The Oil and Gas Global Markets Update with Jack Prandelli, The Merchants News Substack.

Jack Prandelli of The Merchants News Substack stopped by, and we had a blast visiting about huge changes in the oil and gas markets. At the end of the podcast, we also discuss how we should restructure electricity prices for consumers.

1. China’s efforts to reduce its reliance on the US dollar:

– China is shorting US Treasuries and buying gold to try to reduce its dependence on the US dollar in global trade, especially for commodities like oil.

– However, China still relies heavily on importing oil and gas, which is priced in US dollars through the petrodollar system.

2. The growth of US LNG exports to Europe:

– The US is rapidly expanding its LNG export capacity, which is helping Europe replace Russian gas.

– A key company, OneOk, owns a large portion of the pipeline infrastructure market supporting US LNG exports.

3. The performance and strategies of major oil and gas companies:

– Integrated companies like Exxon and Chevron are performing better than more specialized companies like Occidental.

– European oil majors like BP and Total are struggling more, with BP considering asset sales.

4. OPEC’s challenges in managing oil production and pricing:

– OPEC has struggled to meet its own production targets, leading it to consider changes to its pricing mechanisms.

– There are geopolitical tensions, like the US trying to influence OPEC members like Venezuela and Iran.

5. The role of natural gas, renewables, and nuclear power in the energy transition:

– The guests discuss the pros and cons of different energy sources, arguing for a balanced approach that ensures reliable and affordable energy.

– There are concerns about the ability of renewables alone to provide reliable power without fossil fuel or nuclear backup.

Stu and Jack cover a wide range of topics related to the global energy markets, geopolitics, and the energy transition, with a focus on oil, gas, and LNG. Based on the transcript analysis, here are the main topics discussed:

**1. China’s De-Dollarization Strategy**

China is actively working to reduce its dependence on the US dollar by shorting US Treasuries and accumulating gold. However, this effort faces a fundamental constraint: China’s massive need for imported oil and gas, which are priced in US dollars through the petrodollar system, keeps it tethered to dollar-denominated trade.

Beijing is bleeding Treasuries at a pace that would have triggered panic a decade ago.

From $1.32 trillion in holdings down to $683 billion.

That’s the lowest level since 2008, and their share of total foreign Treasury holdings has collapsed from 28.8% in 2011 to just 7.3% today.

**2. US LNG Export Expansion**

The US is rapidly scaling up its liquefied natural gas (LNG) export capacity, playing a crucial role in helping Europe transition away from Russian gas supplies. One Oak, a significant player, controls a large portion of the pipeline infrastructure that supports these exports.

11 European countries now source over 50% of their gas from the United States. Germany, Europe’s industrial powerhouse, gets 94% of its LNG from a single supplier 5,000 miles across the Atlantic.

But while everyone obsesses over export terminals and cargo rates, they’re missing the real money.

Someone has to move 20 billion cubic feet of gas per day from West Texas wellheads to those Gulf Coast liquefaction plants. The infrastructure gap between supply and demand is measured in billions of dollars and the company that controls that gap controls the huge cash flows.

That company just made its move, and the market completely missed it.

US LNG exports hit almost 110 million tonnes in 2025, making America the 1st country to breach 100 Mt in a single year. US now exports roughly 25% of global LNG supply, about 20 million tonnes ahead of Qatar.

**3. Oil and Gas Company Performance**

The discussion compares how different energy companies are faring:

– Integrated majors like Exxon and Chevron are outperforming more specialized companies like Occidental

– European oil majors (BP, Total) are struggling more significantly, with some considering asset sales

**4. OPEC Production and Pricing Challenges**

OPEC faces difficulties meeting its own production targets and is considering adjustments to its pricing mechanisms. Geopolitical tensions also play a role, with the US attempting to influence OPEC members like Venezuela and Iran.

**5. Energy Transition and Power Sources**

We debate the role of natural gas, renewables, and nuclear power in the energy transition, emphasizing the need for a balanced approach that maintains reliable and affordable energy while questioning whether renewables alone can provide consistent power without fossil fuel or nuclear backup.

Thank you for your time on the Podcast Jack! You are going to be going places.

Connect with Jack on his LinkedIn here: https://www.linkedin.com/in/prandelligiacomo/

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