People here keep saying that heavy, sour, crude needs to be imported to blend with USian light, sweet, crude.
TIG has previously announced the 10% (for openers) tariff on Canadian crude.
Today, TIG yank’s Chevron’s license to produce crude in Venezuela.
The bottom line is TIG is making heavy, sour, crude harder/more expensive to buy for US refiners.
Perhaps the intent is to “incentivize” US refiners to reconfigure their refineries to run light sweet, to increase sales for US oil producers? Seems everything the administration is doing is intended to increase demand for US produced crude.
Opened a position in Flowserve today, as it seems to have settled in to a range around $55, give or take a buck. Incredible how almost all of the pump companies I dealt with daily, 45 years ago, have been rolled into Flowserve, or gone belly up.
While looking for the card that has my brokerage password on it, I found a card where I had jotted down one oil and gas industry GC that seems to still be around, and publicly held: Fluor. They took a whuppn’ on an earnings miss recently. KBR has been on a downtrend for some time. Someone needs to design the places to put all those pumps.
The management atop one of my oldest, most consistent heavy sour oil well fields just sent me a ballot (with my tiny powerless fraction of a % it acts as more of a notification than a request for my opinion) that they are going to renovate and increase the pumping volume of the wells. They smell lots of $$$, and want to act before the situation evolves too far from where TIG has put us.
The estimates of US crude reserves seems to have soared in recent years, something north of half a Trillion barrels, about 8 Billion more than Russia and, iirc 63B more than Saudi. If one cared about the future, seems the move would be to conserve this gift, so, some is still available in 50-100 years, if our later generations want it. But no. Policy seems to be to burn or sell as much as possible, as fast as possible, to make a lot of money NOW.
The world is not likely to run out of carbon. If oil and gas run low, coal can be converted to liquids (CTL). IIRC, coal can also be used as feedstock for the many petrochemicals in our lives.
Ayup. The pump seal company I worked for was involved in some of the liquefaction projects in the late 70s. The issue was always the cost. Yes, coal tar was used to produce chemicals before oil was readily available.
It would be better to conserve the oil we have, rather than pay for liquefying coal, or being dependent on the good will of others to provide an uninterrupted supply, if the US ran out, again. But no. The “JCs” want to maximize the amount of money going into their pocket NOW. What happens later will be someone else’s problem, so they don’t care.
This would result in higher cost gasoline to consumers in so many ways. However, there are more areas from which to buy sour crude, so I don’t see refiners investing too heavily to change their set up. The amount of crude coming into the US from Venezuela is still minimal, only having restarted in 2023, IIRC.
I suspect it’s just more Trump positioning to extort a country that’s in a tough spot. US crude producers should not get too excited over this.
And as with previous administrations blaming the refiners for price gouging, when its the market, not the refiners that set gasoline price, it is indeed tough guy rhetoric. Not that Trump actually cares about the cost at the pump, but he does care about citizen revolution. First the price of eggs, now the cost of gasoline, all very transparently showing a lack of desire to follow through on his COL reduction goals that people voted him in for. It will be a very interesting 2026, assuming voting will still be allowed.