Daily Standup Top Stories
Greek Tanker Owners Dominate Russian Oil Trade
Greek shipping companies are making a lot of money by moving large volumes of Russian oil that other tanker companies are unwilling to touch. Ukraine has added the tanker firms of several Greek tycoons to […]
These Five Countries Are Laundering Russian Oil And Selling It To The West
Correction: This story has been modified to emphasize that CREA has not verified the precise amount of oil products from Russian crude oil that passes through laundering countries to price cap-coalition countries. Five countries have […]
Highlights of the Podcast
00:00 – Intro
02:59 – These five countries are laundering a Russian oil and selling it to the West
06:28 – Greek Tankers Owner Dominate Russian Oil Trade
10:24 – Market Updates
12:23 – Devon Energy Report, will tomorrow report its first-quarter earnings
13:32 – Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:14] What is going on. Everybody, Welcome into another edition of the Daily Energy News Beat Stand Up here on this gorgeous Tuesday, May 9th, 2023. As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas. Stu is out on assignment today so I am going to rock a solo show, but the show must go on, folks. [00:00:35][21.2]
Michael Tanner: [00:00:36] I mean, there’s too many stories for me personally, all to cover so I’ve nailed it down to what I think really lays out a good overview of what happened today Guys, appreciate you sticking with us. First up on the menu, Greek tanker owners dominate Russian oil trade. Fascinating article, really overlaying how all of this Russian oil is getting moved around. [00:00:55][18.6]
Michael Tanner: [00:00:56] And then next up, a very interesting article talking about how there are now five countries who have been labeled launderers of money for Russia by the Center of Research on the Energy Clean Air Act, specifically because of their imports of Russia. The title of this article is These Five countries are laundering Russian oil and selling it to the West a great deep dive into what’s going on. Who’s buying all of this crude oil? This Russian crude oil, and where is it all going? [00:01:23][27.1]
Michael Tanner: [00:01:23] And then last up, a Quick view at the U.S. energy workforce. We had some interesting data dropped today from the Bureau of Labor Statistics that I think did help oil prices is is if you’ve noticed. But specifically, we saw U.S. oilfield service jobs increased to its highest level since March 2020. [00:01:38][14.9]
Michael Tanner: [00:01:39] We’ll kick it over and do a little bit more of a finance roundup cover, specifically what happened in the overall markets today. We did see some some new labor statistics data drop, which showed that strong job numbers seem to push off an imminent economic recession. So that’s what the headlines will tell you. We did see oil and gas or oil prices jump 7296. Natural gas still train about $2.22. [00:02:00][20.7]
Michael Tanner: [00:02:01] And then quickly, you know, we have an IR guy of the week over at Devin they’re going to announce their earnings today as you’re listening to this. But they have an interesting headline that I think qualifies for an IR Guard of the week. And then we will actually get out of here and start your day. [00:02:16][15.2]
Michael Tanner: [00:02:17] Before I dive in, guys, remember, all these articles I’m about to cover are courtesy the world’s greatest website. www.EnergyNewsBeat.com The best place for all of your oil and gas news hit the description below. The team does a great job of making sure the all the articles that we cover are located down there. You can contact the show Questions@EnergyNewsBeat.com Dashboard.EnergyNewsBeat.com The best place for all your data and energy news combo. [00:02:37][20.8]
Michael Tanner: [00:02:38] Get it while you still can you never know where that might go away or go behind a paywall or whatever so I appreciate go to Dashboard.EnergyNewsBeat.com, tell us what you think and we’ll continue to push that but enough of the pleasantries. Let’s go ahead and dive into kind of this first set of two articles, which is really surrounding the Russian oil trade. [00:02:55][17.3]
Michael Tanner: [00:02:55] And first, you know, I think it’s helpful to start with, you know, the first article, These Five Countries are laundering a Russian oil and selling it to the West. And what this article does is identify China, India, the UAE, otherwise known is the United Arab Emirates, Turkey and Singapore as, quote, laundry mat countries who are buying all of the net exports from Russia and then reselling them on the open market specifically to the United States, United Kingdom, Japan, EU, Canada and Australia. Both in the realm of refined product, which is after it’s gone through and now we’re talking about gasoline, diesel, those type of things, but also just the raw product itself in terms of crude oil. [00:03:35][39.8]
Michael Tanner: [00:03:35] And this as I mentioned, the Open, the Center for Research on Energy and Clean Air, Sarah is basically is trying to identify them as laundry as laundering and or as really and their quote is they’re attempting to undermine the Russian price cap and fueling the invasion. Quote analysts say the quote here is this is currently a legal way of exporting oil products to countries that are imposing sanctions on Russia as the product origin has been changed, according to the report, this process provides funds to Putin’s war chest. [00:04:05][29.8]
Michael Tanner: [00:04:06] Now, do we believe that’s happening? I mean, it doesn’t take a rocket scientist to figure out that there’s going to be some reselling on the markets here. I mean, if it took a huge report and me to read this Sarah report to know that like I’ve been living under a rock, conveniently I’ve have it still has been keeping me up the day like we knew this was happening. So the real question is how do we fix this? [00:04:27][21.2]
