Tag: oil

U.S. Postal Service seeks 8% fuel surcharge for package deliveries as Iran war raises oil prices

The U.S. Postal Service on Wednesday said it is seeking to impose a temporary 8% fuel surcharge for package and express mail deliveries to deal with rising transportation costs, which include higher oil prices as a result of the Iran war.

If approved by the Postal Regulatory Commission, the surcharge would take effect April 26 and remain in place until Jan. 17, 2027, the Postal Service said in a notice on its website.

The 8% surcharge would apply to postage on Priority Mail Express, Priority Mail, USPS Ground Advantage, and Parcel Select products. First-class stamps and other mail services would not be affected.

Oil prices have jumped more than 40% since Feb. 28, when the United States and Israel attacked Iran.

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$580 million in oil bets placed moments before Trump’s Iran post – FT 

Oil traders placed more than half a billion dollars in bets minutes before US President Donald Trump announced “productive” talks with Iran on Monday, the Financial Times has reported.

A burst of activity followed by a sharp price drop has raised questions about possible advance knowledge among market participants.

About 6,200 Brent and WTI futures contracts changed hands between 6:49 AM and 6:50 AM in New York – a one-minute flurry worth $580 million, based on FT calculations using Bloomberg data. Volumes in both benchmarks – Brent and US West Texas Intermediate – spiked simultaneously, about 27 seconds before 6:50 AM, while S&P 500 futures surged shortly after.

The trades came roughly 15 minutes before Trump said on Truth Social there had been “productive conversations” with Tehran to end the war in Iran.

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The Donald Gets a Double-Whammy

It sure looks like the Donald is on the receiving end of a double-whammy. His victory declaration in Iran looks to rank right up there with George Dubya Bush’s “mission accomplished” pratfall on the deck of a US aircraft carrier in 2003; and that also means that his SOTU boasting about defeating “Joe Biden’s” inflation and getting the gas pump price under $2 per gallon is out the window, too.

What’s back in play front and center, therefore, is the AFFORDABILITY issue come November. The Dems have no clue about how to fix it, of course, but they sure as hell will be brutally pounding the GOP candidates and the Donald with the latter’s own bogus hot air on the matter.

For want of doubt, consider the conflagration in the global oil markets at this very moment. At ground zero in the Persian Gulf, the major crude oil from the region have already shot the moon.

Thus, Oman crude prices are up to $154/barrel, crossing $150 for the first time ever. At the same time, Dubai crude is up to $130/barrel, while Brent is trading at $110.

This means, in turn, that the gap between Oman and world prices is off-the-charts wide, and now stands at 30% or $44 per barrel. By comparison, before the Iran War, the difference between all benchmarks was just $5 per barrel during January and February.

In very short-run, of course, Brent and WTI are priced based on US and European supply conditions, while the actual disruption is concentrated in the Middle East, meaning they do not fully capture the severity of the physical shortage. YET.

On the other hand, global crude oil markets everywhere and always eventually get arbitraged, causing the major marker grades to fully reflect worldwide supply, demand and inventory conditions. So unless the Gulf is re-opened within a matter of days, the marker grades will soon rise toward these Gulf prices as global inventories continue to be liquidated.

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Oklahoma Gov. Kevin Stitt Appoints Oil & Gas Executive Who Reportedly Donated to Adam Kinzinger to Fill Mullin’s Senate Seat

Oklahoma Governor Kevin Stitt has chosen oil and gas executive Alan Armstrong to fill the U.S. Senate seat being vacated by Sen. Markwayne Mullin.

The move comes as Mullin barrels toward confirmation as President Trump’s Secretary of Homeland Security.

President Donald Trump announced that Oklahoma Senator and undefeated MMA fighter Markwayne Mullin will lead the Department of Homeland Security (DHS) effective March 31.

If Mullin is confirmed and leaves the Senate, Kevin Stitt, the Republican governor of Oklahoma, will be required to appoint a temporary replacement to serve until voters choose a senator in the next election.

Under Oklahoma law, Governor Kevin Stitt will have 30 days to appoint a temporary U.S. senator to fill the vacancy until voters decide the seat in the next election.

The appointee will serve only briefly and is expected to sign an oath promising not to run for the seat in the upcoming election, a measure designed to prevent the advantages of incumbency in the race.

According to NOTUS, citing three sources, Stitt selected Armstrong, a longtime energy executive and former CEO of Williams Companies, to serve out the remainder of Mullin’s term.

