Rory Johnston
@Rory_Johnston
oil market researcher | founder of | former bank economist | markets, code, barbecue | subscribe to my research:
1.5K Following 111.5K Followers
Where you’ll find me monitoring the situation.
The RCA Circle Bed from the late 1970s priced over $30,000.
It included:
A built-in color TV
A full stereo sound system with an 8-track or cassette player
A built-in bar with decanters and glassware.
A wireless phone.
A Control Panel that controlled all lighting, volume, and media on a built-in dashboard within arm's reach
All wrapped in "rich" Corinthian leather
I want one now.
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There isn’t any more consensus in Hong Kong than in North America about how China managed to pull off the Beijing Swing.
It was my absolute pleasure to meet up with @Rory_Johnston (who was in Hong Kong presenting at the Citic/CLSA Investor Forum) for dim sum breakfast and chatting a bit about oil/petrochems and HK.
(I stole Rory's photo!)
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🌅🥟 Huge thanks to @bauhiniacapital for taking me out for my first breakfast dim sum in Hong Kong—super interesting guy who I’ve followed on here for years, fantastic to finally put a face to the Twitter avatar.
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Finding my place in Hong Kong
Huzzah, API!
API knows better than most how terrible it would be for the White House to start mucking with export flows.
Trashes US rep as reliable energy supplier, harms US industry, and despite ST sugar high of lower pump $ would ultimately rebound & be worse for US consumers
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Americans are hurting from rising diesel costs driven by an unprecedented disruption to global refining capacity. We understand the administration is looking at every option to deliver relief, but restricting U.S. energy exports would only compound the problem — exacerbating refining challenges and ultimately hurting consumers.
The answer is more supply and more flexibility — not new restrictions that risk making a difficult situation worse.
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what a moment to be 12-hours off time zone
Trump calls for diesel export ban
My base case remains that if they move, it'll be a restriction (1973/74) than a outright ban, but who knows with these guys
Also, "I've called for it too" from Trump is funny because it's.. his choice
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Double tap for crude
This time is was the much-expected restart of the EW pipeline, which has taken more than a week compared to the original guidance of a “few days”
#OOTT# | Saudi Arabia Restarts East-West Oil Pipeline – RTRS Cites Trade Sources
- Prepares To Resume Crude Oil Exports From Yanbu Port Later On Tuesday
$5 billion to rebuild Middle Eastern energy infrastructure
NEW: The Trump administration has proposed investing $5 billion in a new fund that would help Middle East countries rebuild energy infrastructure battered in the Iran war and reduce their reliance on the Strait of Hormuz, Ud Middle East officials said, plus docs WSJ reviewed
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As always, devil in the details—is this the “open” Tehran pledged previously, or open-open?
And I’d love more details on those other demands.
But crude market diving regardless; sell first ask questions later it seems.
Crude down ~$3/bbl on the headline.
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IRAN HAS INFORMED THE TRUMP ADMINISTRATION THAT IT WILL OPEN THE BLOCKED STRAIT OF HORMUZ "WITHIN SEVEN DAYS" IF IT ACCEPTS DEMANDS SUCH AS LIFTING THE US MILITARY BLOCKADE OF IRANIAN PORTS, ACCORDING TO A SENIOR IRANIAN GOVERNMENT OFFICIAL ON THE 22ND. WITH IRAN'S CRUDE OIL EXPORTS VIRTUALLY HALTED DUE TO THE PORT BLOCKADE, IRAN IS TRYING TO BREAK THE PROLONGED STALEMATE BY MAKING THIS MOVE. - KYODO
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Huh, both interesting and weird, especially with many European refiners still being told to expect no crude in October
Not only would this imply a recovery in Yanbu loadings, but that those ships could get back through the Bab el-Mandeb—unless they’re planning to go the long way
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Several Asian refiners have been told informally by Saudi Aramco they will soon be able to pick up oil from the Red Sea port of Yanbu
That's $273 per barrel for average US retail diesel price.
BREAKING: US Diesel prices have hit an all time high of above $6.50, per AAA
Included this new Saudi Red Sea oil flow tracker in our latest weekly.
Confirmed and suspected Saudi red sea loadings, said loadings vs confirmed exits, and a breakdown of those exits by egress route.
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🛢️ OIL CONTEXT WEEKLY 🛢️
Saudi Arabia’s East-West Pipeline entirely offline this week and will remain throttled for a month or more, pushing Riyadh headlong into the Hormuz dark trade, while diesel prices rose above $220/bbl.
Summary below, full report in reply.
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Take diesel scarcity for example:
Harder to have outright substitution/demand destruction (vs, say, gasoline) in the short term, so the demand destructive impulse is grinding the entire economy slower via higher cost structure—much like a rate hike.
Higher rates would accelerate that adjustment.
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"It would necessarily be painful."
Chicago Fed President Austan Goolsbee says the central bank has reached the limit of any ability to wait out supply shocks, which means higher interest rates will have to slow sectors of the economy that may not be driving up prices.
He also sees evidence that the AI investment boom is not "staying in its lane," and cites conversations with businesses who see increasing labor-market pressures for AI-adjacent industries.
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btw this translates to $22-25 PER BARREL in shipping costs, when it normally costs like $2
CHART OF THE DAY: The crisis in the oil tanker market.
The cost of hiring a supertanker from the Persian Gulf to the Far East has risen 12-fold in just a few months to a record high of >$1.1 million a day.
My @Opinion column is here:
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"do your own due diligence and think for yourself, you sheep—that's what Bro said and I always listen to Bro"
Seeing a lot about the bolstered Saudi gulf loadings/Hormuz transits as the reason for this latest price dip
That's entirely an expected switcheroo from crushed Red Sea loadings
And while single-day figures can always be more impressive, you really gotta smooth it (10dma below)
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Increasingly going to be easier to build a pipeline in North America than a data center.
My, how the winds change.
Abbott slaps halt on Texas data center permits via @politico
Canada right next door, and you’ll note that Belarus is landlocked.
Used to ship potash via Lithuania, until sanctions in 2022 prompted Lithuania to terminate said transit arrangement.
Now Belarusian potash is rail-shipped Russia and exported from Russian Baltic ports.
Swell…
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Trump says he wants potash from Belarus instead of Canada
Once upon a time this would have been enough for a crude price pop.
But we’re already so deep in a supply hole right now the market just shrug/waits for the next diplomatic headline.
Makes sense behaviourally, but supply losses while you’re already in a hole are actually worse.
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