Daily Energy Standup Episode #229 – Weekly Recap: Energy on the Edge: Geopolitical Turbulence and Industry Shifts

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

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Stuart Turley: [00:00:14] This is our weekly recap. And I’ll tell you what, it’s kind of fun. Today is October 14th. Hope you’re having a fabulous weekend. Our hearts and prayers are going out to the folks over in the Middle East and in Israel for the conflict. I hope everybody stay safe for this week. It has been a crazy week. We’ve had so much news going across the news desk, not just the geopolitical things, but there’s a couple of things. There are three critical things to take a look at the price for energy, oil and gas. First thing, if Israel does retaliate against Iran and they take out their oil exports, prices are going to shoot through the roof. So Iran had gone to about 3 million barrels per day exporting China and India had been buying all they could get their hands on, and that was giving $70 billion to Iran through all of their cash. That has been in conjunction on where that had gone. The next one that could possibly happen is if so, that is Israel taking out Iran’s export. The second one is if Iran minds the Strait of Hormuz. If that happens, we’ve seen the price go up in oil and exports and cripple exports. The third item that is up right now in the air is the fact that the the Mediterranean, the Leviathan field is right now they are evacuating oil platforms off of the Strait of or excuse me, off of the Mediterranean. Michael and I have talked about this for years. It is actually the Club Med, as he and I talked about, one of the biggest oil and gas or excuse me, biggest gas fields. 20% of Egypt’s natural gas is now being looked at, being more on shut off. That’s going to affect a lot of people in Egypt. Egypt has a real dilemma going on. If they open their border, they’re going to just open up the Gaza Strip for every all just to say they’re going to lose their Palestine potential under the U.N. Security Council. That had been going on. If they leave it closed, there is a potential for more deaths on the Egyptian border. The second order and third order of magnitude of all of this going on right now is the U.S. oil and gas shale is becoming more and more important. When we take a look at the important articles in Michael assessment of the Exxon Petroleum acquisition or merger with Sheffield’s company Pioneer Resources, all MP operators, all oil and gas employees, all Americans are going to be more dependent for internal energy security. The third order of magnitude is our administration better get their act together on U.S. energy policies. Last one Coming around the corner is China. Who knows what they’re going to do? But I’ve heard rumblings that if they did ever say there now’s the time to do it. Now’s the time to do it. Hey, on energynewsbeat.com subscribe like share and share with your dogs. Share with your family. There’s a couple stories out there that are pretty telling of what’s going on. Clean nuclear power. The North Carolina legislature says yes with veto override. So they know North Carolina is now saying they are all in on nuclear. Pretty important. Taking a look at Katanga is last Jaguar and boomers. The wind farms are their newest threat there. That is huge because the energy hypocrisy of the wind farms and the amount of death and slaughtering is sad. Where? How do we protect animals against wind? How do we justify the lack of environmental caring on the green energy side? I’m a humanitarian and a ecological fan. Where’s the outcry? And so when you take a look at India’s diesel exports to in Europe to soar to record high. That article’s got a lot to it because it is all. Intertwined. And this is why we have really changed from just an oil and gas focused to energy focused. We all need to elevate humanity out of energy poverty around the world. Hope you have a fantastic weekend. Pray hug your family members and keep an eye out. Thanks and have a great day. Talk to you all soon. [00:05:33][318.3]

Stuart Turley: [00:05:34] Okay. It is a horrific thing and our hearts and prayers go out to everybody but Michael with us and taking a look at the energy news beat, this is also about geopolitical and energy. And so when we we have to understand, the attack happened on an anniversary. 60 years ago, the Yom Kippur War of 1973, October six to October 25th. Here’s the key. I got this graphic in there, and this is off of Twitter. Crude, Michael went from $5 to $50. Wow. I went to Oklahoma State. But what percentage is that? A bunch. Interest rates from 6.5 to 18%. [00:06:19][45.0]

Michael Tanner: [00:06:20] It makes me shiver. [00:06:21][0.4]

