Good morning, here's what the Oilman has for you today:

• De-dollarization Drive Shaves Off 20% of Oil Market

• SPR Now 14 Million Barrels Fuller than A Year Ago

• Upcoming Oil and Gas Events

• Tweet of the Day

De-dollarization Drive Shaves Off 20% of Oil Market

A fifth of oil trade this year was settled in currencies different from the dollar.

That’s per JP Morgan data, and it’s a lot.

The de-dollarization of oil trade is well underway and may speed up.

The dark side of sanctions

The U.S. is in a position to punish any other country by using its currency as a weapon.

And it has been doing it quite a lot.

It seems we overdid it last year with Russia, setting off alarms in other countries.

The thinking goes, “If they can do it to Russia, they can do it to me.”

True enough. But now these countries are taking action.

India and the UAE sealed an oil deal in rupees.

China and the Saudis inked a $7-billion currency swap line.

There were a total of 12 major commodity deals settled in non-dollar currencies this year.

A trend set to accelerate

Worries about the potential de-dollarization of the global oil trade began to pop up last year.

Reports of non-dollar deals fueled these worries nicely this year.

Some have argued that global de-dollarization would take decades.

But it doesn’t really need to be global.

A fifth of the global oil trade is already a lot.

And it happened in a single year.

Now imagine the trend accelerating…

Which it may well do.

 Just think about the size of China in international trade.

And remember its eagerness to make its currency more popular.

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SPR Now 14 Million Barrels Fuller than A Year Ago

The Department of Energy has bought 14 million barrels of crude for the SPR this year.

After draining 180 million barrels in 2022.

Slow and easy does it because there’s no alternative

The DoE has been slow to refill the strategic petroleum reserve.

It has been buying 3 million barrels there and 2 million barrels here.

And also convincing some oil companies that borrowed oil to return it to the SPR.

There was no other way, really.

The moment the DoE announced a solicitation, oil prices spiked.

And it had set a price range for the refill purchases of between $68 and $72 per barrel.

Oil’s been trading above that for much of the year.

To be fair, the DoE was surprised by the positive with its total purchases in this price environment.

It had planned to buy 12 million barrels.

A drop in the sea

The federal government topped its own target for SPR refill purchases this year.

Yet 14 million barrels is a drop in the sea when compared to the total drawdowns of the last two years.

Which stands at 270 million barrels.

The total includes federal government withdrawals and mandatory sales.

Now, the DoE has canceled some 140 million barrels in planned sales.

But at this rate, it will take decades to replenish the SPR to pre-2022 levels.

If it even needs to be replenished, which not everyone believes.

If you ask me, a full SPR is better than an empty one.

Even if we’re the biggest oil producer in the world.

You never know.

Things happen, especially in the Middle East.

Upcoming Oil & Gas Events

• January 16: TIPRO/IPAA Leaders in Industry Luncheon, Petroleum Club of Houston, Houston, TX

• January 17: IPAA Private Capital Conference, The Post Oak at Uptown Houston, Houston, TX

• January 17-18: GO-WV Winter Meeting, Marriott Town Center Hotel, Charleston, WV

• January 18: Kansas Oil and Gas Day Legislative Reception, Kansas State Capital, Topeka, KS

• January 23-25: POWERGEN International, Ernest N. Morial Convention Center, New Orleans

Around the Global Patch

🇮🇳 Steel sector under siege: the menace of cheap imports in India.
🏴󠁧󠁢󠁳󠁣󠁴󠁿 TotalEnergies offloads 25.5% stake in Scottish wind farm to PTTEP.
🇷🇺 Russian refined oil exports surge to a seven-month peak.

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