Member Info for Tonyb33

Cushing has hit 20m barrels that's the tank bottom. The recognised tank bottom for the strategic oil reserve is somewhere between 270 and 300m barrels. The last reading Monday 340.251 prior week 349.192 that's a utilisation of 8.941m barrels in a week. On that basis tank bottom will be hit between 4-7 weeks. So that's mid to end July 2026. Currently its estimated that there is 60m barrels loaded on ships ready to leave the Gulf. That represents 6 normal days of production but call it 40 tankers which will take some time to leave. The Iranian ships will be going first. After that we will be waiting on empty ships willing to enter the Gulf. Which very few will do until the mines are lifted I believe the Iranians who have an alternative mine free route and are enjoying premium rates they will be taking their time on this role. What will the counterparties say if after 40 days the Iranians tell them we are still working to clear the mines its tricky because you destroyed the records and the boats and men that laid them. We need more time. This will delay both empty tankers entering the gulf and prevent storage being cleared so production can restart.

The last tanker of jet fuel that left the Gulf before war started for the UK arrived in the UK on 06/04/26 a journey of 5-6 weeks. There are 83 barrels of paper oil for every physical. It will be very tight so long as nothing goes wrong. However my call is that the US did the maths and then blindly signed the MOU. As Trump said if they do not stick to it we can always bomb them again. All the downside has been priced in but no upside.

The good new for Tullow is that these lower oil prices are driving down hedge costs. Tullow have two cargos in July and August. I believe by the time comes to sell these cargos the price of oil for immediate delivery will be at a premium. The proceeds of these sales will make a dent in November when the cash sweep reduces the senior debt.

My bad Cushing is not going to hit tank bottom on Friday...It hit it last Friday. As we speak the moveable tank lids at Cushing are being damaged as they slam into the tops of the legs supporting the tanks. To date this market has worked on 83 paper barrels being traded for every real barrel of oil. The problem is the last place with oil ie Cushing officially has no oil. In 3 weeks the 400m barrel emergency reserve released ...will be released.

Hmm I wonder what Iran might do now its relieved the pressure on its storage tanks and is till looking for lost mines, as Israel keeps bombing Beirut and extended Greater Israel into Lebanon, Syria and Gaza. Its a mystery.

@Lenin I may be wrong that number is the Drawdown for WE 05/06/26 800k barrels to 21.6m barrels. If we have another 800k barrels to WE 12/06/26 which is due out today and we have a similar draw this week (not unexpected because oil usage increases from June onwards due to AC and driving season then Cushing is down to tank bottoms on Friday 19/06/26

We are now starting to hit driving season and AC crank up consumption will increase from now on.

Sorry that should read Cushing stock level at 05/06/26 21.6m Barrels

MOU agreement signature date 19/06/26

Cushing (the stock index for WTI) official tank bottom 20M barrels

Cushing oil consumption to WE 05/06/26 800k Barrels

Cushing Oil level at WE 05/06/26

How many days at current consumption levels for Cushing to hit 20 M Barrels 14

Projected date Cushing hits tank bottom 19/06/26

Its probably just a coincidence

@Lenin correct

Note Cushing Hit 21.6 M Barrels on 05/06/26 it had dropped 800 MB from the prior week. The next stock level report is tomorrow at similar stock usage expect 20.8 MB. But that will be for WE 12/06/26. At the same rate (and the rate should accelerate into the driving season and summer AC demand) we will hit 20MB on 19/06/26.

They are only starting demining the strait we will not see significant oil flows for another 5 weeks that's another 500mb gone. That's if everything goes well.

Per Gemini

20 million barrels is widely considered the "operational tank bottom" (or operational floor) for the Cushing, Oklahoma storage hub. While the physical bottom of the tanks represents the absolute limit where only unusable sludge, sediment, and water remain, the 20 million barrel threshold is the point at which serious operational and structural problems begin. Here is why 20 million barrels is treated as the practical "tank bottom" by the oil industry:

1. Physical and Structural Limitations

Cushing utilizes large, external floating-roof tanks. If the oil level drops too low, the heavy roofs can no longer float safely. They must land on structural legs at the bottom of the tank. If a tank is drawn down past this point, it risks damaging the roof infrastructure.

2. Pipeline Pressure and Flow

To pump crude oil out of Cushing and into major pipeline networks supplying refineries across the Midwest and Gulf Coast, operators require a minimum amount of volume to maintain adequate hydraulic pressure. When total hub inventory drops below 20 million barrels, maintaining the pressure necessary to keep the oil moving smoothly becomes incredibly difficult.

3. Blending and Quality Issues

Cushing is a major hub for blending different grades of crude oil to meet strict West Texas Intermediate (WTI) specifications. When inventories scrape the operational floor, there isn't enough fluid volume to properly mix and blend the oil. Furthermore, drawing from the very bottom of the tanks risks pulling up lower-quality "heel" oil, which contains water, heavy sediments, and sludge that refiners cannot easily process.

