 3 years ago (7 would have been better). In the end for several players their upcoming BRICS membership is merely  business decision and that is what China and India are hoping for, because it opens their options by a fair bit starting in 2024. 

As I personally see it, the endgame will play itself, I see no moves left for the Commonwealth, the EU or the USA. Setting that should and could have been avoided for close to 5 years were never done and now with an enlarged new player on the global stage we can watch and see Wall Street implode on itself. To see the desperate go nuts on greed missed all because of some ego driven politicians will be stellar on a few levels. You see a secular population is a weird thing, the moment things go really south, they will rely on the faith of others to let them continue. Does that make the profoundly lost sentiment a drive of sarcasm or a natural wave of irony? I am not sure what applies more but as an antithesis they might be feeding each other for some time to come (especially when the media wants to get as much digital dollars as it can). 

I honestly wonder which systems will still be in play by April 1st 2024, what a joke that will be. Enjoy the weekend.

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July 28, 2023 · 12:51

On the way to……

I was on route to some IP pondering when the Al Jazeera story ‘White House adviser Jake Sullivan meets Saudi crown prince for Jeddah talks’ crossed my path. Immediately the thought   “There are just so many ways you can beg for cheap oil” passed my mind. OK, that might have been out of line, but the premise still sets. The White House have send nearly every large caliber in the direction of Saudi Arabia without making it an overly clear ‘White House’ event. The story also gives us (yet again) ““We were going to, in fact, make them pay the price and make them, in fact, the pariah that they are,” Biden said during a 2019 Democratic debate.” These were hollow words given at the wrong time. And now almost 4 years later the setting is as dire as the US has ever had them, but OK. Try to make us all believe that this is about ““bilateral and regional matters”, the White House said, including initiatives “for a more peaceful, secure, prosperous and stable Middle East”” Sure, make it about the one thing that the Middle East does not need the US to initiate. It has initiated enough imbalance to last it an eternity. Even as Reuters gives us ‘Oil settles above April peak on tighter supply’ (at https://www.reuters.com/business/energy/oil-up-supply-tightness-view-offsets-concerns-rate-hikes-2023-07-27/). We need to consider the impact of “Still, oil dropped on Wednesday after data showed U.S. crude inventories fell less than expected and the U.S. Federal Reserve raised interest rates by a quarter of a percentage point, leaving the way open for another increase.” You see, this scorcher of a summer on the northern hemisphere is also impacting energy costs, AC and cooling units are working overtime, as such winter could be a killer. I am using could be, because there is no clear evidence that this summer will leave us with a mild winter, implying that the US and EU are facing 5%-15% more energy needs and with the price of oil that could be a massive impact. One source is giving us today “Standard Chartered analysts conclude that crude prices are finally starting to catch up with the reality of a tightly supplied oil market.” Really? I got there months ago, so how are these clowns actually making their money? A tightly supplied market is the premise of shortages close to everywhere, and if you think that the EU is a nice place now, consider 28 members fighting each other for the same oil allotment, should be fun. I will invest in popcorn, we would all want some so we can watch the nagging tea bitches fight this one. I saw some forecast charts, but I had issues with them (optionally) for the most I might not get all the elements in that forecast. That is simple as I am not in that business. Yet the larger part is how the prices (allegedly) dip a little in early 2024, as I see it as these settings continue, the world (EU and USA) will face oil prices of $90+ from December 2023 onwards. I have no idea how high they will get, but the larger setting no matter how managed it is, the shortage will continue and press pressures up to weird levels all over Europe. All that is before China achieves a larger stake in the oil supplies. The US is silently hoping that they get it all from Russia, but without the cap in place China sees a larger benefit vying for the same stack that the US and EU are vying for. Call me nuts, but I reckon that is one scenario that could go south for the EU sooner rather than later. We all see what is given to us as to the events happening, but there is something off in sending National Security Adviser Jake Sullivan a month after Anthony Blinken went there. Something does not add up and it might just be me, but there is more to this visit than the press tells us (which is what the US likely told the press), they need something and cheap oil is the first thing that comes to my mind.

