World Running Short of Supertankers Threatens Long-Haul Oil Flow The soaring cost of moving oil around the world is making some long-distance crude trades uneconomical, threatening to disrupt flows at a time when fuel markets have never been tighter. The jump is being driven by a shortage of available supertankers. In some parts of the world, there are barely any of the ships — each the length of three football fields — left for hire. The squeeze is making faraway barrels less attractive and encouraging refiners to snap up supplies closer to home if they can find them. But for oil traders, the risk is that shipping becoming prohibitively expensive. They’re concerned that the higher costs make it unprofitable for some refiners to turn crude into fuels, deterring them from buying cargoes that have to sail over long distances, even when demand to make diesel and gasoline is strong. On the industry’s main benchmark route, very large crude carriers hauling 2 million barrels of crude from the Persian Gulf to China are earning upward of $1.2 million a day. Similar pressures are now spreading across the freight market globally. (Bloomberg)

As their AI spending plans begin to outrun their cash flows, tech companies have become more focused on managing their balance sheets in order to keep their investment-grade credit ratings and maintain access to the deepest pools of low-cost corporate debt. Overall, Morgan Stanley analysts have tallied more than $3.1tn in off-balance-sheet commitments and credit support by seven hyperscalers and chipmakers. (FT)

Moscow Refinery Hit as Russia Reports Largest Drone Attack Several drones struck the territory of the Moscow refinery, damaging a facility at the site, Mayor Sergei Sobyanin said, without elaborating. Nobody was hurt and emergency services were working at the scene, he said in a post on Telegram. Oil producer Gazprom Neft PJSC owns the refinery, located about 25 kilometers (16 miles) from the Kremlin. It has a processing capacity of about 245,000 barrels a day and is one of the key fuel suppliers for the capital region. (Bloomberg)

If any of you have been listening to the Morning Gap show on @NTLiveMedia, you know that I have been warning since April, that the US has been fairly insulated from the energy crunch, but it was coming. Well, it is here. I told @alexjlockie in an interview early this summer that my best advice to trucking companies was to buy now and prepare for higher diesel prices. 2027 is going to hurt US farmers far more than you know between higher diesel prices, and higher fertilizer prices.

America’s Affordability Crisis Is Hitting the Used-Car Lot A used car priced between $10,000 and $15,000 today is almost nine years old on average and has 98,000 miles on it, according to auto research site Edmunds. The average new car now sells for $50,000, and with cars losing around 40% of their value after three years, the average used vehicle sells for more than $30,000. Used cars selling for less than $20,000 are tougher to find and have high mileage, and dealers have to fight to get them, with one dealer saying they're "like gold" and requiring record prices to obtain. (Bloomberg)

We have been partners for almost a century. Aramco started in 1933 when Saudi Arabia granted oil exploration rights to the Standard Oil Company of California (now $CVX), leading to the creation of the California Arabian Standard Oil Company. SOCAL was later joined by the Texas Oil Company (Texaco, now a subsidery of $CVX), the Standard Oil Company of New Jersey (now $XOM), and Socony-Vacuum Oil Company (now also $XOM).

“Our conditions are an end to the war on all fronts, the release of our frozen funds and an end to the naval blockade,” said Rezaei, who took over as secretary of Iran’s Supreme National Security Council about a month ago. “It is in Washington’s interest to accept these conditions. Trump’s threats will not achieve any results. We are prepared for a decisive war.” Mohsen Rezaei told Al Jazeera’s Tehran bureau chief, Nour Eddine Edghir, in an exclusive interview on Saturday.

Bolivia scraps diesel subsidy to combat fuel shortages Bolivian President Rodrigo Paz on Friday announced the ​end of state diesel subsidies, ‌shifting the country to a unified pricing model to help resolve chronic fuel ​shortages. Bolivia imports roughly 90% of ​its diesel, and the government spends ⁠approximately $55 million weekly on subsidies, ​according to Paz. "Starting today, diesel will ​cost what it costs us to buy abroad," Paz said, citing rampant fuel smuggling ​and black-market reselling as key ​drivers of the weekly deficit. To ​offset ⁠the financial strain on households and key economic sectors, the administration ⁠unveiled ​targeted relief measures, including ​direct cash transfers and preferential credit lines. (Reuters)

Europe’s Winter Power Surge Is Biggest Since Energy Crisis As Europe heads into winter, electricity markets are flashing their strongest warning since the energy crisis. Wholesale power for January in Germany, the region’s biggest economy, is trading above €180 a megawatt-hour on the European Energy Exchange, up more than 60% from a year earlier. The main driver is natural gas, which has surged in recent weeks as Europe struggles to refill storage amid intensifying competition for the fuel. The Iran war has added to the pressure, with the closure of the Strait of Hormuz cutting off supplies from Qatar. (Bloomberg)

