Crude oil is selling for about $75 a barrel. To be precise, as of 22 June 2025 the price of a barrel of West Texas Intermediate was $73.84. The price of a barrel of Brent crude was $77.01. [We do not need to concern ourselves now with the question of why there is a difference.] This is at the high end of the 'Texas tea' recent trading range but does not represent any break-out. Interestingly, there was no sharp move in response to the election last year of a President of the United States devoted to a platform of "drill baby drill". MAGA ideology might suggest that all the new running-room for the domestic oil industry should produce expectations of an abundance of the black gold, leading to a sharp fall in prices on supply demand grounds. But no -- those transactions within the $65 to $75 rage just kept on rolling. Also, if the markets expected a full-on war around the Persian Gulf and, say, the prolonged closure of the Strait of Hormuz the prices f...
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The BBC did a report recently about how Russia is evading the sanctions intended to punish its invasion of Ukraine. Apparently, UK law allows that country to import refined petroleum products without regard to where the crude came from. This creates a neat loophole. India (whose foreign policy is at best ambivalent on the subject of the war in Ukraine) imports the crude, refines it, and sells it to the UK. The BBC credits the Centre for Reseach o Energy and Clean Air (CREA) for the key research here. CREA's Europe-Russia policy analyst, Isaac Levi, is quoted saying, "The issue with this loophole is that it increases the demand for Russian crude and enables higher sales in terms of volume and pushing up their price as well, which increases the funds sent to the Kremlin's war chest." Russian oil getting into UK via refinery loophole, reports claim (bbc.com)
A recent article in SLATE bore the questioning headline, "What happens if oil doesn't recover?". The question is a timely one. Oil prices have taken a beating of late. I have a precis of the reasons why in a recent post here about Berkshire Hathaway and Occidental Petroleum, and won't recap that. The brief dip of near-month futures into negative prices -- companies were paying good money to cancel deliveries of the stuff -- drew a lot of attention. But let's look at the big picture to fix the size of the drop. Through December 2019 the price of West Texas Intermediate rose slowly and, it seemed, steadily. It went from $55.86 per barrel when the month began to $61.40 at year's end. In January, before most of the western hemisphere even knew the word "Wuhan," the price began a decline. WTI ended January at $51.56. The decline became much more dramatic in February, down to $44.76. In March, it fell off a cliff, ending that month at $20.48, only a...
Wave energy converters are in principle no more exotic than windmills or hydroelectric plants. Each of these three systems exists to turn kinetic energy, the motion of sea water, air, or river water respectively, into electricity. Contemporary exploitation of this idea as it applies to waves may be dated to the invention of the Salter duck wave energy device in 1974. That was of course inspired by the oil crisis of its day. In October 1973, the Arab members of OPEC declared an embargo on the sale of oil to the countries they saw as assisting Israel. In the final week of February 1974, according to AAA numbers, 20% of US gasoline stations had no fuel. By the end of the embargo the following March the global price of crude oil had risen from $3 to $12 a barrel. It was a fruitful moment for energy-related innovations. There have been many innovations and elaborations of the idea of wave energy since the days of the Salter duck. Also, efforts to make this a significan...
At this time of year I ask myself what were the biggest stories of the past twelve months in business/financial news. Of course, I choose the ones I do largely because they illustrate an important theme, and in the list below I'll spell out and boldface the theme. Yet the theme itself isn't the story. Here are the twelve stories, by month, that especially caught my attention and that in retrospect I recommend to yours. 1. January. Immigration. Well, of course. But I want to highlight a different aspect of the immigration question than the one that has caught the most attention. In the early days of the new year, Reuters appears to have heard from sources that the President elect (as he then was) was in talks with hi-tech employers about the possible overhaul of the H1B visa system. At the end of the month, word leaks out that the now President, Donald Trump, is moving in the opposite direction from what those employers presumably had hoped . This will...