And in the heat the US and EU faces? Well I reckon one barrel of oil per household to keep it cool should do it. Oh no, there are only 2 million barrels to go round (times 90 days = 180) , so what about the other 600 million people. How will they get cooling? And what about winter, which 600 million need to face it without heating? Yes, the equation is not correct, but the sentiment is. For the first time since 1973 will we face an oil shortage. I tried to warn you all but too many called me stupid and insane (the latter might be true). So I will see you buried, frozen to death soon enough. I wonder if anyone realises how dire it is about to become and don’t blame me. All these analysts should have been there long before I arrived at that station, so why weren’t they? They can ignore it for now, but in February when the death count starts, their BS reasoning will be met with the anger of people who lost someone in the big freeze of 2023/2024. What will they do then?

Enjoy the day and enjoy the AC at current prices, the weekend is about to start.

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July 13, 2023 · 00:40

Enemy of the stated

That is sometimes the case and I got that alert yesterday. It took me a while to get on board with some of the items, yet on the other side there is more and there is something else at that. So lets start with that part as it matters. Last year, almost 1 year ago I wrote an article (at https://lawlordtobe.com/2022/07/18/for-those-not-seeing-the-oil-field/) with the title ‘For those not seeing the oil field’. In that Article I wrote “China could sell the Chengdu J-20 at a nice price to Saudi Arabia (I admit I was trying to get my foot in the door and make a play for a simple 3.75% commission), and when you consider that this bill might go up to 15 billion, my 3.75% makes for a nice half a billion (we all have overly big dreams), and merely to play the courier? You have got to be kidding, I am so ready for that part!” And that stage as already underway at that time (alas, not for me). In an age where in Australia we see nearly the entire nation ripe with age discrimination, I was aiming for a nice job getting 3.75% (an internal joke from 1996) of whatever comes up and recently I learned that this might be as high as $23.8 billion over 2 years. This would have gotten me a $892,500,000 pay-check (over 2 years). Would I accept that? Hell yes! For being a simple courier for the Kingdom of Saudi Arabia? I would have been so there. Australia has no enemy relationships with either country. Is it my best case scenario? Not exactly, I am a commonwealthian after all, as such I preferred to be courier to documents for the British Typhoon. Yet British Parliament gave it up for British tea grannies and their CAAT. The Americans made a mess of everything pushing their own solutions away from a decent revenue taxable future. So I was looking out for me and I would have taken that job, no hesitation about it. 

So now you have the background, lets dig into the article that sets this off. It was the BBC (at https://www.bbc.com/news/world-us-canada-66160979) who gives us ‘US think tank founder charged with acting as Chinese agent’. In that article we are given a few parts. First there is “Gal Luft “agreed to covertly recruit and pay” an unnamed ex-US official to publicly support certain Chinese policies, federal prosecutors say. The 57-year-old allegedly attempted to broker arms sales involving customers in China, Libya, the UAE and Kenya.” Here we have two issues. Was he a broker? Did he connect to people, who via him conducted business? Broker is a bit of a lose term. And we aren’t talking two parties, we are looking at at least 3 channels, optionally more, but what is relevant and what matters? For Americans it is a setting for courts and good luck with that evidence. The second allegation is “In 2016, officials say he failed to register as a foreign agent while acting to advance Chinese interests in the US. He is alleged to have lobbied an ex-US official who was an adviser to then President-elect Donald Trump to convince him to “publicly support certain policies with respect to China”.” Here, in the first, was he a foreign agent, or was he a (technical) consultant? They are very different and evidence is bringing that up (I never saw any for that matter). And as the ‘activity’ happened in 2016, why did it take 7 years for anyone to take actions? Which policies was he catering to? Is that not the job of any stake holder in the political field? Was the policy a legal one or a illegal one? Three questions that blow away the setting if the court doesn’t have a proper deck of Trump cards (pun intended). Then we get a very specific one “Prosecutors also accuse him of attempting to broker arms sales without a US permit. He allegedly worked to help Chinese companies sell anti-tank launchers, grenade launchers and mortar rounds to Libya.” The short and sweet is, can it be proven that he was a broker, or was he an un-sided courier? Person A and Person B do not know each other (good enough), but they both know Person C and that person couriers the papers between the two. Isn’t that what DHL does? Is DHL a courier of an arms broker? Then we get “Federal officials say he attempted to bypass US sanctions on Iranian oil by directing an associate to say that the oil was Brazilian. According to prosecutors, Mr Luft was arrested in Cyprus on US charges on 17 February this year and fled after being released on bail pending extradition.” This is a specific allegation and a big ‘no no’ Iran is on the naughty list of many nations and there they might have a case. I reckon it is stupid to do what he did as the sulphur content of Brazilian and Iran are very different, did he not think this through? Well that is a case that might stick on him and the fact that he allegedly fled to Cyprus does not help him much. So what is the difference between George Luft and me? I am not American and I will not do business with Iran. But as we are both optional couriers I am still in a much better place that he is (alas a very poor one for now). As such in the end we get “He is charged with eight counts, including failing to register as a foreign agent, evading oil sanctions, two counts of making false statements to investigators and three counts of illicit arms trafficking.” What is true? What is legal? What is unacceptable? That is for the courts to decide, but I reckon that George Luft as the head of a think tank was already making a fair amount of coins, so why endanger it all? I never get invited to US Energy Security Council conferences, so I am a little clueless at present. But it seems that America is seemingly still out to declaw whatever China does and at present I cannot say that they did anything do wrong, the courts will decide on George Luft. I look forward to seeing that evidence. In the meantime, my delusional side will dream of getting his 3.75%, as all delusional people do.