Michael Tanner: [00:04:27] I don’t know what the actual the easy solution is you just ban all Russian oil. Well, that’s then that involves you’ve got to somehow ban it somehow. I mean, you have to put your role in the troops to cut off oil flows. I mean, at some point you have to let the markets decide what’s at play here and how you from the administration that’s in power right now. From their perspective, I don’t know what you do about this. [00:04:48][20.7]
Michael Tanner: [00:04:48] From my perspective, I would say this is probably why price caps or controlling Russian oil is a bad thing to begin with, because we could probably see lower prices abroad if we did necessarily just allow this Russian crude to flow. [00:05:01][13.4]
Michael Tanner: [00:05:02] Now, do we necessarily need to be funding Putin’s war operation? I mean, no, we can have a conversation about that. But we buy oil from a lot of other people that are doing a lot of other bad things around the world we just are now talking about Russia. [00:05:13][11.3]
Michael Tanner: [00:05:14] So I think the moral equivalency that you that is trying to get subscribe here can be a little bit overblown. You got to remember that the U.S. was the one that really stepped up and wanted to push this price cap. Exports of oil products have increased by 26% to price cap coalition countries, which is pretty crazy to think about. That’s an interesting stat considering where we were at. To give you an idea, the EU spent 19.3 billion on products from countries sourcing most Russian crude in the past 12 months after the invasion of Ukraine. According to this report, followed by Australia, the U.S., the United Kingdom and Japan. [00:05:47][33.6]
Michael Tanner: [00:05:48] So, I mean, everyone’s got blood on their hands, but we could play this game all the time. I think again, this is where the free market, if we were to maybe talk about lifting this price cap and allowing the open market to maybe decide what happens could be in our best interest. But I will leave it up to you, the wise listener. [00:06:04][16.4]
Michael Tanner: [00:06:05] What’s funny is how is this oil physically moving around? And there’s this new report out from a company knowing is known as Lloyd’s List. I mean, this is a real company. They do great work, but it’s called Lloyd’s List. Okay. So bear with me here. I know it’s Lloyd’s List, but bear with me. Reef shipping companies are making a huge sum of money by moving large volumes of Russian oil that other tankers are unwilling to touch title of the article Greek Tankers Owner Dominate Russian Oil Trade. [00:06:30][25.6]
Michael Tanner: [00:06:31] Many of these tankers are still covered by Western Insurance, and this is the most interesting part, suggesting that they have been complying with the price cap. So this price cap is working. Now, Does that mean the price cap is actually working or is there that big of a discount for a euro oil? [00:06:46][14.6]
Michael Tanner: [00:06:46] That’s the other thing that I don’t think people are taking into account is there was already a huge discount for the Russian crude grade, which is known as Urals. If you played risk euro, it’s kind of funny. It’s that little I don’t know if it was ever a country at some point I could be looking like a big idiot right now for not knowing where the term euro came from. Let me know if it’s something that I should know. But whatever I just remember from risk is this country that was always hard to invade. You’re always like, I got girl, shoot. Okay, whatever. [00:07:14][27.5]
Michael Tanner: [00:07:14] But my point being here is that these Greek tankers are complying with the oil with the oil price cap. What does that mean? Does that mean does that mean that they’re abiding by the price cap? No, it’s just that Russian oil on the open market is trading below. So a lot of this Russian price cap, what we’ve talked about in that first article is just posturing. [00:07:33][19.3]
Michael Tanner: [00:07:34] And so it comes back to people just don’t want Russia to be able to export oil and it comes back to a much more geopolitical conversation of we should be who controls what other people should do. And I don’t know if there’s a clean answer to that, but Greek shipping companies are have their hands full in all of this. [00:07:49][14.8]
Michael Tanner: [00:07:49] TSM tankers, Eastern Mediterranean Dynamical Tankers and Navarra Maritime are all included in the list for proposed sanctions because get this gets what’s happening basically you get Ukraine has added all of these firms to a list of international sponsors of war. It’s a little I don’t know what to think of that to be honest with you. It’s you know, I mean, I’m sure Stu, Stu is definitely on the international sponsors of war list for the way he talks glowingly about it. So I have no doubt that this list is probably a little bit political. [00:08:21][32.4]
Michael Tanner: [00:08:22] But it is funny to think that now all of a sudden abiding by the price cap, which was set in place by G7 nations and agreed upon by Ukraine, now if you abide by it and you follow the rules, you will get on the international sponsors of war. That seems a little bit like, okay, what more do you want? Do you just do you want to go for an outright ban and go for an outright ban? Just tell me that’s what you want to do. But they won’t they won’t necessarily make that total step. Why? I can’t tell you that but that’s what they want to do. You know. [00:08:49][26.4]