Stuart Turley: [00:06:22] Gold 42. 22 to 875. Stocks lost almost 50% the following 52 weeks, but ended about even after seven years. So this was the Yom Kippur War. And Yom Kippur is a really big day for the Jewish faith. And so when you go in, take a look at the other things in here. There are several bullet points that I just want to cover these as we outline them out. The crisis is not a repeat. All of the Arab countries joined in against Israel. This is now not that Egypt, Jordan, Syria, Saudi Arabia and the rest of the Arab world all pegged piled in on Israel. This is Palestine and this is Iraq, excuse me, Iran. And so when you sit back and take a look at Iran, what just happened, Michael, the Biden administration just freed up $6 billion. There is a correlation there. The oil market itself doesn’t have any of the 3rd October 1973, oil demand was surging. The world had all of its spare capacity just wiped out. Now we have OPEC and we have Russia and we have OPEC, plus balancing out production versus demand. And so, Michael, you and I have been beating our heads up against the wall trying to figure out supply and demand rules have been thrown out. And so this is not the same. And I think the author has a very good point, that, number two, the oil market is not the same. However, they are not. Take a look at this. Aren’t trying to boost prices beyond a few extra dollars? OPEC and OPEC plus and the Saudi leaders have said they want it at that hundred mark. They don’t want to go below that because their profits are coming up big. [00:08:19][117.1]

Michael Tanner: [00:08:20] So all in this and this plays into the idea of, you know, having as much spare capacity. I think what’s interesting is this. And so the article that you bring up here mentions that this terrorist attack that’s going on right now in Israel is it’s from Hamas, but it’s really led behind the scenes by Iran. And part of this has been a result of the fact that we’ve been allowing and allowing Iran to bypass, quote unquote, export oil bans. And we’ve been sort of turning a blind eye to this. So one thing I find interesting is that in response to this attack, we might now enforce actually start enforcing these sanctions. It remains to be seen, but they might doing this. That alone might push oil prices above $100. [00:08:58][38.0]

Stuart Turley: [00:08:59] I don’t think we will. Okay. I’m going to take the advocate side of the Biden administration, that the Biden administration does not understand where the next bag of depends is going to come from. They have yet to They have weaponized the dollar and they have no way to enforce it. So I, I truly don’t think they’re going to enforce anything on Iran. So I. [00:09:21][21.8]

Michael Tanner: [00:09:21] Love. Javier Blas I’ve read a few books by him, he’s a great reporter from Bloomberg. [00:09:25][4.0]

Stuart Turley: [00:09:25] Yes. [00:09:25][0.0]

Michael Tanner: [00:09:26] The number eight point in this article is key. I disagree with, though I do not believe we have enough oil in the Strategic Petroleum Reserve to deal with another crisis. That was basically his other non comparison to 1973 was that we have an SPR to work with. We’ve got a little bit of it. We don’t have much. He goes global. It had its lowest levels in 40 years. [00:09:45][19.2]

Stuart Turley: [00:09:46] I was going to say. [00:09:46][0.4]

Michael Tanner: [00:09:46] If it’s a big although although he’s dead, he could maybe help us out in the future. [00:09:51][5.0]

Stuart Turley: [00:09:53] Javier’s a rock star. And I mean, he is absolutely a very, very knowledgeable. But we are in a a geopolitical nightmare. [00:10:03][10.5]

Michael Tanner: [00:10:05] One 2% in baseball. You pat, you bat, you bat 300, you bat 33% of the time, you’re. Hall of Fame. [00:10:11][6.0]

Stuart Turley: [00:10:11] That’s right. Now you take a look at who’s going to benefit out of the Middle East war. It’s going to be Russia. Russia and Iran are going to do. But I Iran’s got some cash flow that they’ve unbelievable cash flow now. You’re going to see that come in. But you’re also going to see the oil from Russia. They’re going to sell everything they possibly can. So the winners out of the war is Iran and Russia. [00:10:40][28.7]

Michael Tanner: [00:10:40] So before we move. [00:10:42][1.8]

Stuart Turley: [00:10:42] On an energy side, I got to clarify that the energy winners. [00:10:46][3.6]