Texas power plant, nuclear projects under discussion in South Korea's US investment package South Korea and the United States are finalising the implementation of Seoul's pledged $350 billion investment package under a trade deal struck last year that lowered US tariffs on South Korean goods to 15%. Out of the $350 billion, $150 billion is earmarked for shipbuilding with details ​still being worked out for the remaining $200 billion in strategic investments. Below are details of the projects under discussion TEXAS GAS-FIRED POWER PLANT The first project is a combined-cycle gas power plant in Encinal, Texas. The 6.3 gigawatt project aims to supply electricity to AI data centres and semiconductor plants in Texas. EIGHT NUCLEAR REACTORS, WESTINGHOUSE STAKE Seoul and Washington are discussing the construction ​of up to eight large nuclear reactors in the United States. ALASKA LNG PROJECT Another project under discussion is South Korean participation in the Alaska liquefied natural gas project, a long-stalled pipeline and export scheme championed by US President Donald Trump NUCLEAR FUEL REPROCESSING A fourth potential investment ​concerns Washington seeking ⁠South Korean support on reprocessing spent nuclear fuel, according to South Korean ruling party lawmaker Yoon Hu-duk. CARBON CAPTURE A fifth potential project involves carbon capture, utilisation and storage (CCUS), according to South Korean ​lawmaker Yoon (Reuters)

Russian ESPO oil price exceeds $120 per barrel Russia's ESPO Blend oil jumped ​above $120 per barrel for the first time since April, boosted by demand ‌from Chinese refiners as the U.S.-Israeli war on Iran disrupts Middle Eastern supplies, three traders said and Reuters calculations showed. US lawmakers on Thursday approved legislation allowing ⁠President Donald Trump to approve tariffs on Russian oil purchases as the US ​seeks to limit Russia's ability to finance the war in Ukraine. The measure could hamper Russian ​oil supplies to India and China, although many traders say it could lead to a further spike in oil prices, potentially boosting Russian earnings from oil. (Reuters)

Saudis Tell European Refiners They’ll Get No Crude Next Month Saudi Aramco told at least two oil refining customers in Europe that they will be allocated no crude oil next month after the kingdom’s key pipeline to the Red Sea was attacked, people informed of the decision said. European customers normally receive Saudi Arabian crude on so-called term contracts, ensuring a steady flow of supply every month. Those deliveries will not take place next month, the people said, asking not to be identified because the information isn’t public. The decision applies to all European buyers, they said. (Bloomberg)

House Passes Bill Targeting Russian Oil The House passed legislation Wednesday that gives President Trump new authority to level tariffs and is intended to squeeze the biggest importers of Russian oil and gas, a measure designed to punish Moscow for the invasion of Ukraine. The legislation wouldn't only penalize certain Russian individuals and entities but also the five biggest importers of Russian oil and gas. It gives Trump the authority to issue up to 100% tariffs on the countries buying Russian energy. It also extends sanctions on Iran until 2031. (WSJ)

This headline today seems to have many frazzled: *THUNE SAYS HE IS 'OPEN TO CONSIDERING' AN EXPORT BAN ON DIESEL An export ban on deisel would have the OPPOSITE effect as intended, imho. Here are my thoughts on WHY: A diesel export ban would work against its own intent for three reasons. First, the United States is not short of diesel, it is short of cheap diesel, and the price is set by the global barrel. Gulf Coast refiners export a record volume of distillate because Europe and Latin America lost roughly 30% of Russian refining capacity to Ukrainian strikes and then lost the rest to Moscow's July export ban, so the marginal buyer of American diesel sits in Rotterdam and Santos, not Pennsylvania. Pulling US barrels off that market does not lower the global price, it raises it, and the US retail pump still prices off the global market because the Northeast, the region actually feeling the squeeze, imports its diesel rather than sourcing it from Texas. Second, the barrels that get trapped do not flow north. The Jones Act waiver in force through November 15 has moved about 125 thousand barrels a day across all products combined, is now administered voyage by voyage with an individual Department of War determination for each ship, and is throttled by clean tanker rates that are already at multi year highs. Stranded product in PADD 3 collapses the Gulf Coast diesel crack, and refiners respond to a collapsing crack the only way they can, by cutting runs, which removes the very supply the ban was meant to protect. That is exactly what the Energy Department found when it modeled the same idea in October 2022 and quietly dropped it. Third, the signal is permanent even if the ban is temporary. The United States became the supplier of last resort for the free world's distillate over a decade, and a ban announced to get through a midterm tells every buyer from Mexico to Germany that American supply is politically conditional. They respond by building redundancy, contracting with other suppliers, and paying a premium for reliability elsewhere, which weakens US refining margins structurally long after the ban is lifted. The diesel problem is a refining capacity and crude quality problem layered on a war. An export ban addresses neither and makes both worse.

Loved having the always amazing @caroljsroth on @NTLiveMedia this week. Here are here thoughts on fiscal dominance vs the Fed Link to this DO NOT MISS INTERVIEW: