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

• Oil at Sea Surges to Three-Year High

• The SPR Refill Saga Season 3

• Tweet of the Day

Oil at Sea Surges to Three-Year High

The amount of oil on tankers around the world has surged in evidence of shifting export flows after the EU embargo on Russian crude.

At 1.27 billion barrels as of last week, that amount is the highest since 2020, according to Vortexa.

There’s no resilience like oil market resilience

Around the time the EU embargo was about to go into effect, some traders and analysts worried prices would spike.

As a result, prices did spike. Amazing, right?

Never happened before.

It didn’t last, however, because in a world running on oil, there’s always a way around pesky things like embargoes.

Tankers loaded with Russian crude began moving it to Asia and Latin America.

Tankers loaded with U.S. crude began moving it to Europe.

That’s good for supply security, no doubt about it.

Unfortunately, longer tanker journeys mean higher freight rates, which mean higher-end prices.

So, about that tightening supply…

The IEA’s head, Fatih Birol, this week issued a totally unexpected warning.

He said that the oil market will tighten in the second half of the year because of OPEC+.

This, of course, will add upside potential to oil prices.

On top of higher freight costs because of those longer journeys.

That’s very bad news for large oil importers, especially those different from China and India, which have access to discount Russian crude.

You play with global oil flows at your own risk.

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The SPR Refill Saga Season 3

You’ll never guess what Secretary Granholm said this week.

She said the Department of Energy is considering starting purchases to refill the strategic petroleum reserve later this year.

Building up suspense is important…

But overdoing it risks turning you into a laughing stock.

Granholm’s statement comes less than a month after one where she said, “This year, it will be difficult for us to take advantage of this low price.”

And that’s not all she said. Oh, no….

“But we will continue to look for that low price into the future because we intend to save the taxpayer dollars,” the Energy Secretary also said in late March.

Do you think she’s checked prices this week?

You know, the Oilman sometimes wonder what goes in the heads of those in Washington.

Taxpayers first

In her latest comments, Granholm made sure to avoid future embarrassment by hedging.

She said that purchases may begin in the second half of the year, after the end of first-half sales.

“Then we will look to take advantage of prices if it is advantageous to the taxpayer in the rest of the year. We hope to be able to start to refill.”

Well, I’d say you can drop that hope right now.

Did you see China’s latest oil import figures? They’re up by 22% from February.

And that’s while economic indicators show a weaker-than-expected rebound in the economy.

Something tells me “the advantage of prices” is not happening this year

Around the Global Patch

🇺🇦 A sea of NATO…?
🇷🇺 Russian oil closes in on G7 price cap.
🇨🇦 Royal Bank of Canada = 2022 Top Oil & Gas Financier.

Tweet of the Day

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