The S**t Hits The Fan In July, 2022

Updates

May 3, 2022: this appeared just after I posted the note below. 

Original Post 

I'll bet fewer than one percent of Americans are aware of what's really going on with energy in this country. I even think a lot of folks "in" fossil fuel are oblivious to what's going on. I've talked about this often. 

Just months ago "we" had three major sources for oil: the Mideast (OPEC), the US, and Russia. 

You know, I'm beginning to think that when I talk about US oil, I'm going to start including global production outside of Alaska and the continental US and include oil overseas that is being produced by US companies, like XOM

Now, it's quickly becoming OPEC and the US. 

Russia is not only becoming irrelevant, it's become a pariah on the global stage. 

Remember how they used to talk about "stranded assets" in the US due to "green energy" politics. That's nothing compared to the stranded assets we're about to see in Russia. I find this simply fascinating. No one talks much about storage but that's going to be next energy story.

Sure, Russian oil is really cheap and China can think about buying all they want, but at some point they run out of storage. Once China runs out of storage, it won't be long before Russia runs out of storage, and they have to start shutting in wells. They will certainly quit drilling before they start shutting in wells. And shutting in a well runs the risk of losing that well forever. "They" say a conventional well really can't be shut in longer than a year or the operator risks losing it. Note: I say "conventional" for a reason.

Yahoo!Finance "Markets Reporter" had a fascinating story today. I have no idea what "The Energy Word" is and I don't know Dan Dicker's credentials but he is noting the same thing I've been thinking about.

"Something serious is going," he says. 

I don't care about the pricing, I don't care about the geopolitics; I don't care about any of that -- I just think it's fascinating that Washington (DC) doesn't seem absolutely panicked:

The oil market is undergoing a serious production problem, warns one analyst, even as prices retreat temporarily amid Covid lockdowns in China.

"From the long term, something far more serious is going on — and that is what's going on in Russia," Dan Dicker, founder of The Energy Word told Yahoo Finance Live.

"The energy companies, Exxon, Total, BP, leaving Russia, stranding assets in Russia. What we've seen is that production in Russia is down more than a million barrels in April alone," said Dicker.

"That's going to be a long term systemic problem with production in Russia," he added. "That's a very very big deal for long term prices."

A million bbls in April and it's barely even started.  

I think the s**t is going to hit the fan in July.