Michael Tanner: [00:10:47] I want to bring it back to the beginning of the article. You talked about, you know, the comparisons to the Yom Kippur War and what’s happening now. You talked about oil prices going from 5 to 50, interest rates from 6 to 18, from gold to 42 to 875. Do you believe that’s going to happen right now, or do you buy this article’s analysis that it is different and we may not see that large of a spike in commodities prices? [00:11:09][22.3]

Stuart Turley: [00:11:09] It is different, but yet the same. And we have a fantastic person out there. What is it? Both of these things can be true. [00:11:18][8.3]

Michael Tanner: [00:11:19] I love Tisha Schuller. Both issues can be true. [00:11:22][2.9]

Stuart Turley: [00:11:23] And this is where I think we’re going to play both sides of the fence here, Both sides. But both things can be true. And that is you take a look at the percentage of a 5 to 50 crude. We’re already at 100 at the strike price where Saudi Arabia really would like to keep it at. Russia is making money hand over fist. [00:11:41][18.6]

Michael Tanner: [00:11:42] We’re 80 for Brant, so we’re not quite there yet. [00:11:44][2.6]

Stuart Turley: [00:11:45] But but if you take a look at last week, last week, Russia sold crude Russian crude to India for $20 over over the sanction price. You know, they’re not supposed to sell any Russian oil over $60 a barrel. They sold it at $80. India bought it. They’re buying everything again at 80. So even at a discounted price, it’s their interest rates. I’m sorry. They’re going to look at raising the interest rates again because they are the Fed is looking at. Michael, are you ready? They think that the economy is still going good and they think that three and a half percent unemployment is actually too low. But there you have to analyze and I’m going to go off sidetrack for just one second. The jobs numbers this past week were absolutely horrific. 40% of that, three estimated 300,000 jobs government. The other 40% were part time jobs. So you start taking a look at the real high dollar, high net worth. Those were 10,000 jobs. So the real job number, federal government does not create any value or jobs to the market. They are a job sucking black hole out of the life of Americans. So think about those job markets. Think about the Fed thinking that they’re going to increase inflation. Will it get to the 18%? I don’t know. Will it get to higher than it is? Yeah. I think you’re going to see two more Fed rate raises. [00:13:29][103.8]

Michael Tanner: [00:13:29] I think you’re going to have to because I think you’re going to I think you are going to see a commodity price, especially where we see natural gas at $3.30. We’re going to see, I think, a commodities boom. So great coverage, energy news. It’s going to have everything breaking down. What’s going on with this terrorist attack in Israel from an energy side still is going to keep us up to speed. We appreciate it. We got to just talk X on here. So, I mean, as we listen to this on Monday, obviously you’ve heard the rumors. And as you listen to this, you know, we’re recording this on Sunday. So if if the rumors actually become true, we’ll try to throw in a new segment. But at the time of recording this, it’s just rumors. Right now. The rumor is ExxonMobil is is looking and on the verge of purchasing pioneer natural resources for an estimated $60 billion. Pioneer is an exclusive Permian operator and was one of the first companies to really take the Permian horizontal in terms of large scale developmental. Scott Sheffield, the long time CEO there since 1997, after their combination, after the combination with Parker and Parsley, he takes over as CEO, set to retire at the end of this year and turn over operations to CEO Richard Daley. But I don’t think that’s going to happen. Do I think this is a deal that I think when you look back there, you know, multiple people in the past six months have said this is probably going to happen. Exxon is going to go buy somebody. They’re going to buy. Right. They’re going to buy Pioneer, they’re going to buy EOG, they’re going to buy Oxy. They’re going to buy somebody. And, you know, and, you know, yes, buying, you know, someone for five or $10 billion does good. But we knew that in this new age of M&A and consolidation, we knew something like this was going to happen. And I think the real question and the real the real analysis point from this is exactly and Stu brought up brings a great article. Here. Exxon investors ready to embrace buying existing oil over new drilling. This is a topic I love because this comes back to the idea of, well, if ExxonMobil has the ability and has all of these premium locations that they could drill, why do they go need to buy Pioneer? Basically, the number two Permian player for 60 billion is that because their pioneers locations are better. Interesting. So now what you’re seeing is your ex you know, this is always what people say. Don’t listen to the words that I say. Listen to my actions. [00:15:40][130.7]

