“Let’s not forget the record number of new regulations forced down the throat of American industry. If that can be paired back that will result in a cost savings to the energy companies.”
1. What do you reckon is the savings that energy companies will recoup on reduced regulation?
2. Do you think that those savings will be passed on the consumers or instead to shareholders? As an investor, I hope and expect it will be to the latter.
Either will work for me. If they wish to pass on to the shareholders, that’s fine. If they wish to use it for additional exploration or R&D that results in new technology that ushers in lower cost and increases production, that’s fine too.
Obviously, in some some areas extraction costs much less than others. How much oil in “cheap” areas was blocked by Biden? What would be the break even production cost in those areas?
We have a “weird” situation @ present where oil is not truly fungible due to gov’t intrusions, and, the war in Ukraine, and the resulting sanctions: The sanctions seem to work a while, then Russia figures out work-arounds, then sanctions are strengthened and the cycle repeats. A side effect is overextended transport capacity. (The Houthis are affecting that, too.) The most recent round of additional sanctions has resulted in India and Russia refusing deliveries from (apparently) quite a lot of sanctioned “grey fleet” ships. I don’t personally see an easy workaround this time, but, we shall see.
I do see Iranian oil largely removed from the market, again.
If more Russian oil goes the same way, and tankers are available, the oil companies extracting oil operating in the US may have a lucrative market. Additionally, the Ukies are using more and more advanced drones, and getting better and better with them, to hit major Russian oil infrastructure.
This does not bode well for Trump, however - he BADLY needs low oil prices to keep inflation tamped down in the US. If he can’t manage that (keeping inflation down), the elections in 2026 and 2028 will be very tough indeed. :-(
I do see one possible “out”. The Euros may conclude that “break even” production is to their advantage in taking punches @ Pooty, and follow the present Norwegian model of rapid expansion of production, but invest in such anywhere they can, even in the US. This perhaps with price supports or other “insurance” to keep their oil and gas companies afloat should prices dip too low. That is, the goal is not profit, it is to weaken Putin. This would minimize balance-of-trade issues that Trump likes to complain about, keep global gas and oil prices down, and it would help keep inflation down - a big favor to President Trump (and people like me on limited incomes, too!)
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