Michael Tanner: [00:08:49] I think moving on, the next thing that’s important to cover before we dive into finance is really you know, we’ll dive into a little bit of what the this Bureau of Labor Statistics report means, macroeconomically here in the finance section coming up. [00:09:01][12.0]
Michael Tanner: [00:09:01] But what it means for the oilfield service sector is interesting because we saw jobs climbed 5001 hundred in its to its highest level since March of 2020, which is absolutely insane because that is right before COVID hit. [00:09:14][12.8]
Michael Tanner: [00:09:15] So what does that mean? As oil prices have pretty consistently dog in the last three months, we’ve actually seen still growth in the oilfield service sector, which me seems to me activity is still staying high. We’ve seen rigs continue to rise companies might be figuring out or dealing with windfall profits that they’ve made from all of the, you know, the six-month period of $100 oil that they are continually to invest in capital. [00:09:40][25.6]
Michael Tanner: [00:09:41] You know, we’re about to cover some interesting thoughts from Devon there are other things companies are doing with their windfall profits, but they’re definitely dumping them back into pouring out more capital or else the oilfield services sector wouldn’t be hiring because, as you know, one of a very good proxy for how the industry is going from a spending level is how many jobs the oilfield service sector,. [00:09:58][17.8]
Michael Tanner: [00:10:00] You know, The Energy Workforce and Technology Council CEO Leslie Bryer this April jobs increase are significant and show the resilience of our sector through a slowing overall economy. [00:10:07][7.3]
Michael Tanner: [00:10:08] Do I necessarily agree that it’s a slowing overall economy? She’s right. Which is I guess I do agree with that. I think we’re headed off to a little bit more of a cliff than anything. But, you know, good for the U.S. oil sector. Love to see jobs keep going. It’s probably time. [00:10:23][15.6]
Michael Tanner: [00:10:24] Let’s go ahead and shift over to finance from from an overall market standpoint. The S&P 500 stayed fairly flat at a point about about 0.05 percentage point. Nasdaq’s off quarter percent drop. We saw Palantir announce earnings today. They were up 25 percentage points after huge revenue beats. [00:10:40][16.0]
Michael Tanner: [00:10:40] Oil trades up to 7296 really off the back of what I mentioned was a very good Bureau of Labor Statistics report, or as Reuters would tell you, a healthy jobs report. And we were up a little over about 4% on that number. [00:10:54][13.7]
Michael Tanner: [00:10:57] And what does that mean? Well, hopefully a continued strong jobs number, as some would say, would lead the Fed to maybe not continue to increase the overall Fed interest rates, because we know that increasing you know, we covered this last week on Wednesday, he specifically stated the goal of raising the rates is to put people out of work, bring down inflation. [00:11:18][21.6]
Michael Tanner: [00:11:19] Well, I mean, if the jobs numbers keep coming out good, I mean, what else really is there to do but keep raising rates? So if we keep having good job numbers, maybe that means we won’t necessarily need to, even if these numbers do come in. [00:11:32][13.3]
Michael Tanner: [00:11:32] Again, it’s a double edged sword we did see Dollar index increase a 10th of a percentage point. I just think 60 was probably a little low. I do think 70 to 75 is a much better range for oil so do I think we’re just going to bounce back here? Yeah,. I don’t see anything that necessarily in my mind changes that. [00:11:45][13.0]
Michael Tanner: [00:11:46] We’ll see an API number you’ll hear an API number today as you listen to this at 2:30 and we’ll cover it on that show and then Wednesday we’ll hear what that crude oil storage report is. You know, looking over at natural gas, I mean, really what we’re seeing is a second consecutive buying session, you know, really off the back of what looks like to be a little bit more weather. [00:12:05][19.2]
Michael Tanner: [00:12:05] We did see some wildfires in Canada that interrupted some output that did happen to boost cash markets. We do see we will expect about a 79 Bcf injection into the natural gas reserves. We’ll hear that number on Thursday. [00:12:18][12.4]
Michael Tanner: [00:12:18] I think the only other thing we have in our guy of the week, Devon Energy Report, will tomorrow report its first-quarter earnings. I guess before I say this, guys, if you’re interested, we there’s so many earnings I can’t cover them all go to www.EnergyNewsBeat.com Go search earnings you’re going to find all of the earnings there you can sort by all it’s going to be great but one specifically I’m only calling out for the title IR guy the weak Scott Cody and Chris Clark Devon Energy Reports First Quarter 2023 results declares a quarterly dividend and expands stock repurchase program by 50% to 3 billion. [00:12:50][31.5]
Michael Tanner: [00:12:50] They put that all in the title that is a middle finger to the Administration. Here’s what we’re doing with all windfall profits. Put it in the title. Scott Cody, Chris Car IR Guy of the week Early candidates. It’s only Tuesday I know but early candidates. You know, it’ll be interesting to see who beats them but I love it. [00:13:06][15.8]
Michael Tanner: [00:13:06] Again Earnings@EnergyNewsBeat.com is going to be the place for all of your earnings needs. Go there. I’ll love it. Appreciate it. I don’t have anything else for you guys today. I appreciate you checking this out. www.EnergyNewsBeat.com for Stuart Turley While he’s gone. I’m filling in. Michael Tanner we’ll see you guys tomorrow. [00:13:06][0.0]