So: if it isn't the consequence of a push by the oil companies, why ARE parts of ANWR on the verge of being opened for drilling? Three closely related reasons come to mind. First, because the Murkowski family has a long memory. Second, because the US budgetary/legislative process is badly broken. Third, because even if the corporations are not enthusiastic, once the opening takes place there WILL be bids for the rights to drill specified parcels, and the US government badly needs new revenue streams given its state of indebtedness. Late in the Clinton administration (back when Big Oil WAS pressing the point) the House of Representatives voted in favor of a bill to allow some drilling, and Alaskan Senator Frank Murkowski pressed for Senate passage, but couldn't pull it off. Alaska is now represented in the Senate by Lisa Murkowski, Frank's daughter, the woman portrayed above, and she is fervent about the family tradition on this point. T o Ms Murkowski is due appare...
An odd twist has appeared in our long national debate about opening portions of the Arctic National Wildlife Refuge to oil firms for drilling.. The twist is this: at a time when the oil companies themselves aren't pushing for any new rights in the area, they're about to get those rights handed to them anyway. One of those you'can't-get-it-until-you-no-longer-want-it gifts. Today I want to focus on why the oil companies no longer want this. Tomorrow we'll talk about why they may be about to get it. This part is easy: they don't want it because they're holding too much oil already. The world is awash with the stuff. Recall that in early 2013 the price of Brent (North Sea) crude was above $110 per barrel. It stayed in that neighborhood, which seemed normal at the time, until mid 2014 and then began a historic collapse, getting to $50 a barrel by the end of 2014, then it firmed briefly until the summer of 2015 and collapsed again, getting below $40. (I...
I generally ask myself at this time of year what were the biggest stories of the past twelve months in business/financial news. Of course, I choose the ones I do largely because they illustrate an important theme, and in the list below I'll spell out and boldface the theme. Yet the theme itself isn't the story. January: Collective bargaining. The U.S. Supreme Court hears arguments Jan. 11th about public sector unions, mandatory fees, and the economics of the free-rider problem. In the spring, after Scalia's death, it splits 4-4 on the subject. February: Economics of crude oil. Iran takes a stand-offish posture toward the efforts of other oil-producing nations to cut production, wants to get itself back to pre-sanctions levels. March: Smartphones and privacy. The face-off on iPhone encryption and the demands of the FBI go before the U.S. Congress as this month begins. Later in the month, FBI backs away, says it may have found another way. ...
Does anyone else understand this? In the second debate, asked about energy policy, Trump responded with an example of his customary stream-of-consciousness. I won't quote it or try to dissect it all. But it ended with this. Trump talked about how foreign companies are buying US companies in the oil & gas market, in order to get a hold on their plants. They are "buying so many of our different plants and then rejiggering the plant so they can take care of their oil." Huh? I don't know what he means by this and nobody yet has been able to enlighten me. Let's take a stab at it: he means buying oil companies to get their refineries? Let's try to be specific. In 2011, a major international oil company, Statoil, spent $4.4 billion Brigham Resources, a small but innovative shale-oil firm active in North Dakota. Statoil is 67% owned by the Kingdom of Norway. So is Norway having refineries (or "plants" in any sense) rejiggered so they can t...
Meg Jacobs has written Panic at the Pump, a history of the 1970s energy crisis in the US which, in her view, destroyed post New Deal liberalism, bringing a generation of small-government conservatives to power. There were two distinct oil shocks: the first arising from the Yom Kippur War and the resulting embargo (1973-74), the second from the fall of the Shah in Iran (1979). I haven't read the book, except for brief excerpts available online. I notice it here only as a work likely to prove of interest for my astute and ever-curious readers. Here's one of those brief excerpts:"[T]he embargo stunned Americans, as if they had come under a surprise attack, if not an outright act of war, because of the serious implications for the economy and the country's security. By 1973, Americans relied on oil for almost half of their energy needs, and each day imports made up an expanding portion of the country's supply." Imports, the author says, were 36% of US oi...