Enjoy the middle of the week. 

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July 12, 2023 · 02:13

One voice is still a voice

I made mention of this all over June. The production cuts that Saudi Arabia set out to do would have impact. Some called me stupid, most ignored the issue. Yet Bloomberg gives us ‘Saudi Arabia’s Oil Production Cuts Are Quietly Starting to Bite’ (at https://finance.yahoo.com/news/saudi-arabia-oil-production-cuts-105634851.html), as such you need to consider. Not merely that I was right. The larger setting is that this is only one week into the new amounts and it is starting to bite. So how will the setting of less oil be in a month time? And before you know it North America and Europe enter autumn with all the heat they require at that point. We are then given “Brent oil traded in London had been stuck around the $75-a-barrel mark for weeks. That shifted a little Friday, when the contracts rose to about $78, a level they have largely held at since.” A setting we get and understand, but as the supply landscape is redefined, that price cannot be held and I reckon that in a month time it will hit the $90 mark and after that it gets nasty in a hurry. And there is an additional quote that matters. We are given “In the latest move, at least two processors in Asia sought less from the Saudis for cargoes shipped next month, and another said it won’t take any cargoes after an unexpected price increase.” This sounds nice on paper, but when we have 15 processors al vying for the 1 million barrels out there, at least 5 will have no oil to process. It is simple math and at that point the item of sulphur content will not hold much water. And whilst people are shouting where is our oil, I see a group of people that forgot that Saudi Arabia is building a new refinery in China which will gobble up almost a million barrels a day and China who got the deal with a clause accepting that payments are in Yuan is slightly too happy and when Europe (America and Canada too) realise that the reduction in oil is permanent and that China is now in a stage with loads of oil to fuel their economy. That is the point when people realise that they are losing a lot more than they bargained for. If only the US hadn’t pissed of Elon Musk to the degree they had. Yet this is about oil and not about batteries. The simplest setting is that this ‘biting’ is happening after less than 2 weeks into the reductions. So what will be the case in 4 weeks? Is someone considering that Janet Yellen had a portfolio of begging prescriptions towards China? I have no idea where this will end, yet I remember the ‘carless Sundays’ in the Netherlands in 1973. We might have that soon enough and now all over Europe and optionally America too. In 1973 it was fun. I got to test my roller skates on the A27 (a Dutch highway) which extension past Hilversum was brand new and I got to test that tarmac and not a car in sight, good times. Yet now it will be different and I reckon that the economic image will change for a lot of nations. It will not be a simple ‘lets add some money we do not have’. Now several members of the EU will be waging some kind of personal war to get the oil they all need. And I gave fair warning around two years ago. And it was not rocket science, it was simply based on the old premise ‘do not bite the hand that feeds you’ and that is how the escalation wth the UK (and their CAAT) and the US with whatever premise they thought they had and now they all want oil that they are denied. It sucks to be them soon enough.

It might be quietly biting now, but in 4-8 weeks it will not be quiet and when Europe (as well as the US) enters winter that setting will not be a nice one.

Enjoy the almost middle of the week.

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April 21, 2023 · 23:29

What at first we don’t grasp

Yes, that is the setting we all face, even me. We don’t get everything, we don’t see everything and we don’t put it all together at a first notion. We think at times that the stage is clear, but it I not. It is made harder by a media that cannot be trusted, that relies on emotions and flames to get digital dollars and at times some of them merely keep silent for whatever reason. In this case (I checked today) according to Google Search, only Reuters and Arab News reported on this. You see, Pakistan has placed its first Russian oil order of 100,000 barrels a day. They did so because it is discounted oil and Pakistan does not have great oil reserves and it has 231 million people, as such for them discounted oil is essential, but that also means that Russia is now getting another flow of cash to prolong the war, more important, it might now have a long standing oil customer. You see, no matter how we feel, Pakistan does not care too much about Europe and more important, the war does not touch them. It feels indifferent, but business is indifferent. Business is what Pakistan needs for its people and its commerce and in this discounted oil matters a whole lot. So what do you think other nations will do? 

As such Arab News gives us “Pakistan has placed its first order for discounted Russian crude oil under a new deal struck between Islamabad and Moscow, the country’s petroleum minister said, with one cargo to dock at Karachi port in May. The deal will see Pakistan buy crude oil only, not refined oil, and imports are expected to reach 100,000 barrels per day if the first transaction goes through smoothly, Minister Musadik Malik told Reuters on Wednesday night. “Our orders are in; we have placed that already,” he said.” We might be upset, be might get angry but we need to realise that Musadik Malik can make a case. He must look out for the needs of its country and in a commodity like oil, the discounted version matter a whole lot. People want to get angry, but why? When you get groceries, do you get the brand at $1.99 or the supermarket version at $1.29? Especially when you know that they come from the SAME factory? You feel happy that you saved $0.70 and took that from the factory mouth. I know it is not that simple, because the supermarket orders 10,000 packages to get that discount, but for the consumer it is a saving. So what happens when a nation can get a barrel at $10-$30 less? That is one to three million less and the Pakistani government pockets that savings and they are not the only one with a budget issue. 

Reuters had a photo telling us “People on motorcycles wait for their turn to get petrol at a petrol station in Karachi, Pakistan, November 25, 2021” and that is one queue, Pakistan has them at nearly every gas station, some of these people live from gas tank to gas tank and now the Pakistani government could offer it slightly cheaper. Reuters also give us “As a long-standing Western ally and the arch-rival of neighbouring India, which historically is closer to Moscow, analysts say the crude deal would have been difficult for Pakistan to accept, but its financing needs are great.” And they would be right. The larger issue is not merely how the Pakistani situation is, it is what other nations are in a similar stage, because that matters. When nations can save up to 20% they will take the deal, there I little doubt in my mind and when you explode in anger, just realise that plenty of AMERICAN corporations are still doing business with Russia, I see the list all over LinkedIn with some repetition. There is a website (at https://dontfundwar.com/directory/) were we see hundreds still doing business in Russia. Companies with EU or American origins, as such we need to act locally before we can demand anything international and lets be clear. This is not on Saudi Arabia, no on Venezuela or any other oil producing nation. This is the consequence of a global economy and we better realise that the larger picture is not set in emotion, it is set on cold hard cash and cold needs of board directors and shareholders. The funniest was Credit Suisse (well it was until UBS took over) “Stop new business in Russia while meaningfully cutting exposure by 56%” so in a bank, what is ‘new business’? And in all this what is ‘exposure’? Doing it without a marketing spin, or is there more? 

We might not grasp all elements, we might not see all the elements in play. The list for example does not expose the transitional partners that work via Asia, or Africa as such the question becomes how much scaling back was in place? For one company to stop dealing with Russia and some old granny does it via Sun City for that player is that scaling back? 

The media is all quiet about a lot of it and you get to wonder why. I reckon until someone exposes certain links then they will casually mention it on page 23 of the newspaper to cover their own asses and sone distant link on their website will mention it, well after you repair the accidental broken link. There are many reasons why some act how they do, but the simple reason is money and the revenue they are measured against. A war that impacts global economy is a dirty one. They all ignored the larger impact of Yemen because there was no linked global economy, the same was the case for Syria. Now in the Ukraine it is different and we see all kinds of issues pop up.

Enjoy your discounted meal (and day).

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March 16, 2023 · 18:07

Oh boy, there was more

It all started 4 days ago when I wrote ‘I honestly don’t get it’. I comprehended the stage just fine, it is the lack of comprehension of greed, what people will do to fill their own pockets at the expense of everything and everyone. You see Basel III was published in 2010 after the first meltdown, it was extended to 2015 with extensions going as far as January 2023. So 13 years and the whining bitches (aka banks) still will not learn. SVB is merely one example and the actions by congress made perfect sense. Now we have Credit Suisse and the setting changes.

