Newsletter No. 174
Good afternoon,
There is a lot moving in the energy market right now, and most of it comes back to the same thing: supply, demand and who can actually get barrels where they need to go.
Oil prices are climbing again as tensions with Iran put major shipping routes at risk. Gasoline prices are moving higher, Russian oil is backing up at sea, and lawmakers in Washington are considering new sanctions aimed at Russia’s biggest energy customers and its shadow fleet.
At the same time, drilling activity continues to grow across Texas and the U.S., even as the Permian saw a weekly decline. We are proud that King Operating Corporation is part of the continued development of American energy.
We are also watching where new capital is flowing. Samos Energy just raised $230 million to pursue producing oil, gas and power assets, showing that investors are still looking for real, cash-flowing energy opportunities.
And while people are debating whether the AI bubble is getting ready to burst, one thing is clear: AI and data centers still require an enormous amount of reliable power. The technology may change, but the need for dependable energy is not going away.
In this week’s issue of The Upside, I’ll break down what these stories mean, why they matter and where I believe the opportunities may be.
This Week's Headlines
Oil and Gas News
- Oil Prices Rise on Supply Fears
- Russia’s Oil Exports Hit Massive Offshore Bottleneck
- Sanctions Bill Honors Senator Lindsey Graham
- Gas Prices Could Reach $4 Soon
What's Happening at King
- Don't Miss an Episode of the Oil & Gas Rundown LIVE!
Energy Market Perspective
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AI May Cool Off, but Energy Demand Is Just Getting Started
Move to Watch
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Samos Raises $230 Million for Energy Deals
Oil and Gas News
Oil Prices Rise on Supply Fears
Oil prices climbed for a fourth straight day, with WTI above $80 and Brent above $85 per barrel. Iran’s threats to disrupt additional shipping routes beyond the Strait of Hormuz are raising concerns about global oil supplies and pushing prices higher.
Russia’s Oil Exports Hit Massive Offshore Bottleneck
Nearly 135 million barrels of Russian crude are stranded at sea as Ukrainian drone strikes reduce the country’s refining capacity and force more oil into export markets. However, sanctioned cargoes are facing limited buyers, congested terminals and lengthy transfer delays.
Sanctions Bill Honors Senator Lindsey Graham
Although Russia’s seaborne crude exports recently reached their highest four-week level since early 2022, revenues continue to decline due to lower global oil prices, wider discounts on Russian crude and shipping delays. China and India remain the largest identified buyers, while a significant share of shipments is still listed with unknown destinations.
A new bipartisan bill would put more financial pressure on Russia by targeting the countries that buy the most Russian oil and gas. It could place tariffs of up to 100% on major buyers, including China and India, while also sanctioning Russian banks, officials, energy projects and the “shadow fleet” of tankers used to avoid current restrictions.
Lawmakers are considering naming the bill after Senator Lindsey Graham, one of its main authors, who died shortly before it was introduced. Graham had worked on the proposal for more than a year and reportedly believed it could become one of the most important achievements of his career. Supporters now see passing the bill as a way to continue his work and honor his legacy.
Gas Prices Could Reach $4 Soon
Gas prices could rise above $4 per gallon within the next several days. Fighting in the Middle East and damage to Russian oil refineries are pushing oil prices higher, which is raising prices at the pump.
The national average was about $3.86 per gallon on July 14. Experts say prices could increase another 15 to 45 cents per gallon, while diesel could reach $5 per gallon by the end of the week.
Happening at King
U.S. and Texas Rig Activity Grows as Permian Slips
Drilling activity continued to grow across Texas and the U.S., with each adding one rig last week. Texas now has 272 active rigs, up 17 from a year ago, while the nationwide count reached 581, up 44 year over year.
Although the Permian Basin lost five rigs, overall activity remains strong. At King Operating Corporation, we are proud to be part of the continued growth and development of the U.S. oil and gas industry.
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Don't Miss an Episode of Oil & Gas Rundown LIVE
Join us live every Wednesday at 2 p.m. CT for Oil & Gas Rundown LIVE, where we break down the latest headlines, market moves, and industry developments shaping oil and gas in real time. It’s a chance to stay current on up-to-the-minute energy news, hear sharp insights on what matters most, and get a clearer view of where the market may be headed. Whether you follow the industry closely or just want a smart, timely update each week, this is a conversation you won’t want to miss.
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Energy Market Perspective
AI May Cool Off, but Energy Demand Is Just Getting Started
The AI market may be getting ahead of itself, but the energy demand behind it is real.
Not every AI company will succeed, and not every project will deliver what investors were promised. We have seen this before with new technologies. The excitement comes first, then the market figures out what actually works.
What is not going away is the need for power. AI data centers require enormous amounts of reliable electricity, 24 hours a day, seven days a week. That power has to come from somewhere.
Renewables will be part of the solution, but they cannot carry the entire load alone. Natural gas is going to play a major role because it is reliable, scalable and available when the sun is not shining and the wind is not blowing.
The same lesson applies to the workforce. AI can make experienced people faster and more efficient, but it cannot replace decades of knowledge, judgment and real-world experience. We see that every day in the oil and gas business.
The AI bubble may rise or fall, but America’s need for dependable energy will continue to grow. That is why domestic oil and gas development remains so important.
Learn More about how King Operating Corporation is helping develop the energy America needs for the future.
Move to Watch
Samos Raises $230 Million for Energy Deals
Samos Energy raised $230 million to buy oil, gas and power assets around the world. The company is mainly looking for established projects that are already producing energy and making money.
Samos may pursue deals worth more than $1 billion and plans to build a larger group of energy assets over time, especially in Southeast Asia.
If you'd like to talk to someone about King and are an accredited investor, you can fill out your information here or schedule a Zoom conversation with one of our SVPs here and someone will reach out.
All the best,
Jay
