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This podcast episode with Anas Alhajji provides a deep understanding of global oil and gas dynamics, highlighting the strategic moves and political influences that shape the energy industry.
The podcast episode delves into the intricacies of global oil and gas dynamics, focusing on the strategic decisions and political maneuvers that shape the industry. Key takeaways include an in-depth analysis of the Strategic Petroleum Reserves (SPR), the impact of the Biden administration's policies, Russia's strategic energy moves, and the multifaceted implications of oil and gas developments on geopolitical relations.
The discussion kicks off with the Biden administration's withdrawal of oil from the SPR, a response to anticipated production cuts due to Russia's actions in Ukraine but also tied to negotiations related to Iran. The SPR release was massive, and historically unprecedented in its impact, contributing to a substantial drop in oil prices despite financial losses on sold reserves.
The narrative expands to encompass the role of the US in LNG exports and its competition with Russian gas in Europe. It was revealed that the US 'deep state' had long-term plans to replace Russian gas with its LNG, leading to increased exports to Europe and a strategic edge in the energy market.
The conversation touches on the complexities of oil and gas markets, including OPEC+ dynamics, the interlinked nature of oil and gas, and the sophisticated level of competition and substitution among energy sources, which has significant implications for global energy prices and market stability.
Lastly, the geopolitical significance of the Red Sea is highlighted, as it has become a critical nexus for energy transition, hydrocarbon flow, and global trade, underscoring the broader strategies at play to maintain control over crucial waterways and protect the dominance of the US dollar in international trade.
The podcast episode underscores the nuanced, interconnected, and often covert strategies that define the oil and gas industry. It sheds light on the often-unseen political narratives that drive decisions like the SPR release and the US's role in LNG exports. The episode also emphasizes the importance of the Red Sea as a geopolitical hotspot, the strategic value of maintaining energy dominance, and the steadfast defense of the US dollar's global position.
In reflection, the episode reveals the complex layers of geopolitical energy strategy, highlighting how nations navigate the fine balance between economic interests, strategic planning, and environmental concerns. The overarching message is that the energy sector is not merely about resources but is fundamentally intertwined with national security, economic stability, and global power dynamics. The insights provided offer a profound understanding of the broader implications of energy decisions, setting the stage for future discussions on the evolving landscape of the global energy market.
0:00 - Intro
1:27 - Strategic petroleum reserves
16:53 - LNG
36:27 - Gradually, Then Suddenly
37:05 - Media portrayal and OPEC+ view of Russia
44:55 - Red Sea
55:35 - Venezuela and Guyana
1:04:54 - Media narrative battles
1:09:30 - Predictions
1:15:38 - Wrapping up
00:00:00:03 - 00:00:09:09
Marty
Yeah, that's. And we're jumping into it and us. It's great to have you back on the show. There's a lot going on in the world, particularly as it pertains to oil.
00:00:09:12 - 00:00:11:00
Anas
Absolutely. Absolutely.
00:00:11:20 - 00:00:39:08
Marty
But let's start with the Strategic Petroleum Reserves. I just saw a clip of Peter Doocy asking the White House press secretary about the Biden administration's plans to refill the strategic petroleum reserves, which have been drained over the last few years. And she, uh, had waved away the question and said, Hey, that's Department of Energy. What's going on with the Strategic Petroleum Reserves in America?
00:00:39:08 - 00:00:39:20
Marty
Right now?
00:00:41:08 - 00:01:10:07
Anas
Generally speaking, let's start from the beginning when President and I, I whenever whatever I say I am being a political. When the Biden administration withdrew oil from the Strategic Petroleum reserves and they got 180 million and then there were there were about 31 million deaths where mandated by the Congress. So the total was about 211 million barrels that been withdrawn in 2002.
00:01:11:02 - 00:02:00:28
Anas
If you look at the situation, the it is very clear that the Biden administration knew about the plans of Putin to invade Ukraine. So in August 2021, they contacted the Saudis and other Gulf states asking them to increase production under the guise that we have a recovery from COVID. The high oil prices are not good for the world economy, etc. For us, basically, we thought that the negotiations with Iran were not going very well and probably there will kind of harden the the sanctions on Iran and therefore they want someone else to compensate for the Iranian crude.
00:02:01:12 - 00:02:22:08
Anas
So that's our thinking. At that time it was related to Iran has nothing to do with the economy or gasoline prices. Prices were relatively low, probably like 60 to 70. So it did not make sense to focus on gasoline prices and the recovery. It made more sense at that time to look into a negotiation with Iran regarding the nuclear program.
00:02:23:02 - 00:03:01:21
Anas
What we knew later was that Putin was planning to invade Ukraine and December 2021. But because the Olympics of in China, the president of China basically asked Putin to delay the invasion so they won't tarnish the Olympics in China. So the invasion was delayed until February. During this time, the Biden administration shopped around and tried to put pressure on various countries, including the Saudis, to increase production, and they refused.
00:03:02:05 - 00:03:28:05
Anas
Now Putin goes to Ukraine and all of a sudden we have this massive rumor that Russian production will decline by 3 to 5 million barrels a day and prices skyrocketed from $80 to 130. But there was no actual decline, there was no actual cut. All this increase was on the rumor that we will lose 3 to 5 million.
00:03:28:10 - 00:04:15:01
Anas
We did not lose that amount. In fact, even when we look at 2023, when people were expecting that decline, the decline was 250,000 barrels a day and that's it. We were the first basically to tell people, look, there will be no decline. We studied sanctions. We looked at sanctions over 120 years. Sanctions never work. And the idea that the Russian production will decline by 3 to 5 million barrels a day because of sanctions was complete nonsense anyway, we ended up with a situation where the Biden administration, along with the International Energy Agency, were convinced that production will decline by three 3 to 5 million barrels a day.
00:04:16:00 - 00:04:47:26
Anas
Prices now are at 230. The Saudis and others are not responding because they don't want to break up opec+, which Russia is part of it. So there was no other choice in front of the Biden administration except to use the HBO. Now, why this is important, why they did not ask Latin America or South American countries. Well, they did not ask South American countries because they're all maxed out and there is no additional production they can't bring online.
00:04:48:28 - 00:05:13:24
Anas
They did not ask Canada because Canada does not have any spare capacity. They did not ask U.S. producers because U.S. producers were producing at capacity. In addition, all the shale is producing light sweet crude. Why the market needed medium, shower and heavy. So there was no other choice because the spare capacity was in Saudi Arabia and neighboring countries.
00:05:14:02 - 00:05:38:09
Anas
Those countries refused to cooperate. So what you do? So he decided to withdraw from the FBR. And for the first time in history, we've seen a recommendation I made to the White House 20 years ago, which is if you look at the literature of the SBR and you look at all the releases, there was no impact or if there is any impact, it is very limited.
00:05:38:19 - 00:06:07:14
Anas
Even the government studies show that the impact could be $0.01 to $0.05 decline in gasoline prices, which is very, very limited. So the suggestion 20 years ago was if you really want to release oil from the SPR, you have to release massive amount with a certain statement saying that I will not stop until prices decline. Something like we are going to dump 1 million barrels a day on the market for six months.
00:06:08:09 - 00:06:42:05
Anas
These statements are very important earlier statements. When you look at the Clinton years or the Bush years, they were very dull, like we have problem and we decided to release 30 million barrels and that's it. So they did it right. So that's the first thing. The second issue here is the impact was massive. Now, Biden did not drain the SBR because we still have about 345 million barrels, which is more than enough for any emergency.