Current Context (June 2026)

This threshold is a major focal point for energy markets right now. Due to recent global supply strains and surging U.S. exports, Cushing inventories have dipped to roughly 21.6 million barrels. Because the hub is drawing down at a rapid pace, the market is closely watching that 20 million barrel line. Breaching it doesn't mean Cushing has literally zero oil left, but it does mean the hub hits a physical bottleneck where it can no longer efficiently supply its customers, creating a massive logistical squeeze for the broader energy market.

A few other reasons

1. The war broke out in the 3 months between heavy winter consumption and the summer heavy AC/Driving consumption. It was a period that naturally had reduced consumption.

2. If you look at Cushing inventory level you can see as June kicked off consumption rapidly increased. For the week ended 05/06/26 the cushing stock level fell 800k barrels to 21.64m barrels. Sounds a lot but 20m barrels at cushing is considered tank bottoms as the last 20m barrels generally considered the sludge in the bottom of the tanks. At 800k per week that means Cushing hits tank bottoms in 3 days time. No wonder Trump was keen to sign.

3. With China out of the market the West African premium fell so did the spread of PDB over Brent August Future. With the agreement signed lower oil at paper oil pries those premiums should rise I notice the PDB over Brent Futures rose to about $5 yesterday. Tullow has sold its June cargo and did so whilst missiles were flying as such it got a good price. Its next cargo will not be until early July. Tullow has 4 cargos in the July August period the Strait will be still be in disarray even if everything is going to plan. As such with premiums I expect they will get $100+ for those cargos more if the fighting kicks off.

4. The agreement signed is not an agreement but rules on how to discuss an agreement. I think this is a sticking plaster to help Trump with the elections period and the 250 year anniversary of independence. I expect this thing to kick off again especially as the first thing Iran will do is to empty its storage tanks to free up 3 months oil storage for another fight. By that time I think the USA will have got out and left the rest of world to sort out a long term simmering insurgency

5. Finally what these lower prices are doing is not affecting H1 2026 sales they are already booked. What it has done is to reduce the hedging costs by $150-200k per day until the end of the month to boost H1 2026 profits. The fact that directors are buying shares at much higher prices than current and have done so in the last few weeks shows confidence in the company.

But Tullow is not selling oil in the 80s. The price you are quoting is a futures price for end of August settlement. Tullow's next cargo is not until early July. Even under the MOU its not to be signed until Friday. Then there is a 30 day grace period for Iran to remove their mines. So that's late July before the Strait opens on the basis that nothing goes wrong. A tanker load of oil for immediate delivery will be getting a premium price in July even under the best situation.

So far every time Tullow has had to sell a cargo war suddenly breaks out and they get premium prices. Which is what happened when they sold their June cargo on 08/06/26. Meanwhile the price suppression is reducing their hedging costs. Their hedges are $150k a day cheaper at these lower oil prices

So where are we despite Trump’s promises we do not have a signed agreement. Even worse we have not actually seen a copy of an agreement that everyone actually agrees terms. Israeli politicians are publicly stating they will not be held on Lebanon. Even if they actually did agree peace as in Gaza the killings are still on going.

As to the agreement its actually not an agreement it’s a Memorandum of understanding (MOU) it’s a set of terms to stop active war whilst an agreement can be made over the next 60 days. Meanwhile the Strait is still mined. The MOU calls for the Strait to be opened within 30 days of the MOU being signed. So we wait a week for the MOU to be signed then 30 days for the mines to be removed. The US navy is on record saying they think it would take 6 months to remove the mines. So what happens in 35 days from now when the Iranians have emptied their tanks and shipped their oil via the narrow seaway on their coast but everyone else is still waiting for the mines to be removed. If all the mines are not found the Iranians will be the only country that can ship oil.

Once the Iranians can ship oil they will empty their storage tanks and be in a position to hold out for another three months. I suspect some of the mines will be lost and need looking for. Meanwhile Lloyds will be saying no insurance for passing over active minefields. Iran knows the longer this goes on the more desperate everyone will be and they will get the better terms.

We are currently looking at the prices of Brent August oil futures whereas Tullow sells on Platts Dated Brent ie we actually have oil and we can ship it immediately. I think these two prices will drift apart. Tullow is going to be selling 4 cargos over July and August. By that time Cushing will be below 20m barrels essentially sludge in the tank bottom. By mid July the 400m barrel emergency reserves release will be over. Tullow will have a window to sell those cargos at a premium.

Meanwhile the lower oil prices actually benefit Tullow as their June cargo was sold whilst Israel and Iran were exchanging missiles so the lower prices will reduce their hedging expenses which are calculated on a daily basis.

SP popping up I think now its week 16 of Trump Bingo people are starting to think I wonder what's going to happen on Monday. If in doubt get your trump Bingo card ready.