The news outlet reported that Armstrong and Stitt were expected to meet with President Donald Trump at Mar-a-Lago to finalize the decision.

Reports reveal Armstrong previously donated $5,800 to former Rep. Adam Kinzinger, one of the most vocal anti-Trump Republicans.

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Orban Announces Will Block All EU Measures For Ukraine Until Oil Transit Restored

Hungary remains one of the lone Ukraine-skeptic EU/NATO members which actually has a lot of leverage, resulting in bolder and bolder pronouncements being issued by Hungarian Prime Minister Viktor Orbán of late.

He has newly made clear this week that Hungary will block all EU summit decisions in Ukraine’s favor until oil Russian flows resume. There’s ongoing controversy centered on the contested Druzhba pipeline and the central European nation’s vital flows from Russia.

“We would like to get the oil, which is ours, from the Ukrainians, which is now blocked by the Ukrainians, I did not support any kind of decision here, which is in favor of Ukraine … [as long as] the Hungarians are not able to get the oil which belong to us,” Orbán stated.

Obran has already blocked a proposed €90 billion ($103 billion) loan for Ukraine as well as efforts to slap new sanctions on Moscow, despite the pleadings, pressure, and interventions from other EU leaders.

“I will never support any kind of decision here which is in favor of Ukraine,” Orbán made clear at an EU meeting Thursday. “The Hungarian position is very simple. We are ready to support Ukraine when we get our oil, which is blocked by them,” Orbán underscored further.

Budapest has accused Ukraine of intentionally leaving the pipeline in a state of disrepair after Kiev alleged that Russia struck it. Ukraine has been charged with seeking to indirectly punish Hungary and squeeze its energy supplies.

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Trump Announces Israel “Violently Lashed Out” and Hit Gas Fields in Iran, Claims US “KNEW NOTHING” of Attack and “NO MORE ATTACKS WILL BE MADE BY ISRAEL”

President Trump on Wednesday announced on Truth Social that Israel hit a “major facility known as South Pars Gas Field in Iran,” prompting Iran to launch retaliatory attacks on Qatar’s liquid natural gas facility at Ras Laffan Industrial City.

Qatari officials said Iran’s attacks caused “extensive damage” to the area of the world’s largest liquefied natural gas export facility, describing the move as “dangerous escalation, flagrant violation of state sovereignty, and a direct threat to its national security and regional stability.”

Trump’s statement confirms reports that Israel launched the initial attacks on the South Pars gas field.

Per the New York Times:

Iran and Qatar on Wednesday accused Israel of attacking a giant offshore natural gas field that the two countries share, sending the prices of oil and natural gas soaring on what would be a sharp escalation of strikes on energy infrastructure in the war against Iran.

Iran uses most of its natural gas domestically, meaning that the strikes will most likely have a limited effect on the global supply of gas, which is used in power plants, home furnaces and heavy industry. But the attacks signal that the Persian Gulf’s extensive energy facilities may be at growing risk.

Iran’s oil ministry said on social media that airstrikes had damaged a number of its facilities connected to the South Pars gas field. It appeared to be one of the most significant energy sites to be hit since the U.S.-Israeli air war against Iran began nearly three weeks ago.

Iranian state media reported that oil and petrochemical facilities in the southern city of Asaluyeh, a key hub for the country’s energy industry, were also hit by an airstrike.

This sent oil prices surging over $110.

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Oil & Religion

QUESTION: Marty, looking at Socrates, it does not show that this release of 400 million barrels of oil will do much. Am I reading this correctly?

ANSWER: The International Energy Agency released 400 million barrels of oil into the global market, the largest release of emergency oil stocks in history. This is just for show. However, it actually makes things far more vulnerable. This is all predicated on a quick victory with the conquest of Iran. If that assumption is wrong, this will not help.

1. MATHEMATICALLY INSUFFICIENT (won’t even cover 2-3 months of lost supply)
2. STRATEGICALLY STUPID (leaves U.S. vulnerable to future crises)
3. POLITICALLY DESPERATE (election-year panic move)
4. ECONOMICALLY FUTILE (treats symptom, not disease)

Let’s get real. Global oil consumption is about 100 million barrels/day (mb/d). U.S. consumption is about 20 million barrels/day. The disruption of the Strait of Hormuz supply affects about 21 million barrels/day (21% of global supply).  Releasing 400 million barrels at the global consumption rate would last 19 days (400M ÷ 21M/day). There is no way this will calm markets in the long term.