00:06:42:05 - 00:07:03:27
Anas
We have no problem. So he did not renew it. And in fact, if you look at the history, especially for the last ten years from 2022, we so since 2012, what do you see? I even earlier if you go back to the nineties, Newt Gingrich and others, they wanted to close the Department of Energy and they wanted to sell the whole SPR.
00:07:04:21 - 00:07:48:11
Anas
If you look at Rick Perry, who was the governor of Texas, who was a presidential candidate and he became Trump's energy secretary, he wanted to close the department of Energy and sell all their SPR. And if you look at Trump, Trump in 2017 wanted to sell half of the SPR, which is more than what Biden sold. If you look at the last ten years from 2022, which is from 2012, there were many Republican and Democrat politicians who are saying the following You should look now we have this revolution, the shale revolution brought in massive amount of oil, brought in about 9 million barrels a day.
00:07:49:03 - 00:08:09:21
Anas
So multiply that by 365. You can see the amount that it brought in one year, which is multiples of what we have in December. So why we are holding the taxpayer money, why we are holding this SPR, especially the light switch group. I have massive amount underground. I am exporting 4 to 5 million barrels right now of light sweet crude.
00:08:09:27 - 00:08:33:26
Anas
Why? I have to keep light sweet crude. I don't need it. So there were calls since 2012 to reduce the size of the SVR, especially the light sweet crude, because I am producing an exporting massive amount of it. So it made perfect sense. So what happened with the buy it with Biden, with the Biden administration, is that it's really capitalized on all these things together.
00:08:34:21 - 00:08:55:20
Anas
And then they released that amount. Now, they lied about the cost when they said they focused on the idea that, look, we sold the oil at 95 and now we are buying it at 72, later at 79. And therefore, we saved the taxpayer money. Why they lied? Because they're in business. And that's not the way you do it.
00:08:55:20 - 00:09:16:11
Anas
You got to tell me the original cost, even when you do when you work with your stocks, you want to look for your basis. So what are the basis for the oil that's being sold at 95? I did the calculations. It's over $200, which means that every barrel of oil that the Biden administration sold, we lost money on.
00:09:17:12 - 00:09:44:17
Anas
But that's the financial accounting. If you look at the economic benefits worldwide, not only in the United States. Worldwide prices declined because of the SB R and because of other factors from 130 to 80. So we have $50 decline. Of course, not all of it to the SBIR, but there could be 20 to $25 due to the SBIR.
00:09:45:07 - 00:10:13:23
Anas
So you measure the impact of that on the US economy. You measure the impact of savings for people. You measure the impact of savings for the government, for the military, and for other nations. You find out that the the benefits, the economic benefits outweigh the financial losses that I talked about. At the same time, you look at the strategic value Biden with the SBIR, he saved Europe from Putin.
00:10:14:17 - 00:10:40:04
Anas
He kept the European Union united. What did the price of that? Otherwise, you would have seen U.S. Army somewhere in Europe right now and you see U.S. Army fighting. What did the price of that not happening show? The strategic value and the economic value of that release is sure, you adjust impact is priceless and outweigh any financial losses from that.
00:10:41:26 - 00:11:20:22
Anas
The problem is they couldn't manage the PR for that SBIR refill. They kept making statements that did not materialize. They kept saying contradictory statements. Refill, refill, refill, refill. Finally, they started refilling at a very high prices. I mean, and the idea and we mentioned this in some of our reports are that the only way the Biden administration was buying oil at 79, if they have guarantees from other nations that prices will not go below 79, which means that those prices that we saw today near 90.
00:11:21:06 - 00:11:44:28
Anas
The Biden administration knew about them three or four or five months ago. The other issue that when they are when they said that they are going to refill the SBIR, there was a kind of a gimmick accounting they were playing because they said by the end of the year, by the end of 2024, we would refill the SBA.
00:11:45:27 - 00:12:10:21
Anas
Of course, they are refilling 100,000 barrels a day and that's it. There is no way they can return 180 million. But what the gimmick accounting. The gimmick accounting basically is the Congress mandated the sale of certain amount every year of the SBA. So they canceled that. And the Biden administration is saying, well, look, we canceled that. You get to count that and the refill.
00:12:11:16 - 00:12:25:26
Anas
So and therefore, by the time of the elections, they can claim that they literally refilled that. So if you look at it on an Excel sheet, they did what a reality. It did not.
00:12:26:22 - 00:12:38:00
Marty
There's a to better understand the Congress released the amount or basically made it so you don't have to account for the amount that you're allowed to sell per year.
00:12:39:12 - 00:13:13:25
Anas
So that so the Congress mandated the sales, the Congress mandated the sales, and then they canceled it. And this cancellation. The Biden administration is claiming it as a credit. Okay. So that's one one part of the game. However, the issue that we discussed today in the Daily Energy report is the following. Now, they stopped. Now, this was predicted because if if prices go up in August and September, what they are going to do, they have to release oil from their SPR.
00:13:14:13 - 00:13:49:20
Anas
But technically they cannot fill and withdraw at the same time. So they have to stop refilling first and withdraw a second. So the question now is, are they going to withdraw again in August and September? Again, from our point of view, we wrote this in our report and months ago that they if prices go up and our threshold is this $4 gasoline for the national average, $4 gasoline translates to 90 WTI.
00:13:49:21 - 00:14:20:13
Anas
Of course, these are approximate numbers show $4 $90 WTI. If WTI goes 90 or above, then the Biden administration will withdraw oil from the SPR in August and September. Our estimate there will draw about 30 million barrels. And in today's report, basically we discuss the impact. There is a very limited impact to the decision not to refill and to the decision to release oil from their SPR.
00:14:21:03 - 00:14:30:27
Anas
When you talk about 30 million, even up to 60 million, the impact is very limited. But politically speaking, it makes sense to them. So that's the whole story.
00:14:33:09 - 00:14:57:04
Marty
Hmm. And this is in the mainstream narrative. So there's on the front end, it seems like they actually handled it okay from an even though they they sold the oil at a loss. But the net benefit for the U.S. economy, the global economy on the temporary cost savings was good. But now they find themselves in a pickle on the back end with the narrative around refilling it in the account.
00:14:57:04 - 00:14:57:10
Marty
Right.
00:14:57:17 - 00:15:19:22
Anas
I am surprised. I mean, that's why they messed up the PR really big time. The Biden administration has a big story to tell about the economic benefits and the strategic benefits. Big story why they ignored it. I have no idea why they did not talk about it. I have no idea. But the reality, they did keep Europe united.
00:15:20:00 - 00:15:30:07
Anas
They did not make those countries yield to a potential limit. And that's thanks to the sheer revolution on one side and thanks to the SBA release. On the other.
00:15:31:15 - 00:15:42:23
Marty
Well, another part of this, too, which makes this even more perplexing is the LNG exports, correct? Because that was a big factor in holding Europe over throughout the energy crisis.
00:15:43:11 - 00:16:13:11
Anas
I'm going to tell you another I would tell you and tell your audience another story, because I think this is another story missing from the mainstream media. In 2014, Putin annexed Crimea and the United States and Europe imposed sanctions on on Putin, which affected some of his gas exports. That was a problem. The Chinese approached him and said, let's build this pipeline and, you know, solve your problems, etc..