It now needs (and apparently just received) 45 billion to be ‘secured’. This is a little more than the national budget of Qatar which is 53rd on a list of national budgets with 228 nations with on last place Wallis and Futuna. To give you a better picture, it is twice the amount Oman has for its citizens, they are in 68th position. They need THAT MUCH money. The issue is that big and do not talk to me about journalists or those clowns at the ICIJ. They are all about their Pandora papers and what a joke they are. 

You see, I stated in the first article the Common Equity Tier 1 (CET1) and now we see the BBC give us (at https://www.bbc.co.uk/news/business-64964881) giving us “After Credit Suisse shares plunged on Wednesday, a major investor – the Saudi National Bank – said it would not inject further funds into the Swiss lender”, it matters and I will get back to this. In the mean time The Guardian gives us “The bank had been forced to delay the publication of its annual report last week after a last-minute call from the US Securities and Exchange Commission relating to what Credit Suisse described as the “technical assessment” of revisions to cashflow statements going back to 2019. The bank said those discussions had now been concluded” I believe it is more, I personally believe that was why Yellen got involved in day one. I think the SVB and others have too many bonds and they are not ready to mature yet and with interest up these things are making banks bleed money and they are bleeding a lot. You see, there is an estimated total of TWENTY THREE THOUSAND BILLION DOLLARS in US government bonds floating around and I reckon the SVB and Credit Suisse are now in levels of pain, they had too many of those. As such the outstanding part, not merely these two represent $23,000,000,000,000 and no one can cover it they are all stretched beyond thin. This is what I expect is happening and I warned for this as early as 2016, there is a point of no return and the banks are way past that. Putting your IP in the USA is about to become one of the most expensive jokes tech firms have faced in well over half a century.

Could I be wrong?
Yes, that is the case, but that can be tested quite easily. You see, if you make a tally of where all these US government bonds were and you set that tally in a mineable solution especially with pre 2016 and past 2016 when Dodd-Frank got cancelled you will learn a few things and this is what I saw on day one, but weirdly enough the media is not going there (neither is the ICIJ), so you get to wonder why.

Oil in the family
now we get back to the Saudi National Bank. In this I agree with Saudi Energy Minister Prince Abdulaziz bin Salman. Oil is a commodity, there is no cap, if you need oil more and more, you are working from the wrong business plan and if that relies on exceeding your budget by over 30 trillion dollars you get what’s coming to you. In addition I would add the Republican Party making small talk stating that they need to pull away from Ukraine, I lose the little sympathy I had left for them. The US has slammed Saudi Arabia again and again, in some cases with the assistance of a United Nations essay writer. There is only so much people will take. They had the option to help Saudi Arabia create a nations defence strategy, they bailed out and now China is there. They made fake promises and most were not kept and now we see banks asking Saudi Arabia (in Oliver Twist style) can we have some more please? 

As such we see event after event and now that things are on the rails, the train has speed and they just ran out of rails. This is early and before I expected it, but I never considered the impact of Russia being stupid and attacking the Ukraine, it merely escalated things. 

America has two options, does it become part of China or part of Russia. It seems that the Republicans want to be part of Russia, the rest I do not know, but we are now in the process of the final financial act. And my evidence? Investigate the CET1 setting of EVERY bank (especially the two in trouble) and then look at where the bonds are and how many of these bonds are/were with the SVB and Credit Suisse. I have no doubt they both have too many. Then consider Basel III and see how many banks hold up at that point. They were warned for 13 years, so let them rot, let them collapse and let the investors and share holders take the fall and live life in minimum wage. 

And in all this, too many of the media are all about flaming and not doing too much about it, merely pushing towards bailouts. That time has gone as I personally see it. 

All whilst the Australian Financial Review gives us a mere 45 minutes ago “The failure of Silicon Valley Bank has exposed fresh divisions on Capitol Hill over banking reform, as US lawmakers from both parties trade blame for the lenders’ collapse and squabble over future legislation to shore up the financial system” squabble on something that was shown 13 years ago. Still think I am wrong? 

Enjoy the money you have, there might be a lot less soon enough.

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