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Trump Threatens Oil Facilities After US Strikes Iran’s Kharg Island

Following a US strike on the military infrastructure of Kharg Island, Trump warned that Iran’s

oil facilities would be targeted if ships aren’t permitted to pass through the Strait of Hormuz.

The bombing of Kharg Island’s military infrastructure follows reports that the US has sent a roughly 5000-strong amphibious ready group and marine expeditionary group to the Middle East.

Commenting on the US strike from Truth Social, President Trump said:

“Moments ago, at my direction, the United States Central Command executed one of the most powerful bombing raids in the History of the Middle East, and totally obliterated every MILITARY target in Iran’s crown jewel, Kharg Island.

“Our Weapons are the most powerful and sophisticated that the World has ever known but, for reasons of decency, I have chosen NOT to wipe out the Oil Infrastructure on the Island.”

“However, should Iran, or anyone else, do anything to interfere with the Free and Safe Passage of Ships through the Strait of Hormuz, I will immediately reconsider this decision.”

According to Fars News Agency, an Iranian outlet with close ties to the Islamic Revolutionary Guard Corps (IRGC), targets hit included the island’s air-defense systems, a naval base, a helicopter hangar, and the airport control tower. Over 15 explosions were reported.

Kharg Island is Iran’s main export hub for petroleum products with 90 percent of Iranian crude oil being distributed through its facilities.

Iran exported between 1.1 million and 1.5 million barrels per day from the start of the war to Wednesday last week.

As such, the island was frequently targeted during the Iran-Iraq War due to its strategic importance, serving as an economic lifeline of the IRGC.

Iran has already threatened retaliation against the Gulf states should any of them attack the country’s energy infrastructure.

Trump’s threat comes the day after Mojtaba Khameini, the new Supreme Leader of Iran, declared in his first public statement that Iran would continue its blockade of the Strait throughout the war.

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AXIOS: Trump Considering Seizing Kharg Island With American Troops

U.S. President Donald Trump has intensified calls for international allies to deploy naval forces to the Strait of Hormuz, the critical chokepoint for global oil shipments, amid escalating disruptions caused by the ongoing U.S.-Israeli military campaign against Iran.

President Trump is also considering seizing Kharg Island, which handles about 90% of Iran’s crude exports, if the Strait of Hormuz blockade continues, reports Axios.

U.S. officials say capturing the island could deliver “an economic knockout of the regime.” The plan would require U.S. boots on the ground and a military occupation of the island. Officials warn it carries major risks, including Iranian retaliation against Gulf oil facilities and pipelines, especially in Saudi Arabia.

One official said “there are big risks, there are big rewards.”

At a meeting in the Oval Office, Trump pressed General Caine on why the United States could not immediately reopen the Strait of Hormuz. Caine explained that controlling the strait is extremely difficult because Iran can disrupt shipping with small, mobile forces rather than large naval assets.

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Kuwait Cuts Oil Output As Qatar Warns Hormuz Chokepoint Chaos Risks Global Shock

Kuwait began cutting crude oil output after storage tank farms began filling up, as crude could no longer be loaded onto very large crude carriers and transported through the Strait of Hormuz, according to The Wall Street Journal.

Sources say the OPEC founding member is now weighing broader reductions in crude production and refining, potentially limiting operations to only domestic demand, with a decision expected within days.

UBS analyst Nana Antiedu noted that Brent crude futures climbed to $91/bbl after WSJ released the report.

WSJ noted:

Data provider Kpler said it has seen indications that Kuwait has started to cut production, adding that the country would have to cut more output in the coming days, as storage would otherwise fill up in around 12 days.

Shutting in an oil well risks long-term damage to reservoir pressure and incurs high restart costs, usually making it a measure of last resort. Restarting production can take days or even weeks depending on the reservoir.

“Storage is limited in the Middle East, and the only fix to avoid tanks running over is to curb production,” UBS commodity analyst Giovanni Staunovo said. “The longer the strait stays closed, the more barrels of crude and refined products will be missing, leading to higher prices.”

Earlier in the day, Qatar’s energy minister, Saad al-Kaabi, told the FT that “Everybody who has not called for force majeure we expect will do so in the next few days if this continues. All exporters in the Gulf region will have to call a force majeure.”

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