00:16:13:11 - 00:16:42:29
Anas
And and at the same time, they said, well, why you don't send some of all of your oil to Asia? And once the Russians have a taste of Asia, there was no way back. Whether on oil or gas. Now, Putin, through his intelligence services in the United States, realized that the sheer revolution is going to bring a lot of gas.
00:16:45:07 - 00:17:17:19
Anas
And he found out that there was a plan within the United States, let's call it the Deep state plan. And I'm talking about 2014 here to replace Russian gas in Europe with U.S. LNG. Remember all the plans that we are talking about now? They are sending that LNG to Europe. They got the approvals at that time. So he knew about the US plan to replace gas in Europe.
00:17:17:20 - 00:17:55:24
Anas
So what his reaction was, he improved his his relationship with Angela merkel in Germany. They quickly built that pipeline, which is Nord Stream two. They spent billions of dollars. They've I mean, they've done everything possible to secure their gas market in Europe. But we have enough evidence to show that the sheer revolution was unstoppable. The deep state in the United States with the shell revolution led to the increase in U.S. LNG exports.
00:17:56:22 - 00:18:24:19
Anas
And over time, what we've seen Trump all of a sudden becoming the chief marketer of U.S. LNG. Now we are talking about the head of the nation marketing and industrial whatever to use you. You go back to YouTube and watch every visit to of Trump, to Europe and every meeting with any European leader. He talked about LNG.
00:18:27:02 - 00:18:53:14
Anas
Now you have Biden coming to office, politically speaking. He's on the other side of the spectrum. He is again, fossil fuel is against oil. He's against gas. All of a sudden, he continued the role of Trump as being the chief marketer of LNG. Yeah. So both of them did exactly the same job. That tells you that the deep state basically is working here.
00:18:54:12 - 00:19:30:15
Anas
As a result, what happened? Putin underestimated the impact of the US will to replace Russian gas in Europe. Of course not totally, but U.S. exports to Europe were zero four years ago. Now almost 21% of gas imports in Europe coming from the United States. So what happened is, as a result of this, in 2006, when oil prices collapsed in 2015 and 2016, OPEC decided, I'm not going to do it alone.
00:19:31:03 - 00:20:07:05
Anas
Other non-OPEC members have to join, otherwise I'm going to crash the market and keep crashing it. Saudis increase their production. Iraqis increase their production. Iranians, because of the deal with Obama at that time, increased their production. So there was no way for countries like Kazakhstan or Azerbaijan or Russia except to join. And they formed Opec+ in 2016. Now they started meeting and they decided to cut production in every single meeting.
00:20:07:27 - 00:20:33:23
Anas
Russia wanted a smaller cut and in some cases they don't want to cut at all, period. They don't want to. And there was a clash between them and the Saudis. And as you recall, there was a price war in March 7th, the 2021. Because of that, because the Russians basically have a different view on prices in the market than the Saudis.
00:20:33:24 - 00:21:01:11
Anas
Why? Because their intelligence told them that most of the additional gas in the United States that's going to LNG terminals is Associated guys coming from oil fields. So if you raise oil prices, you end up with massive amount of gas and producers will dump that gas on the market at any price because they make their money from oil.
00:21:03:17 - 00:21:31:05
Anas
And therefore you can ship cheap gas to Europe and be competitive no matter what. So the only way to curb that gas from competing with the Russian gas in Europe and make Nord Stream two successful is to keep oil prices at 60 and prevent that growth in shale. So, yes, it was Russia who was fighting shale. It wasn't the Saudis.
00:21:31:05 - 00:21:54:19
Anas
It wasn't opaque. It was the Russians. And in fact, and I would say the statement and I know some people are going to get angry at me, if you look at some of the largest consulting agencies at a certain period of time, every person who was the head of gas or specializing in gas was Russian. I'm talking about American and European companies.
00:21:55:04 - 00:21:55:24
Marty
Interesting.
00:21:57:02 - 00:22:13:01
Anas
It is interesting because they really that's their game. They wanted to halt the expansion of oil production so they can lower the the production of associated guards. So LNG you want boomed the same way it did.
00:22:15:03 - 00:22:17:19
Marty
And so that let's fast forward to today.
00:22:17:23 - 00:22:31:21
Anas
So just one statement once they show the conflict. So one of the ironies is the conflict within OPEC plus between the Saudis and the Russians, although Opec+ is about oil, the cause of the conflict, the gas, not oil.
00:22:34:22 - 00:22:38:28
Marty
Can you ever really separate oil and gas? Were they always going to be interlinked because of.
00:22:38:28 - 00:23:01:05
Anas
The I mean, and again, of course, and this is why we have never we never have a dull moment in our field. And the reason why? Because you produce oil and gas together. So they are complements. But once you go to the market, in some cases they are substitutes, so they are complements on one side and substitutes on one side.
00:23:01:05 - 00:23:04:15
Anas
And now it's all of it is up.
00:23:06:20 - 00:23:13:07
Marty
And you have all these moving variables in different areas of production around the world with different incentives.
00:23:13:27 - 00:24:00:05
Anas
Speaking of moving a lot of moving variables, I would like to add one thing to your audience that is not in the main stream. Media or analysts do not talk about what we've seen since 2022 is that the level of competition among energy sources increased to levels that we never, ever seen before. I'm going to give you through examples, real life examples and 2021 in May 2021, all of a sudden the wind stopped in most parts of the UK to stop and they depend heavily on wind and as a result now they want to look for another source.
00:24:00:05 - 00:24:28:22
Anas
Otherwise they will have power outages. What did the other source was natural gas and natural gas prices increased to record high and power prices increased to a record high. That was the beginning of the energy crisis in Europe, even before the invasion of Ukraine. But what we have seen here is because the price of gas increased. Now, can other countries I wanted to get the LNG, LNG prices start increasing
00:24:29:15 - 00:24:54:18
Anas
Now, your move to 2022, what the issues with the Russian gas, etc., what we saw basically is massive increase in LNG prices. All of a sudden China and India found out they need to go back to coal because it's too expensive to buy the gas. We started with wind. Now we are going back to coal because LNG is very expensive.
00:24:56:03 - 00:25:31:05
Anas
So they ended up with coal. We ended up with another problem. All of a sudden we have a major drought, a major drought. That means hydro is going down. And because hydro is going down, that made the demand for natural gas and coal is going to increase. So this level of substitution between the various energy sources we never seen before, and this is something we've been studying only from 2022 and it is a very interesting phenomenon and we have too many variables, like you said, too many variables to make it more complex.
00:25:31:05 - 00:25:54:22
Anas
And this is again, we are talking about real life examples. We have a drought on one side. LNG prices are very high and China has no choice but to go for a kind of managed brownouts. Okay. My area basically has no power. I have a factory. I already have orders. And now after COVID, I have orders for the next three years.
00:25:54:27 - 00:26:20:04
Anas
I cannot even lose one hour. I am working 24 seven. I cannot even lose one hour of production. And now I have no power. What do you do? You resort to private generation. And what private generation uses diesel, diesel or some sort of LPG or others. And all of a sudden the demand for oil increased. So this level of substitution, a sophistication we never seen before.
00:26:21:19 - 00:26:43:12
Marty
Intuitively, you think that with a more hyper competitive market it would drive prices down. But it seems like you're getting at the idea that the fact that there's so much substitution possible, there can be overindex on one form of a substitute against another, which creates is massive pricing disconnections.
00:26:44:24 - 00:27:13:12
Anas
Absolutely. And we ended we end up with in fact, if you want to go into the details of this, it is again real life example. You have two industries, but both of them are serving Apple to make the iPhone. Okay. One of them got stuck with the very expensive LNG and the other one basically is buying the cheap coal and both of them basically supply the same the same supplier.
