沙特管道中断致油价飙升，中东供应风险加剧

You know, Saudi Arabia from from its most recent monthly data is only producing 6.3 million barrels a day right now. This is effectively a three-alarm fire in the oil space. Saudi Arabia is generally sort of an anchor supplier for the global oil market and the fact that they're basically having trouble getting their oil to market because of the current issue with the pipeline or the Strait of Hormuz being closed really highlights how much of a challenge we remain in in the oil market.

And as you noted, the you know, the product prices, diesel and gasoline are really telling the story. So, we've got US diesel over $6 a gallon right now, US gasoline over $4 a gallon and we're going to see continued tightness until we get, you know, better flows out of the Middle East region.

Rob, if I'm a historic if I've been a buyer of energy coming out of that part of the world, I have to diversify, it seems like. I have to get away from that because I can't see a scenario where we go back where that is a reliable source of energy. Are we getting to that point yet?

Well, it's going to take years, Paul. The reality is sure, you can diversify away from a specific region if you want to, but this is a very capital-intensive industry. You have to think in years and decades to bring projects to fruition. And so, we're going to see a reordering in our view of the global energy landscape. That's going to be more pipelines, more supplies in regions outside of the Gulf. It's also going to mean things like electrification, moving away from oil and gas where possible.

We're really seeing some big upticks in EV numbers in places like China, and I think that's part of their strategy, but these are big, slow-moving chips. It'll take a long time to make ourselves more resilient and less subject to what's going on in that region.

Okay, you mentioned how in China they're really shifting towards EVs, but that's kind of accelerating process that's been in place there. Here in the US, we are very much all in on these big SUVs that cost more and that carry higher profit margins. Are we seeing any demand destruction with oil prices where they are right now? Or is this just me and John Tucker complaining about our higher gas prices?

Well, the interesting thing about oil and oil products, diesel, gasoline, is that in the short run, they're relatively inelastic. You don't have many options. You know, maybe you can cut out a trip or two. You can You can try to be economic about how you approach it, but you're a price taker. Over the long run, you can substitute your vehicle, you can make some changes to behavior. You could take train more, things like that, but I think for now, you know, we haven't seen very significant demand destruction across the globe.

At the end of the day, the economy is run and powered by oil to some extent, and so, you know, if if you if you have demand destruction, that means lower economic output. So far, the economy has hummed along through all of this, and so consumers are just taking the price and bearing it for now. I think longer term, you will see folks start to adjust, perhaps even here in the US. We're relatively rich country, but $4 gas, $6 diesel could start to hurt some pocketbooks.

Okay, so it sounds like John and I will be complaining for a while, Paul.

I think so.

I think what we're learning, Rob,

Go ahead, John.

It's what we do.

It's what

[laughter]

That's how

we roll here. Rob, I think what we're all learning here is none of the neighbors of Iran in the Middle East, whether it's Saudi Arabia, Oman, Kuwait, I mean, nobody really has any control over Iran, any influence at all, because all of these countries are getting hurt badly.

That's right. You know, there's a reason that former presidents have been, you know, reticent to uh take action against Iran. This was sort of the worst case scenario. There was always a sense that the Strait of Hormuz could be vulnerable, and uh you know, we're seeing that play out in real time right now. Hopefully, there's going to be a solution where cooler heads prevail, and you know, we get better flow of molecules out of the region, but there's not an obvious exit ramp at this point.

Quick question before we let you go, Rob. Um we know that fuel supplies have been disrupted in Russia as well, because Ukrainian strikes have um gotten in the way of our fighting capacity there. President Trump said he had warned Ukraine to stop targeting Russian refineries. You think that will lead to anything? Is that meaningful?

Well, they the global oil market, energy markets are very tight right now. The fact that there are also challenges in Russia is just one more piece of the puzzle, and you know, we we've experienced numerous geopolitical energy shocks over the last decade or so now. The first one really kicking off when Russia invaded Ukraine, and then earlier this year when US uh started conflict with Iran. And so, you know, I mean, you can split hairs, but the fact that uh Russia is also challenged right now is just one more problem that's uh keeping crude markets tight.