Stuart Turley: [00:15:41] Right. [00:15:41][0.0]

Michael Tanner: [00:15:41] Listen to my actually, yes, they have all these crazy locations and thousands of double premium locations. We got to get some merch that says that in everybody’s got these accretive locations. Yeah. What is the what is what are people actually doing? Exxon says we’re just going to go buy you. We have to go buy that 700,000 BOE a day for $60. Got to go buy it. What is right? We can’t. Why would we drill when we can go acquire? And I think that absolutely has been proven true. We’ve seen the rig count drop tremendously. I mean, I don’t have the rig count. Let me pull up the rig count here. But is that we that drop how Michael dropped on Friday, that. [00:16:17][35.5]

Stuart Turley: [00:16:17] The business models that you and I have talked about for its. [00:16:20][2.7]

Michael Tanner: [00:16:20] Oil prices have been up year over year. Oil prices are up about 50% and the rig count has dropped by 143. It’s due as it’s watch what I do not do what I say. [00:16:31][11.3]

Stuart Turley: [00:16:32] Right. Michael, the best investment deals do you and I have been working on. And when oil companies ask us to evaluate deals and we take a look at this, some of the best deals for investors end up with a split between drilling new wells and buying PDP. And when you take a look at that, that’s exactly what the big boys are doing. [00:16:55][23.3]

Michael Tanner: [00:16:56] Well, it’s a little I would say it’s a little bit more nuanced with that. Every company has a few good locations. The problem is nobody has it. Everyone claims they have 1000 good locations and that’s a scare. So what you’re seeing is Exxon may have some good locations, but in their macro analysis, they want to grow. They have a target in growth. They see that target for growth is easier and quicker by using M&A to just acquire that missing body per day instead of going out and drilling it. So what does that tell you? The risk off play is acquisition. So for me, what this says going forward is you’re going to see a lot more of this. Chevron is squarely on the clock right now and they’ve got EOG, Oxy, Diamondback. There’s a few others out there that are, in my opinion, I’m sure, hard at work talking to the Conoco Phillips, the Chevron’s and probably the Shell’s of this world to say what next. [00:17:44][48.5]

Stuart Turley: [00:17:45] Right. And I think you’re going to see more and more of it. [00:17:47][2.3]

Michael Tanner: [00:17:47] So who do you think? I mean, I have my opinions, but who do you think is the next company give you a prediction right now? Because everyone’s going to be throwing out the predictions. Let’s get us on the record. Who do you think you’re the next M&A combo is? [00:17:59][11.7]

Stuart Turley: [00:18:00] Well, that’s a big open ended question. They’re almost all in play. And the reason for that is you’re going to take a look at does a company like Exxon or BP or anybody else actually want to come in and say, I want end of the bargain? Do I want to get into the Eagle Ford, Eagle Ford on the way down and M&A activity? So I think that it’s going to be you take a look at, you know, Continental’s coming back and it went back private. You take a look at is it a Haynesville plant or is it a marcellus play? It’s going to be play driven, I believe. [00:18:36][36.7]

Michael Tanner: [00:18:37] No, you’re absolutely right. You’re you’re absolutely right. And that’s why I think there’s one company that I think I’m going to take off the table. I don’t think Oxy’s going to sell. No, I think they could sell their Colorado assets. But I don’t think Warren Buffett is necessarily looking to cash out per se. And I think he’s going to be very picky and probably doesn’t want to own Chevron stock because I think that’s the other end of the deal with this Exxon pioneer. We don’t know whether it’s going to be a we don’t know what the final value is going to be. I mean, 60 billion on a market cap of 50 billion for four pioneer seems a little light seems to be that they’ve got to get a you know, 6570. I don’t know what their their corporate models look like. We’ll have to plug the numbers in but seems to be that’s a little light for Pioneer. So the question will be, is that a mix of cash stock or, you know, currently as of 2020, you know, their last quarterly report in 2023, they got about 30 billion cash on hand. So are they going to finance the rest to pay all in cash or are they going to finance that with a mix of stock? And I think that will tell me what happens with Oxy, because, remember, Warren Buffett is still the largest shareholder in Oxy and has a lot of control and a lot of say and I wouldn’t say control, I would say a lot of gusto to be able to say, hey, no, I if we’re going to sell, I want all cash. And if he wants an all cash offer, I doubt anybody but Exxon’s going to be able to do that. And Exxon just took themselves off the table by acquiring Pioneer. So I think the less Warren Buffett is looking to take Chevron stock, and I think Chevron or BP are probably. The only two companies that could buy oxy unless he wants to do that, which I don’t think he does, because he could do that right now. He could do that if he wanted to, but he’s not. Why? Because I think he wants the large independent. I don’t think he wants the large integrated company because I think he sees that they’re not as tied to the commodity price, which, again, he’s playing a commodities boom year, clearly, and he’s playing off the macro theory of energy is going to become more scarce, which means those things are to become more valuable. So I think I don’t know what the next is. I think EOG is probably the next one off the table. Chevron, EOG makes sense. The problem is EOG is a little bit spread out. They don’t they have their core Permian operations. I think you’re right. Still, the plays are going to be extremely helpful, but I’m taking Oxy off the table. I think they’re going to stand tight and not and if anything, they’re going to try to swoop up some of the smaller guys in order to prop themselves up. And maybe two years from now they look to sell. But I think Warren Buffett’s holding out right now. [00:21:01][144.1]

Stuart Turley: [00:21:02] I would agree. But let me throw this prediction out there. I think that Oxy has teed itself up for carbon capture, and I think that it has done an outstanding job getting into that multitrillion dollar market. We’ve seen the, quote unquote, supposed death of ESG investing. I call for a great awakening in that last year. I think that within the next the next two years, you’re going to see the lack of funding being able to go into carbon capture. Oxy is teed up right now for success as long as the gravy train for funding keeps going because you’re going to see the market now coming around and they’re saying, is the regulatory issue going to start coming in and saying, are the mandates going to be on declaring your carbon output? Well, then you got to buy carbon credits or you got to do carbon capture. Carbon capture is a market that is solid today. I think that if it goes in a certain way, carbon capture market is going to follow the way of wind. How many years from now? I’m not sure, but wind is becoming unsustainable and I think carbon capture market is going to be unsustainable. So Warren Buffett, I think is on track now with Oxy. I think Oxy for the long term is not a good play. Makes sense. [00:22:33][91.3]

Michael Tanner: [00:22:34] Now. I agree. I think again, it’s it’s crazy so I think not that this is a you know we will obviously if we will we will probably once this actually happens, we’ll probably have to do a separate almost breaking news podcast to probably break down all the details in there. We may have to do a little deal of valuation. I think it’ll be interesting to see what what the what the value comes down. But there’s so much that goes into this this valuation. I mean, you know, Pioneer is is stripping lithium out of their water and selling reselling that lithium on the open market. So there’s a lot more that goes into it than just some PDP in some parts. So very interesting. Break this all down. [00:23:08][34.3]

Stuart Turley: [00:23:09] Oil prices and energy stocks surge after attack on Israel. Here’s what comes next. This is a pretty nice little article kind of following up from yesterday. Right out of the article, U.S. listed energy stocks were set for a positive open. Among them were ExxonMobil, up 3.9 in trading, Chevron was up three, Conoco Phillips was gained 4.4, Occidental was up 4.2. And Michael, a lot of the investment houses around the U.S. were saying how even Halliburton was up 6.1 formerly short Schundler Shamblers boy shower J worksheets not. [00:23:58][49.2]

Michael Tanner: [00:23:58] Even a show. That’s unbelievable. Schlumberger For all you folks listening, well. [00:24:02][3.8]