00:27:13:20 - 00:27:19:14
Anas
So the cost of one part basically is going up. The other cost of the cost of the other part is going down.
00:27:20:19 - 00:27:21:29
Marty
It sort of evens out.
00:27:23:06 - 00:27:30:09
Anas
Well, it depends, but I'm just kind of giving you one example on on the complexity of these issues. Mm hmm.
00:27:31:12 - 00:28:02:17
Marty
And this brings us back to LNG. If Putin had the wherewithal in 2014, 2016 to recognize that the shale revolution was going to lead to this massive market for LNG coming out of the U.S. to markets that had previously dominated. Why would the Biden administration, which seems hell bent on preventing Russia from succeeding in their efforts in Ukraine, shut down LNG production in the U.S.?
00:28:02:23 - 00:28:13:23
Marty
If it seems like it is a good mechanism to quote unquote weaken Russia economically by creating competition for the sale of LNG?
00:28:14:11 - 00:28:53:07
Anas
Well, that's what really happened. I mean, that's actually what they what they did, they just kept increasing LNG production and Russian gas became cheaper as a result of that. So that's happened. But let me add a kind of a futuristic view so the audience know what are the Putin plans, especially with his new term of presidency. Putin realized about two years ago, just on like few months after the invasion, that he put all all his eggs in one basket and he is depending heavily on China.
00:28:53:21 - 00:29:16:06
Anas
The Chinese basically are opportunistic to show. Okay, well, I want to take the cheap Russian guys and take the cheap Russian oil, etc.. Now they have those pipelines. They are building more pipelines. So the Russian realized that from an energy security point of view, from economic security point of view and from geostrategic point of view, they have to diversify exports.
00:29:17:19 - 00:29:52:24
Anas
And they studied the landscape, especially when the ban was imposed by the EU and by the U.S. on importing oil from Russia and then another ban on importing products from Russia. By the way, Russian oil still reaches the United States and Europe even today in one way or the other. I'll explain that later. But the idea here is he wanted to find new markets and they literally shipped were shopping around the world for markets.
00:29:52:26 - 00:30:17:26
Anas
And they learned very important lessons. As a result, they ended up with two conclusions. The first conclusion is selling crude oil is not a good idea. And the reason why? Because most of your new customers are needy customers. There are poorer countries in Africa and Latin America and Asia, and they are many of them. They can solve your problem, but they don't have refineries.
00:30:18:25 - 00:30:42:07
Anas
So what they are going to do with the crude, So you are limited in your sales because many of those countries will are willing to do the political sacrifice and buy from you. They don't have refineries and therefore, their view right now is I'm going to build more refineries than ever so I can ship products because the final consumer is going to take the final product and I can ship it anywhere.
00:30:44:01 - 00:31:15:10
Anas
So now Ukraine is hitting refineries because this is a strategic choice for Russia. So you are not hitting refineries. You are hitting a strategic decision, a strategic policy. That's number one. Number two, they knew that they have a serious problem with their gas, that they have a lot of guys. They don't want to depend only on China, because if you end up with a recession in China, Russia is toast.
00:31:16:01 - 00:31:46:29
Anas
If they end up with a political disagreement, Russia is toast. So they want to ship that gas on the ground. The only way you can use pipelines either west or east. That's it. That's the word for Russia. East to China, west to Europe. Europe is almost closed almost because even today, even today, Ukraine still uses Russian gas. And for those who are interested in the numbers, we have all the numbers on on our sub stock.
00:31:47:25 - 00:32:21:20
Anas
And even today, Russian gas is shipped through Ukraine to Europe. And even today, Russians are getting paid by Europeans for their gas. So you talk about sanctions. Don't know. Not to brag about it much. Anyway, the the the idea here is the only way you can sell your gas around the world is through liquefying that gas. And therefore you want to build more liquefaction plants.
00:32:22:01 - 00:32:50:25
Anas
So you can ship this gas anywhere in the world. And this way you can diversify your exports. The Biden administration realized that this is a very important strategic decision for Russia, and therefore they are doing their best now to block any company from helping the Russians build their Arctic LNG to. So don't think about it. Just like, okay, well, I am a politician, I just want to do sanction.
00:32:50:26 - 00:33:07:18
Anas
No, there are deeper issues than that. This is a strategic decision by Biden to diversify and it is a strategic move, a decision by the Biden administration. No, I am going to kill your strategic options. It.
00:33:09:16 - 00:33:10:21
Marty
So is the time.
00:33:12:09 - 00:33:47:21
Anas
Okay. At the same time, there is a fear because sending this LNG to Europe and controlling about 20 20% of European market. This is engraved in stone. This is not something temporary. This is for the next few decades. And it has implications. One of the implications is what if the war in Ukraine and tomorrow and sanctions on Russia ends in a year or just countries ignore the sanctions, then Russian LNG will compete with the U.S. LNG because cheaper.
00:33:49:16 - 00:34:12:03
Anas
So the US by blocking Arctic LNG too, and any efforts by the Russians to build more LNG plans guarantees two things. First of all, they had their strategic decision to diversify. On the other side, they guarantee their market for the future. The US market for the future in Europe because they don't want the Russian gas to compete with it.
00:34:14:05 - 00:34:16:02
Anas
And that's another impact.
00:34:17:17 - 00:34:26:18
Marty
How does that prevent the Russians from spinning up LNG facilities? Would they have the leverage American companies to actually build this or.
00:34:26:18 - 00:35:04:16
Anas
Well, it could be it could be any company, especially the big companies. You have the construction companies on one side and you need the major oil companies on the other, like French Total and ENI and others. You want to guarantee a market for it to finance it. Probably they need to work that out, too. So there are several issues related to it by by the Biden administration imposing several layers of sanctions that can influence the decision of foreign companies through those multilayered sanctions, not to invest in the in the new LNG plans.
00:35:05:10 - 00:35:12:18
Marty
Interesting. So what's Russia's move now? Do they have to find solace in OPEC plus and attempt to.
00:35:12:28 - 00:35:34:24
Anas
No, not really. I think the the Russians options are very clear, at least to me, that they will go for refinery diversification no matter what, despite the attacks by Ukraine. By the way, there are certain media outlets without naming names, they are exaggerating the impact of the attacks on the refineries. They are exaggerating big time. Why do you say that?
00:35:36:06 - 00:36:02:27
Anas
We have enough evidence to show it, basically. And we discuss those in our reports, daily reports. For example, we're going to give you some examples. Certain outlets basically will say, look, Russian center drawn to this refinery. Well, a refinery, sometimes a refinery could be like a 60, 70 acre. Okay. And they hit one unit in that refinery. But still, it is an attack and that unit could be even idle.
00:36:03:23 - 00:36:32:16
Anas
So what the outlet, the news outlet would say like a refinery was attacked and it export this and this and this and this. And their capacity is 360,000 barrels a day. What what's affected basically is just a unit that that produces only 10,000. But they never say that. They tell you about the total capacity and the level of utilization of Russia refineries is low relative to the U.S. So no one knows whether they are in maintenance.
00:36:32:16 - 00:37:08:25
Anas
They are operational there. We don't know the true impact. But what we know is we get the export numbers on databases and on a weekly basis, and we can tell from the export numbers that those media outlets are exaggerating the impact of the attacks. At the same time, they are ignoring one fact. If the Russian refinery are hit and they really cannot process crude, yes, their export their exports well, their exports of products like diesel and others will decline.
