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🛢️ European Vacation: WTI Edition
And More Money Flushed Down the Clean Energy Drain

Good morning; here's what the Oilman has for you today:
European Vacation: WTI Edition
Climate Advisor Excited About Higher Clean Energy Costs
Tweet of the Day

WTI Goes to Europe
Starting in June, West Texas Intermediate Midland crude will become part of the Brent crude basket of crudes.
The motives behind the addition were a much higher volume of U.S. crude going into Europe and dwindling trade in the original Brent grades.
It’s a changing world in oil
Since its inception, the Brent crude benchmark has comprised half a dozen crude oil grades, all produced in the North Sea.
With North Sea oil production in decline, thanks to natural depletion and anti-oil government policies, U.S. exports of crude to Europe have surged.
For April alone, shipments of U.S. crude to Europe could reach 1.7 million bpd.
Shipments of North Sea oil, on the other hand, have been in a stable decline.
Basically, it made sense to include WTI Midland in the Brent crude mix, so S&P Global, which provides the benchmark, went and did it.
Meanwhile, Norway has told its oil companies that boosting production is their “social responsibility.”
No joke, the energy minister really said it.

The Era of U.S. oil dominance
The inclusion of WTI Midland into Brent crude has one massive implication for the oil market of tomorrow.
This is a greater impact on U.S. political, government, and business developments on international prices.
So far, this impact has been largely confined to WTI, the U.S. benchmark, but this will no longer be the case.
Here’s how one analyst put it:
"Bottom line for Brent is that it will be much more influenced by U.S. fundamentals such as Strategic Petroleum Reserve releases and Permian production," said Rebecca Babin from IBC Private Wealth US.
So, while U.S. production growth may have slowed down and while the federal government is trying to shrink the industry, U.S. oil will be dictating global prices.
How’s that for clout?

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Climate Advisor Excited About Higher Clean Energy Costs
White House climate advisor John Podesta has tried to rewrite the fundamental rules of business.
According to him, projections that the IRA’s clean energy incentives could end up costing twice or more than budgeted is good news.
If we need to throw more money at it, it means it’s working!
The Joint Committee on Taxation in Congress has calculated that incentives included in the Inflation Reduction Act could cost $515 billion over ten years.
The original size of the incentives is $270 billion.
The Wharton School has separately estimated that the incentive tab could top $1 trillion.
What does Podesta say to that?
"I think this is evidence that the bill was actually working, that people are making plans, they're investing money."
That’s a funny definition of investment, isn’t it?
Once upon a time, subsidies and investments were two very different things, but these are different times.
If we’re listening to Podesta, they have come to mean the same thing.

This is how well it’s working
A month ago, Oregon suspended its EV tax incentive program...
Because it ran out of money, too many people wanted to “invest” in EVs.
The program will only be resumed if the state finds additional funding.
A couple of weeks later, New Jersey followed suit.
The state is suspending its Charge Up New Jersey program because it disbursed the $35 million it had earmarked for incentives ahead of time.
But sure, no problem if the IRA ends up costing a trillion dollars because Goldman Sachs said it would attract another $3 trillion in private investment.
Maybe. And it’s a big maybe.

Around the Global Patch
🇦🇺 Albemarle expanding lithium production in Australia.
🇮🇷 Iran's latest seizure shocks the Arabian Gulf.
🇸🇦 Saudi Arabia's budget in jeopardy without $80 oil prices.

Tweet of the Day
How good is Mining and Resources? Australia is a resources and fossil fuels superpower. We should be always grateful for our explorers, miners, drillers, and exporters.
— Gray Connolly (@GrayConnolly)
2:15 AM • May 4, 2023

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