Stuart Turley: [00:24:02] I am such a dope. 4.3 that is Oklahoma State graduate, by the way. Okay, These events are really here’s where I want to just kind of give it a shout out to our show yesterday, Michael, yesterday on the show, we said that it was a 300% increase back on the first Israeli Yom Kippur War, $5 to $50. Right now, we don’t see it going that way because it’s a different market. Several different things are going on. On last, because of the Secretary Yellen out there saying about the Russian crude going out, the Iranians sanctions don’t work either. If Israel goes out and takes out the Iranian oil wells, you will see a huge spike. And there’s two reasons for this. Yeah, I’ll. [00:25:00][57.1]

Michael Tanner: [00:25:00] Also be getting drafted if that happens. So let’s hope that doesn’t happen. [00:25:04][3.8]

Stuart Turley: [00:25:04] It doesn’t. But here’s why. There are two stories going out. As to why I ran it, allegedly for our podcast listeners, I’m holding up the quotations. Allegedly is not funding Hamas by the $6 billion that the Biden administration put in. I heard great things that it was not great things that they did it, but the amount of oil that they’ve been selling to China, just like Russia at that $80 mark above sanctions and outside of OPEC plus production quotas has, they think $70 billion has been the revenue stream. So $70 billion funded the attack on a good portion of it instead of the 6 billion. Loved all that analysis. Here’s where I think it’s going to really go on. Does all that make sense, Michael? [00:26:06][61.9]

Michael Tanner: [00:26:07] No, it makes sense if you can. You find it interesting. In the midst of an oil price shock, the stocks that are up more so are Marathon and Oxy and Conoco, which are more pure play operators than you see Exxon and Chevron only up 3.93 percentage points. So you can you can see where the the difference comes in. I think the article that you have next, investors look to oil prices. Israel slash Hamas conflict, quote, unnerving global markets, points out that obviously oil prices are going to continue to rise. But I think what’s going to exacerbate the commodities boom issue is the fact that interest rates are about to spike. I mean, we’ve seen the odds for interest rates here at home to increase have basically doubled since this year, not doubled. I think it’s about to have increased about 25% in the next Fed meeting after these results. So I personally do think that’s going to be the biggest hit when it comes to Wall Street is the fact that now interest rates are going to continue to stay high in this commodity style boom in order to help hopefully curb inflation. [00:27:09][61.7]

Stuart Turley: [00:27:09] I would agree. Major headwinds threaten offshore wind targets we’ve been seeing. Michael, you and I been talking about some of the real problems going on. But I think this is really happening to some big numbers here. And the last five years, the top four listed turbine producers outside China have lost $7 billion in over $5 billion alone. That’s a lot of billions, even by my standard. What did they say last year? [00:27:41][31.7]

Michael Tanner: [00:27:41] The chief executive of that same turbine maker, Vestas, says that the company lost 8% on every turbine it sold. [00:27:49][7.7]

Stuart Turley: [00:27:49] And that’s with tax incentives. So. Oh, really? Do what? [00:27:54][5.0]

Michael Tanner: [00:27:55] Oh, really? That’s with tax incentives. That’s war subsidy that’s posted. [00:27:59][4.0]

Stuart Turley: [00:28:00] Yes, subsidies. So here’s where it gets in here and says warranty issues drive turbine losses. These things were not made to be indestructible. They’re not made. The last 30 years, you and I have talked about my creation numbers from Oklahoma State University. I mean, my Korean broke four or five times and it is pathetic. They are fiscally unreliable from day one. So, okay, Siemens is now finding some serious problems. Here’s a quote from Dr. Wei Zheng. He’s a senior risk consultant at Natural Resources Construction. This is an offshore outfit. We are quite used to wind turbines with eight megawatts, nine megawatts, but we’re seeing newer models reach 14 megawatts or 18 megawatts a project in Australia, even planning on using 20 megawatts. Inevitably this size creates a corresponding increase in risk and more Wales Michael, that they can kill although wind turbine and get our engineer to pick them up engineered to work within certain conditions. There’s a lack of real world data on both performance and long term impacts on these larger turbines and their associated infrastructure. Okay. I’m going to go down to Rob West. I want to read this quote. Physics inherently punishes larger turbines. Larger blades will inherently deflect more, which means they need stiffer spark abs, shear webs and more expensive materials. They will also weigh more, which pushes more stress and strain through the blade, root and nozzle during each rotation. Rob West Thunder said Energy Michael, if our producer will roll this in wind turbine growth power output maximum rotor diameter. This almost reminds me of for our podcast listener. It starts in. 1995 with a little tiny little windmill. And then it goes to 2023 and it’s like, huge. This almost reminds me of the evolution chart. You see the monkey in the left hand side and he’s walking along and it’s keeps growing bigger. This is showing size. You hear this a lot, Michael. I know you do. Size matters, right? I know you hear this. [00:30:36][156.5]