00:37:09:24 - 00:37:42:09
Anas
But since they cannot, Russia's the crude now their crude exports will increase. So that's why you see the Russians playing a very nasty game with Opec+, because what they did is they went to the meeting and all the agreements within topic itself since 1982, all the agreements are on production. Then Opec+ came in 2016. All the agreements were on production when the Russian refinery started being hit.
00:37:43:23 - 00:37:48:18
Anas
The Russian has changed the game and said, I want to cut from exports, not from production.
00:37:53:01 - 00:37:54:10
Anas
And they started playing that game.
00:37:58:09 - 00:38:38:23
Marty
So what does this what's your perspective on how OPEC plus views Russia in all this? Really annoyed that they're engaged in this war and creating all these externalities within the oil and gas market? Because that's one of the big themes is particularly on the monetary side after the freezing of the Russian treasury assets. The one of the narratives that OPEC plus the BRICS countries predominantly are getting together and saying, hey, we need to we need to separate ourselves from this monetary system and make sure that we have our financial assets in things that we actually control.
00:38:39:06 - 00:38:48:22
Marty
And part of that narrative is that they're going along with Russia, and Russia is like a part of these discussions and a pivotal part of them. At the very least, this is nothing else.
00:38:49:13 - 00:39:21:26
Anas
There are two points here. The first point is Russia since 2016. Russia never, ever delivered voluntarily on the cuts. They did not. And whenever they cut simply because they have maintenance or they have problems, but without that, they they never voluntarily, like Saudi Arabia, Kuwait or UAE, voluntarily cut production. They never did. Okay. So you you start asking the question then what the Saudis want from Russia, what OPEC wants from Russia.
00:39:23:00 - 00:39:53:20
Anas
We can't we can't guess. And I'm going to give you a couple of benefits. It's not only about oil. There are more than oil into the equation. But example, as you know, since the George W Bush years, we have this proposal in the Congress to show OPIC. It's called No. An opaque or not opaque, which means that they want to use the Sherman Act, which is only to the companies within the borders of the United States.
00:39:53:29 - 00:40:15:28
Anas
They want to extend that globally and show OPIC and OPIC members based on it, but they need the approval of the Congress. And once they get the approval of the Congress and the Senate, then the president of the United States has to sign it. George Bush. George W Bush ignored it. Obama ignored it during the Trump administration. And it wasn't even process because of the pressure from Trump.
00:40:16:06 - 00:40:52:17
Anas
Although Trump in his book in 2011 supported it anyway. The idea here is if you bring in Russia, Putin, and all the other countries whom you are going to shoot now. Okay. Yes, the other countries are probably weaker than Russia, etc., but now are you going to show Putin and your escorts, good luck. So that's number one. Number two, if you look at what Russia did in the Security Council's, because we have the five permanent members of the Security Council and Russia is one of them, Look at the benefits to the two OPEC members from it.
00:40:53:09 - 00:41:22:25
Anas
First, we have the issues related to the war in Yemen and there was a proposal. If it passed, it would have been a disaster for Saudi Arabia and the UAE and other members of the Council and the Gulf Cooperation Council who vetoed that. Russia. So what did the price of that? Because that would have criminalized those countries. The second one, there was a vote on climate change and Russia vetoed that.
00:41:22:26 - 00:41:47:20
Anas
What did the price of that? So there are other benefits to cooperating with Russia. It's not only about oil and whether they comply or not. So there are these these benefits. Now, we are finding out there are more into it. Now, the Saudis, the Algerians, all of them are OPEC's members. The Iraqis, they want nuclear they want nuclear power plants.
00:41:48:09 - 00:42:16:10
Anas
They know there is no way on earth the U.S. Congress would grant any Arab country, any Arab country, American technology. I'm talking about the nuclear technology. Even the UAE, when they built it, they built it through a South Korean company, not an American company. So they know this is not going to happen. South Korea does not have the political muscle basically to help them, but Russia does.
00:42:16:24 - 00:42:37:29
Anas
So what you see right now is you see Egypt is building a nuclear plant by the Russians. Turkey is building nuclear plants by the Russians. They are going to start there. There is, I think, next month. And Algeria now is preparing the legal framework to start building nuclear plants and the Russians are going to build it. So there are other benefits.
00:42:37:29 - 00:42:38:29
Anas
It's not only about oil.
00:42:40:03 - 00:42:48:13
Marty
The Russians are really have a great track record of building maintaining nuclear power plants. Absolutely better since Chernobyl.
00:42:49:04 - 00:42:53:13
Anas
Well, it depends on how you look at Chernobyl, because some people will tell you it's Ukrainian.
00:42:55:01 - 00:43:19:19
Marty
Yeah, that's a good point. Well, and you mentioned Yemen earlier, too. That's a whole another aspect. We haven't even touched on yet, which is what's happening in the Red Sea with the Houthi rebels and how that plays into this overarching conversation. We've been having. It's seems to be a pretty big event that was highly focused on over Christmas and the first month of this year.
00:43:19:19 - 00:43:34:07
Marty
But it seems to have been brushed under the rug of the mainstream media, but it still is going on in areas I believe the Houthi rebels told China and Russia specifically that their ships going through the Suez Canal would would not be attacked.
00:43:35:14 - 00:43:57:12
Anas
Since day one, we published few reports and we had several podcasts with top experts in the world on the Red Sea and the Houthis. For those who are interested. Those are available free on our substack and you can listen to them and watch them. The issue is like what the media is talking about, the Houthis attacks on ships, shipping industry, etc..
00:43:57:19 - 00:44:13:26
Anas
Look, the hostages are a subgroup of a subgroup of a minority. So to tell me the U.S. and the U.K. cannot control that group does not make sense to tell me that Iran can't control it. But the U.S. and the U.K. cannot control it does not make sense.
00:44:15:27 - 00:44:48:07
Anas
So I'm going to tell you a third story today from A to Z, since the sanction has been imposed on Russia because of its invasion of Ukraine, the importance of the Red Sea increased substantially to the extent that it became the hottest area on Earth. And this is even before the the Gaza war, before the Houthi attacks. So what happened?
00:44:49:10 - 00:45:19:03
Anas
We have several issues here. You have the climate change policies. On one side and you have the Russian sanctions on the other. So look what happened. First, The Russians used to export to Asia about 250,000 barrels a day through the Red Sea. So that will come out of the Turkish straits, the across the Mediterranean, through the Suez Canal, go south and Richy Baban, Mandeb, and then from there to Asia, all 250.
00:45:19:21 - 00:45:52:21
Anas
After the sanctions, it increased to an average of 1.7 million barrels a day. So, okay, so the number of oil tankers going through increased substantially and they are Russia's. Now, Europe does not have enough oil. So now the Gulf countries need to send oil to Europe instead of Asia. So they have to reroute, too. So we have more oil tankers going north in the Red Sea through the Suez Canal than before.
00:45:54:27 - 00:46:21:12
Anas
As a result, in 2023, we have the largest number of number of tankers passing through the Suez Canal, and the canal generated the biggest revenues in its history as a result of these things. But this it's not only about oil. We have LNG to show. Qatar, for example, started sending LNG to Europe instead of Asia. So increased traffic again.
