RE: Tullow Oil (TLW)9 May 2026 12:25
STOCKBUSTER - Yeah I have imagined. I would imagine a lot of countries that don't have oil reserves will go. "Actually you know what. Let's build an oil reserve and start filling it up." That will take 2-3 years to fill. Everyone except Britain ironically. A source of demand that didn't exist in Feb
What has been fascinating is how little new production has come on tap. Yes it takes 5 years to set up a deep sea oil platform, so I understand why you would not want to invest in that... but only 3-6 months for American Fracking wells to come on line. What I find incredible is that the rig count is actually going DOWN! If you look at oil figures there is a 10-12 million oil gap and America has only been able to go from 11 to 14. They only manage to fill 3 million and have not tried to close the other seven to 9 billion by drilling - Doesn't that say something fundamentals.
When oil does come down. And you are an Airliner, Shipping Company, Heavy Industry. Are you not going to hedge your exposure ASAP. This pulls the oil curve up and allows refinancing options that are not on the table for TLW (even today).
If you are Saudia Arabia. Are you going to diversify by 1) carry on building NEOM, 2) Spend 5 years building more pipe lines (estimated cost 55 billion) or 3) why not hoover up companies like TLW/CNE/ HBR and diversify your oil producing assets. TODAY. It becomes a real differentiator when you can say. We'll sign a contract but even if the straight is closed we can get 12 billion out and redirect XYZ. We won't call Force Majeur because we have the diversity! The Europeans need to think carefully about that as Russia has proved to be less reliable than advertised and Signing long term agreements with America will now come with strings.
The market hasn't even thought about option 3 which is the quickest and ironically cheapest. TLW achilles heel is it's debt and Saudi has a far better cost of borrowing than nearly any other acquirer
And If you are Saudi and you are paying 2 million to ship a boat out of the straights. Aren't you going to come to some deal with the Houthi so that the Red Sea is secure and then have the Houthi send drones over to knock out Tankers in the Straight. Bad luck UAE. Should have stayed in Opec
With American going from the region, the Iranians are going to learn the phrase, what is good for the goose is good for the gander.
And if you think China has a Navy they can send to sort out that mess then I hope you have put on a long Foxcon and Short Apple. There is no way China would accept Foxconn being 100 billion when Apple is 3 trillion in that world. I would say China doesn't have the reach.
It's almost as if all the oil companies are going. "Hey wait a sec, if we just cut back on oil production we have a global straight of Hormuz power here". Oh sorry you need oil. Well if you could just get Gretta Thumberg to rock up to oil well and cut a ribbon/smash champagne
Sign In
Follow the stocks
