U.S. Sanctions on Russia Boost Prices

by Jay Young | Investing, Oil & Gas, Tax Savings, Taxes, The Upside

Oil industry crisis concept. Oil barrel with american dollar

Newsletter No. 100

Good afternoon,

It is Thursday, January 23, 2025, and we’re excited to mark the 100th edition of The Upside! In this milestone issue, I’m bringing you the latest updates from the oil and gas industry, along with important news from here at King. As always, I’ll keep things clear and straightforward so you can stay informed on the key trends and developments shaping our industry today. Thanks for reading, and here’s to the next 100!

This Week's Headlines

Watch for Upcoming King Webinars Featuring Mauldin and Rice
Trump Reverses Climate Policies on Inauguration Day, Prioritizes Oil & Gas
EIA: Permian Basin to Produce Half of U.S. Crude by 2026
U.S. Sanctions Cut Russian Oil Exports, Boosting Prices
Orsted Faces Big Losses as U.S. Wind Plans Hit by Sanctions
Woodside Shifts Focus from Solar to LNG
Chevron and Shell Join Vaca Muerta Pipeline Project to Boost Oil Exports

HAPPENING AT KING

Recent and Upcoming Webinars
We are hosting informative, insightful webinars every month. Be on the lookout for more webinars featuring King's Chief Economist John Mauldin and our Macro-Economic Advisor Eric Rice coming up in February.

King recently held a webinar, featuring King's Macro-Economic Advisor Eric Rice giving insights into What Trump's Executive Orders Could Mean to Your Wallet. If you would like to watch the recording of this webinar, please fill out and submit this form and we will email you the link to the recording.

Oil & Gas News

Trump Reverses Climate Policies on Inauguration Day, Prioritizes Oil and Gas

On January 20, 2025, Donald J. Trump was sworn in as the 47th president of the United States, marking a peaceful transfer of power, a hallmark of American democracy. On his first day in office, Trump took bold action by ending the electric vehicle mandate, which aimed to reduce emissions from cars, and pulled the U.S. out of the Paris Climate Agreement. He declared a "national energy emergency," pushing for more oil and gas production, including reopening drilling in Alaska. These moves reverse many of President Biden's climate policies and prioritize fossil fuel growth, signaling a major shift for the U.S. energy industry.

EIA: Permian Basin to Produce Half of U.S. Crude by 2026

The U.S. Energy Information Administration (EIA) reports that the Permian Basin will produce more than 50% of the nation's crude oil by 2026. U.S. oil production reached a record 13.2 million barrels per day (bpd) in 2024, and is expected to rise to 13.6 million bpd by 2026, with the Permian’s output growing to 6.9 million bpd.

U.S. Sanctions Cut Russian Oil Exports, Boosting Prices

New U.S. sanctions are stopping Russian oil from reaching global markets, especially affecting Indian buyers like Bharat Petroleum. With key Russian companies targeted, Indian refineries are struggling to get oil for March deliveries. The sanctions could remove about 500,000 barrels of Russian oil per day from the market, which may lead to higher oil prices. You can see the up-to-the-minute commodities numbers here.

Orsted Faces Big Losses as U.S. Wind Plans Hit by Sanctions

Orsted, a Danish company working on offshore wind projects in the U.S., announced a $1.68 billion loss due to rising interest rates, problems with leases, and delays with its Sunrise Wind project. The company’s troubles were made worse by new U.S. rules under President Trump, which stopped new offshore wind projects and delayed permits.

Woodside Shifts Focus from Solar to LNG

Woodside Energy is putting its solar and hydrogen projects on hold to focus more on its oil and gas business. The company has stopped working on a solar power project in the U.S. and is delaying a hydrogen project until it gets more details on government tax breaks. Instead, Woodside is moving ahead with its LNG (natural gas) projects, including a new plant in Australia that should start producing in 2026. The company is also selling parts of its U.S. LNG project but doesn't plan to get involved in drilling for gas in the U.S.

Move to Watch

Chevron and Shell Join Vaca Muerta Pipeline Project to Boost Oil Exports
Chevron and Shell are backing a new pipeline project in Argentina's Vaca Muerta oil field to help move more oil to the coast for export. This $3 billion pipeline will carry up to 550,000 barrels of crude oil per day and ease the current transportation limits that are slowing production growth.

The pipeline is under construction and is expected to be finished by 2027. It is seen as a key project to support Argentina's growing oil production, which hit a record 400,000 barrels per day in late 2024. Despite some challenges with financing and government regulations, the project is moving forward with the support of major companies like YPF, Vista Energy, and Pluspetrol.

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Thank you for your continued support, and if you have any questions for myself or any member of the King team, please don't hesitate to reach out.

All the best,

Jay