00:46:21:24 - 00:46:55:26
Anas
But that's not the only story during this period. We talked earlier about U.S. LNG. We for the U.S., as you know, oil production increased and exports reached a record high in 2023. That oil and that LNG was going through the Red Sea to at the same time that green transition. China needed all those minerals and metals from Africa, Latin America, other countries, a large portion of it was going through the region.
00:46:57:03 - 00:47:35:01
Anas
Now they are exporting the solar panels, everything needed for wind power, and they are exporting the the batteries and electric vehicles, especially to Europe. That's through the ship. So the old energy and the new energy is going through the show. The importance of the Red Sea is historic and it became the hottest area in the world. It has everything and it it has Russia, It has China, and it has everything you need from the old energy, everything you need for the new energy.
00:47:36:14 - 00:48:00:10
Anas
What that means is you need to go back to the old ways to control the rich. I'm not talking about conspiracy here. This is what the history of nations throughout history is, to control the waterways. So this is not a conspiracy? Well, you don't want to go to the Suez Canal because it is owned by Egypt and you don't want to go and fight with Egypt.
00:48:00:17 - 00:48:24:10
Anas
You don't want to kind of infringe on the sovereignty of other country. So you don't want that. At the same time, you don't want to be near Somalia and and Yemen because of all that history. Remember the Black Hawk thing in Somalia and the hoses and all the troubles, etc.? You don't have to mess with that. What you can do is control what's in between, which is the red tape.
00:48:27:06 - 00:48:51:17
Anas
And there are other efforts, circumstantial evidence to support this point. Saudi Arabia refused. Egypt refused to participate. So we are and the U.K. basically withdrew most of its ships anyway. So we are left to the United States. But the United States wants to be there. This is the hottest area in the world. You can control China, you can control Russia, you can control the Arab world.
00:48:51:17 - 00:49:16:07
Anas
You can control everything by controlling the Red Sea right now. And you can control the energy transition on one side and you can control the flow of LNG and oil on the other. The fleet that went to the Red Sea want to stop the Houthis, but that was what, months ago, three months ago. And the number of ships that are going through there is declining by the day.
00:49:16:07 - 00:49:43:02
Anas
And we have only some some tankers from Russia and Saudi Arabia and that's it. But that was not the objective. I forgot to mention one point that made the ROCE hotter than ever. As you know, we had a drought in the Panama Canal and and shippers were not able to go through it. That diverted some shipments to the Suez Canal to through the Red Sea.
00:49:46:06 - 00:49:58:06
Anas
So if you look at it any way you look at it, the Red Sea was the hottest area. And that deep state that I mentioned earlier probably thought that need to be controlled. And that's why they are there.
00:50:01:17 - 00:50:17:12
Marty
So with that in mind, what is the ultimate goal thinking, deep state, long term thinking. So now the people can't go through the Suez Canal. They're forced to go around the Horn of Africa. Like so.
00:50:18:06 - 00:50:54:02
Anas
Well, everything we see, everything we see today is temporary. This is oil. Everything we see today is short run. Okay. The plan is for decades. So this is not don't focus only on the short run and the Houthi attacks on the houses are temporary phenomenon. The war in Gaza is temporary, and everything you see today is temporary. The idea here is we are looking at the next few decades and looking at trade wars, looking at I mean, back to your ideas about currencies and everything else, which is the other point.
00:50:54:10 - 00:51:16:14
Anas
During the same time this is happening. Look what happened to the dollar. The dollar went through the roof. Okay. Look at the transactions in Swift. The the the gains to the dollar and the swift transfers just went through the roof. In a sense, the the empire is is defending its dollar. It's not going to let it go, just like some people thought.
00:51:16:21 - 00:51:41:09
Anas
Okay, you know, there is competition and the Chinese will do this and the Russians will do that. No, the Empire will defend the dollar. And what we are saying, if you go throughout history, you will see that the currency of empires decline with the decline of the empire, and they vanished when that empire vanishes. But until that empire is weakened, don't expect that currency to decline.
00:51:46:00 - 00:51:52:08
Marty
So do you think Jerome Powell, in his reluctance to to lower rates as part of this as well?
00:51:53:21 - 00:52:17:08
Anas
I don't know. I mean, this is something really I don't know about. But the idea of having or protecting the dollar from the empire, I mean, there is enough support for it. The idea that they are going to let China or Russia do something to it, I think they will let them maneuver within kind of limits and and that's it.
00:52:17:21 - 00:52:47:17
Anas
But I think that is a big misconception, as we discussed on a previous show about the the loss, the market share, loss of the dollar and the international trade. We have to kind of study the landscape to find out the following that countries that want to get rid of the dollar are all sanctioned countries to prove that the dollar is losing ground.
00:52:47:23 - 00:53:06:02
Anas
You need a country that is not sanctioned with good relationships with the United States and other countries and telling the world, look, the dollar is not a good choice and I'm going to move away from the dollar. You want someone with a free will to do it, not someone who sanction sanctioned and tell them I am not going to trade with you.
00:53:06:22 - 00:53:30:11
Anas
Well, he's not going to trade with you and therefore, he does not need your dollar anyway. He need your dollar because he is trading with you. So this is not a free will. So the argument that the dollar was losing ground, we need free world countries deciding on their own that I don't need the dollar. We don't have that evidence.
00:53:30:22 - 00:53:31:22
Anas
And such a.
00:53:34:22 - 00:53:45:16
Marty
Yeah, it's extremely chaotic. How much does the election playing into all of this? Well, a temporary thing mentioned.
00:53:45:17 - 00:54:10:11
Anas
I don't think the dollar issue is related to the elections at all. I think the other issues, if you look, for example, if you look at the what's happening in Venezuela, the Biden administration made a deal with Maduro that they will lift some of the sanctions, allow foreign companies to go and invest in Venezuela, increase Venezuela's oil production on the condition that it will meet certain conditions for the elections.
00:54:11:17 - 00:54:39:02
Anas
Of course, a side point here. The U.S. believe that we should not interfere in democracies, but the U.S. is deliberately interfering directly in the Venezuelan elections. Anyway, the we knew from the beginning that Maduro is not going to abide by this condition. Now, the Biden administration is threatening that they would impose sanctions. But as we said in our report, don't count on oil to be included in the sanctions.
00:54:40:05 - 00:55:14:08
Anas
Oil will continue to flow. The Biden administration will allow Venezuela to expand its production the same way it did. The same with Iran, by the way. And one of the things since we talked about this should are people have to realize that there was there is enough circumstantial evidence to show that there was kind of a coordination between the Biden administration and the Iranian regime on releasing the SVR because they allowed them to release their floating floating reserves or floating storage.
00:55:14:23 - 00:55:43:00
Anas
At the same time of the release of the SVR, they started together. They ended together. They released about 80 million barrels at the same time. So the Biden administration is not going to embargo or sanction the oil, whether in Iran or Venezuela. One of the reasons why, because they don't want high oil prices before the elections. So probably the dollar has nothing to do with it, but oil has something to do with it.
00:55:43:19 - 00:56:09:23
Anas
And one of the reasons why they are emphasizing Venezuela, because the Canadians are going to start exporting oil from the West through the Trans Mountain pipeline very soon. And that's going to divert some shipments from the United States to other places. We don't know yet, but it is very clear to us at least that that most of that oil will end up in California anyway.
00:56:09:28 - 00:56:31:27
Anas
Some of it might go to Asia. But whatever the perception is from the Biden administration and probably some lobbyist that the Gulf region and talking about the Gulf of Mexico region and the refineries and the Gulf of Mexico that receive the Canadian oil, probably they will have less Canadian oil and they need replacement. And the replacement has to be the same quality.