Michael Tanner: [00:30:37] I don’t hear it as much as I would like to. [00:30:39][1.7]

Stuart Turley: [00:30:39] I’m not hearing it about your height. [00:30:41][1.8]

Michael Tanner: [00:30:42] Mm hmm. Yes. Definitely not hearing it as much as I would like. I do find it interesting, though, Stu. Darn physics, man. Physics is against ESG. I think that’s what I learned out of this. Physics is anti climate. [00:30:57][14.4]

Stuart Turley: [00:30:58] Oh, it is. And it it is unbelievable. Frazier McCain McLean, CEO of G. Cube Insurance. This is the other thing going in here. The push to rapidly develop more powerful machines is piling pressure on manufacturers. The supply chain and insurance market scaling up is creating a growth financial risk that pose a fundamental threat to the sector. He’s dead on. Right. And Michael, a few days ago we talked about on this very podcast, if you can remember, and I hang on, this is a moment of silence for your memory. Okay. Thank you. And that is that we talked about the TV, the Emmys, Michael, the insurance companies when we talked in the UK was one guy went from £1,000 of insurance cost to £5,000. Insurance is going to break the ESG moat. I guarantee you it’s the insurance guys and they know the number. Yeah, we’ll. [00:32:03][65.9]

Michael Tanner: [00:32:04] Charge you for it. Trust me. [00:32:05][1.2]

Stuart Turley: [00:32:05] Israel-Hamas conflict directly impacts oil and gas prices. I just talked to David Blackman about an hour ago, and as we were talking about it, he did agree that if there’s two really big unknowns out there, if Israel gets upset that the Hamas money to do the strikes in did come from Iran, Iran has gotten I’ve heard everything from 30 billion to $70 billion that they have shipped in income in oil going out to China, India, And I’ve even gone I’m tracking down oil to the United States and I’m trying to make sure I say that correctly. So I don’t want to give an immense mis information. So people are buying oil from Iran that has funded a lot of money. And people have been saying all over the place that Iran is a big supporter of Hamas. So if Israel tries to take out the export facilities in Iran, that will really make it tougher for Iran as well. I mean, excuse me, for India and China. And then there was also an article that just came out that Russia had sold oil to India at $80, which was above the cap, the the EU sanction cap of $60. So when you take a look at all that, that one thing could impact heavily the price of oil. I want to go into some natural gas here in a second. But if Iran mines the Strait of Hormuz, that could also that is a huge channel for tankers around the world. That could be another one. In this article that we were talking about, Israel has suspended operations at the offshore Tamar gas field and security precautions and is investigating alternative fuel sources. This is huge. It will also impact Israel’s trading partners, including Egypt, who imports Israel’s gas has has been cut by 20%. That’s a lot of gas for Egypt, although not directly targeted by Hamas. Israel’s Israel’s commercial ports have also been impacted by the surprise offensive. We continue to supply our customers, the spokesperson said. Chevron also, though, is focused on the safe and reliable supply of natural gas in the Leviathan field. The Leviathan field is huge and critical for the LNG natural gas into Europe as well too. It’s one of the world’s largest deep water gas reserves and 200 engineers. Designed with 7000 workers from 25 different countries built out the Leviathan field. We’re going to be watching this. And that is a huge one. Taking out gas production in the Leviathan field would be the other third cornerstone that if Iran got in and we really tried to impact this, this whole area could be impacted. A third order of magnitude would be the importance of the U.S. oil and gas shale plays coming online. So all of that is directly impacted on each other. [00:32:05][0.0][1877.9]

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