00:56:32:04 - 00:56:46:21
Anas
And that quality does not come from Saudi Arabia. That quality does not come from other countries. That quality comes from Israel. So by focusing on Venezuela, they are compensating for the possibility of losing some of the oil from Canada.
00:56:50:19 - 00:57:00:23
Marty
And from what I understand to Venezuela's oil and gas infrastructure probably needs a revamp due to how deprecated became postmodernity, Correct.
00:57:01:03 - 00:57:24:21
Anas
So the idea of returning two 3 million barrels is not there. We need years and we need massive amount of money to be able to do that. Our estimate basically above the current levels, they can really manage to add another 300,000 barrels a day and that's it. But those 300,000 of a certain quality, they are very important for the refineries on the Gulf Coast.
00:57:25:19 - 00:57:42:21
Marty
Mm hmm. And we were talking about this before we started recording, and you were tweeting about it at the end of the last week. What's going on in Guyana with their reserves off their coasts? And what's the timeline in terms of those actually being tapped into and delivered?
00:57:42:21 - 00:57:50:06
Anas
Speaking of Guyana President Mohammad Ali Raffone basically had this interview that went viral.
00:57:51:05 - 00:57:55:21
Marty
He went viral, millions of views. You got millions of impressions on there, correct? Right.
00:57:56:15 - 00:58:31:22
Anas
Simply because he really kind of, you know, stopped them. He literally told them to stop there and they took over and that that went viral. We have two issues with Venezuela right now. We have the threat sorry, with Guyana, we have the threat of Venezuela taking most of Guyana because they claimed that that that's part of Venezuela. The problem here we have is whatever Maduro is talking about and you look at the statement, there are identical statement as to what Saddam Hussein was saying about Kuwait.
00:58:32:16 - 00:58:54:13
Anas
Exactly. And The issue here is where when you go back in history, where do you stop? I mean, that applied to many countries around the world, including Israel and Palestine. Where do you stop in history? Where do you go back? Where do you start? So for from Maduro point of view, they literally cherry pick certain data and say, well, this land is ours.
00:58:54:18 - 00:58:57:21
Anas
Well, if they go back, probably the whole Venezuela will be part of Colombia.
00:59:00:21 - 00:59:37:00
Anas
So we have this issue with Guyana, which is the threat of Venezuela to Guyana. On the other one, we have the problems between Chevron and Nixon because Chevron bought a Hess. Hess is a partner of Exxon, and Exxon did not like it. And now they are going to go back to court and all these things because exon thought they have the first option to buy and has did not do it and therefore they have priority over over Chevron for us.
00:59:37:00 - 01:00:03:26
Anas
We published a couple of reports on this for us. Basically, we believe that the purchase of Exxon of Pioneer was a mistake and we said this from the first moment they announced it or the rumors basically came out that this is a mistake. And it is very clear now from the evidence that Exxon probably regret buying Pioneer, they should have bought it instead.
01:00:04:10 - 01:00:40:01
Anas
So Guyana now has to those two problems, but if everything goes as planned, their production will more than double by 2030 and they will become a very important country. Back to that interview, the BBC interview with the president, Hamad Ali. One of the ironies is that the guy is from from the UK and one of the things that saved Europe from Putin was the massive exports from Guyana to Europe.
01:00:41:04 - 01:01:00:29
Anas
They export like 350,000 barrels a day to Europe. So they saved them. They literally saved them. And the guy was telling him, oh, you guys, you know, you produce CO2, etc., which is a joke because you produce CO2 when you burn the fuel in the consuming country, you don't burn it as a producer.
01:01:04:15 - 01:01:35:14
Marty
You're paying to burn it. UK and yeah, it was an incredible two minute clip to see because it was the hypocrisy of not only the UK but the West more generally in terms of carbon emissions and the attempt to prevent smaller upstart countries like Guyana pull themselves up from their bootstraps and leverage their natural resources to put their economies in better places is insane.
01:01:35:15 - 01:01:47:11
Marty
It's like, Hey, we got here with all this hydrocarbons and yes, we like the society we live in today. But no, you can't. You can't get on par with us. It's really hypocritical.
01:01:48:06 - 01:01:49:19
Anas
Absolutely. Absolutely
01:01:50:12 - 01:02:04:07
Marty
I do worry, though, I do have one worry. It seemed like President Ali was positioning Guyana to be a large exporter of carbon credits with that massive rainforest. Are you worried about that at all?
01:02:04:26 - 01:02:30:01
Anas
Well, I am. Okay. They already sell the already. What do they do? Okay, so everyone is playing the game. Although my statement about it is that carbon accounting is the mother of all Enrons. It is the largest scam in history. But, hey, if you can make money out of it, take advantage of it.
01:02:30:23 - 01:02:51:05
Marty
Yeah. Yeah. The scam is playing in the incentives that you're given. That's what we talk about a lot in the Bitcoin mining industry, because particularly if you're doing like flare gas mitigation tackle, you could sell carbon credits and there's a lot of purists or like I don't even enable that system, but there's another camp, it's like, well, they're going to give you the money.
01:02:51:05 - 01:02:51:29
Marty
You should take it also.
01:02:52:06 - 01:02:55:03
Anas
Absolutely. Absolutely. Yeah, absolutely.
01:02:56:01 - 01:03:07:18
Marty
The the last thing we have to touch on, you mentioned it before, narrative battles in the mainstream media pertaining to two big elections that are happening this year. What's what's going on?
01:03:08:14 - 01:03:34:23
Anas
Well, we have elections and India and we have elections in the United States. And there are a couple of many big media. Mainstream media basically are writing story after story, sometimes like two or three stories a day using using true data. I mean, the data is correct, but they are running away with it, producing a completely complete misconception to serve those two governments.
01:03:36:20 - 01:04:11:26
Anas
So all the stories about India not buying from Russia are fake. All the stories about India diversifying its oil imports are not correct. The story is that the sanctions are working, are not correct. The stories really the most disturbing stories, are about the price gap. Every time any time you say you share a story that said, because of the price cap council, that short because literally the price cap has no impact, period.
01:04:11:27 - 01:04:41:20
Anas
It's a lie and it's being promoted time after time after time. And the challenge, anyone is prove it. You have to prove it on two levels. You have to prove theoretically in theory, that there is some justification in theory. And then practically through the date Russian oil being sold above the price cap for months and months. And in fact, even Secretary Blinken, when he went to India and someone accused India of buying Russian oil above the cap.
01:04:41:23 - 01:05:13:08
Anas
Secretary Blinken went public saying, no, they are not. In a sense, he is defending them and he's giving them a green light to continue importing from Russia. Although the price was $10 above the cap. So there are multiple stories out there. And one of them, of course, we mentioned earlier the attack on the Russian refineries and the impact that was exaggerated until today.
01:05:14:07 - 01:05:44:29
Anas
European countries and the United States are importing Russian oil in one way or the other. And the reason why, especially for the EU, when they drafted the sanctions, this is in the draft. So this is written, it says that countries can Russian oil if it went through a transformation. What that transformation means is refining, which means that you India, go buy that oil, refine it for me, send it to me and I am fine.
01:05:45:20 - 01:06:10:04
Anas
I'm kosher. Detroit, I'm fine. And that's how that oil basically is coming to Europe, coming through there. And I say we have all the data in our report every few days. Basically, we publish data on this. Which country imported this, which country imported this. And and they they literally being buying from China and some Arab countries and from India, literally.
01:06:10:20 - 01:06:29:15
Anas
And that sense Russia unwashed oil it's oil washing and now we have several stories out of Libya to come coming that you know kind of some mafia operations etc.. So there are all kind of games being played, but that oil is flowing to Europe and flowing to the United States.
01:06:33:03 - 01:06:36:01
Marty
Shocker. You can't trust the mainstream media, what they're saying.
01:06:37:14 - 01:07:00:11
Anas
Well, one of the one of the issues related to that Russian scam and how they operate this, that Turkey is playing a very important role in this. And all you got to do basically just mislabel just mislabeled that oil in one way or the other. Now, every oil has a DNA, which means that if you want to run an investigation, you can prove that this is Russian oil.
01:07:01:01 - 01:07:22:15
Anas
But the fact that none of the governments are doing it, that means they are they want that oil, they want low prices, and they want the Russian oil to flow. In fact, that's why we say all the time in our report that the price cap, the most important impact of the price cap is to legalize buying Russian oil.
01:07:24:12 - 01:08:10:16
Marty
Willful ignorance turned a blind eye. Let's say it. So with all this in mind, everything we've covered from shale revolution starting in 2014 state of LNG, Russia's involvement in OPEC, plus trying to make sure that they can sell their their gas. What's going on in the Red Sea? What's happening in South America or what is your perspective on the next six months, 18 months in the oil and gas markets as we head into election season here in the U.S. and India, other parts of the world, as the debt situation spirals out of control, as this conflict in the conflict, this war.
01:08:10:22 - 01:08:11:10
Anas
Today.
01:08:11:19 - 01:08:12:28
Marty
In Ukraine continues.
01:08:14:22 - 01:08:44:01
Anas
Today, prices Brant prices approached almost $90. Some of that increase, basically, if not all of it, is really a political premium. And it is a political premium because Israel attacked the Iranian embassy in Damascus and killed seven people from the Cooks brigade, which is like the best of the best of the Revolutionary Guard of Iran, including two leaders.
01:08:45:10 - 01:09:16:25
Anas
And it is very clear that the Biden administration was panicking. Immediately, they sent a message to Iran. They said, we have nothing to do with it. These are the Israelis. We literally did not participate. We know nothing about it. Why? Because we are coming into elections. And if the Iranians are going to retaliate, retaliate in several ways, two of them are to literally confiscate board some tankers, as they did before and confiscate some tankers in the strait and affect shipping.
01:09:16:25 - 01:09:46:27
Anas
There, which goes to Asia, which make the situation even worse, because now we have the shipments going to Europe and now on the other side going to Asia, which is another problem. And then they can literally kind of wink at the Houthis and tell them to increase their attacks in there and other places, which means that prices will go through the roof, LNG prices will go through the roof, and that will create problems for the Biden administration, especially when it comes to oil and gasoline prices.
01:09:47:18 - 01:10:08:23
Anas
So the market basically received that message. It was very clear that the Iranians are very angry be they will retaliate. We don't know how they are going to retaliate, but that retaliation might affect the oil market. So the increase today is really a geopolitical increase. The way we view it today, Of course, things could change tomorrow. So we change.
01:10:08:23 - 01:10:36:22
Anas
Our view is based on the realities of the market, but based on what we see today, there is no reason for $100 to yet. In 2024, the market is getting tighter. The decision by OPIC, GMC, OPIC, plus GMC not to do anything is has does not mean that OPIC is going to do nothing because the voluntary cuts are made.
01:10:36:22 - 01:11:03:04
Anas
And I hope the audience will pay attention to this because this is very important. The voluntary cuts are made by the individual countries and the announcements are made, the individual countries, not by OPIC or OPEC+. And therefore the meeting today has no relevance to it, which means that Saudi Arabia and Russia can literally come out tomorrow or after tomorrow and say, Well, I'm going to increase my production by 200,000.
01:11:04:25 - 01:11:28:23
Anas
And there is no contradiction between the two at the same time. And people get tired of me repeating this. The Chinese are going to use their SVR and they are going to use their inventories, as they've been doing in recent months. They are going to flood the market with them to prevent prices from going to 100. They've been doing it for years.
01:11:29:21 - 01:11:51:01
Anas
And the only reason why in 2021 we did not get to 100 was because they released massive amount of oil from their SVR and inventories. So the market is relatively tight. Rangebound probably in the eighties. But we will see how things are going to evolve between now and the elections.
01:11:53:03 - 01:11:56:18
Marty
Compared to the US. SVR How big is the Chinese SVR?
01:11:57:23 - 01:12:23:28
Anas
The Chinese SVR, And okay, this is a very important distinction here in the United States. The SVR, the Strategic Petroleum Reserve, is literally owned by the federal government and one day by the money comes from the federal government. And over the shale, the money goes to the federal government. And then we have the commercial inventories, which is the private sector in China.
01:12:24:17 - 01:13:06:19
Anas
We do have the FBI. It is about 350 million barrels, which is almost kind of close to what the SVR today, almost the same size. But this is not the issue. The issue is the largest holders of the commercial reserves are all owned by the Chinese government. So the definition of strategic petroleum reserve becomes murky here because if everything owned by the government, the government can do various things as a strategic, strategic decisions about them, but still classified as commercial, but they are owned by the government.
01:13:07:29 - 01:13:33:17
Anas
We have what we call the Teapot refinery, which is the private sector. They own some reserves, but who is in China is going to say no to the government. So in a sense, from our point of view, all the reserves in China, which is almost 950 million barrels, all of them are strategic, all of them.
01:13:35:14 - 01:14:12:27
Marty
Deep, deep reserves, they can tap if need be. Yes, fascinating nuts. Always learn so much in my worldview. I think you're probably the guest that challenges my worldview, particularly as it pertains to what's happening in the geopolitical landscape in the world of oil and gas every time you come on. Thank you. Had a lot of assumptions in my mind around the draining of the Strategic Petroleum Reserve here in the US, the administration's stance towards LNG production.
01:14:12:27 - 01:14:20:23
Marty
And I've got more things to think about completely has me questioning my priors, which I appreciate.
01:14:21:04 - 01:14:22:19
Anas
Thank you. Pleasure. Pleasure.
01:14:23:19 - 01:14:31:01
Marty
And congrats again. Supervisor on X over the weekend. I think I the last time I checked, you had like 1010 million impressions on that.
01:14:31:22 - 01:14:35:02
Anas
Yes, yes, yes, yes. It did go viral. Mm hmm.
01:14:35:20 - 01:14:44:25
Marty
Where where can anybody who's seeing you on the show for the first time and isn't aware where they can find your substack? Where can they find out more information about you?
01:14:45:07 - 01:15:17:27
Anas
Of course, the best the best way and the easiest way basically is go to Twitter, which is my name and Alhaji and S Al JJ and the in the bio there are the two links. We have a newsletter and we have the daily Energy report. They are two different subscriptions in this case. And at the same time I do a lot of speaking engagements for those who are looking for speakers, for their boards or for their annual events or whatever, and I'll be happy, be your speaker and us.
01:15:17:28 - 01:15:26:27
Marty
Thank you. We will link to all that in the show notes as well. As always, it's been a pleasure. Can't wait to do it at some point. Thank you. Later This year, probably probably around election season.
01:15:28:22 - 01:15:29:09
Anas
Have a great day.
01:15:30:00 - 01:15:31:05
Marty
Peace, love freaks. Okay.