There are 83 paper barrels to every physical barrel on the futures market. Add in the fact that it is rumoured that the white house team are working in tandem with the orange man to suppress physical oil prices. The reality is the three parties are playing three games. Israel is working on an expansion policy the Yellow Zone in both Gaza and Lebanon are steadily expanding alongside new settlements in Syria. The Iranians will not give up the Strait nor their nuclear weapons. As for Trump I think he was lead to believe Iran was on a par with Venezuela you could remove the head and take over the oil resources.

My read is that the Iranian's need a lot higher oil prices to maintain their country which will be even higher after their wells have been shut in as last time that happened they lost a third of production when they reopened. Iran will disrupt oil flows to maintain high OP. Israel is taking advantage of the distraction to take over Lebanon, the West Bank and Gaza and wants this thing to play on indefinitely (or until they take over Saudi Arabia as that is on the Greater Israel real estate map). I think Trump just wants it to end and has a tiger by the tail.

Hi @xxnjr

I project the next four Jubilee cargos

KOS 21/06/26

TUL 04/07/26

KOS 17/07/26

TUL 30/07/26

I know we will not have a full month from J50P by end of July but if you could confirm when these cargos actually sail we will be able to estimate the impact of the new wells

Hi @xxnjr

Yes I have been looking at that. I am getting an issue with Tullow they seem to be issuing ambiguous statements.

1. Their recent guidance on price per barrel pre and post hedging was fudged. They effectively gave the prices for cargos actually sold not produced but reduced that by the physical cost of hedging which is on a daily basis, its not comparing like with like. As the May production (which was shipped in very early June) was not included in the sales but the hedging was.

2. I have now tweaked my models in line with latest guidance. If you knock off the gas 7.3/bpd (43.1-7.3=35.8) you get 35.8 bpd for the first 5 months my /model shows 35.768. I have J76P kicking in 7/6/26 and J77P 23/6/26 and J50P 15/07/26 they should kick in an extra 20kbpd (Between all three wells) with an amortisation rate of 1.67% month. Again with the rest of the field also amortising 1.67% per month that will produce 13,928,241 barrels of oil. Enough for 13 jubilee and 3 TEN cargos. I cannot help thing when he said 10 Jubilee he actually meant 10 in addition to the three already produced.

Even is we ignore the three new wells producing an additional 20kBPD starting June July and project the delivery sequence every 13 days. That would mean a 12th Jubilee being shipped 01/01/27. So the oil would not be in sales but it would be in the stock adjustment. I think they are low balling.

Its Friday so the US have announced a peace agreement

1. The Algos have sold off oil

2. Its all agreed apart from the Ayatollah he does not agree either and Hezbollah certainly does not agree

3. Never mind Tullow is not selling oil this week but the lower oil price will reduce its hedging costs

4. Just like last Friday err isn't this the same peace agreement that Friday three weeks ago VP Vance would be finalised in hours

5. The US hit Iran with a missile, Iran returned a missile to a number of US bases but it was intercepted but they did hit Kuwait international airport (again). However they did manage to down a helicopter.

6. An 3 Iranian tankers entering the gulf was fired on a hellfire missile through the engine compartment 3 Indian engineers died

7. Israel fired missiles at Tyre (Tyre is not Beirut so killing Lebanese here is OK)

Please watch for Trump Bingo

1. Tomorrow War week 16 commences fighting restarts Monday

2. Oil up Monday

3. Tullow up Monday

4. Israel fires missiles at Tyre

5. Iran shoots missiles at ships and UAE

6. USA bombs missiles and disables Iranian tanker

7. VP Vance says we are just waiting on finalising the deal

8. Another 100m barrels of oil reserves are used up

9. We are 4 weeks from tank bottoms at Cushing

10. This message will automatically reset for war week 17 in 7 days time

What's also interesting about these projections is what it tells us about the impact of the new wells. At the start of 2026 the Jubilee was producing a cargo around every 14 days. As the new wells have kicked in its dropped to 13 and with the new June & July wells the cargo has to drop to 12 days to hit 13 cargos. As such the H1 numbers will no reflect the true story as the H1 numbers will only have 5 Jubilee Cargos two of which will be pre war price, but will be subject to six months hedging costs. The H2 numbers will have 8 cargos and will be post war price but with only 6 months hedging costs. Equally the H1 numbers will only have 1 TEN cargo the H2 a further 2 plus a stock adjustment for another 0.5.

They are saving the best until last.

O Dear I think that Orange tanning liquid is entering his bloodstream

Trump praises naval blockade, claims Iran becoming a ‘failed nation’

The US president, in a new post on Truth Social, has accused “fake news media” of not reporting how effective the ongoing US blockade on Iran is, calling it the “most successful Blockade in the history of Naval Warfare.”

“NOTHING GETS THROUGH unless we want it to. IT IS A STEEL WALL!” Trump claimed.

“Iran is doing ZERO business, not paying their military, or any of their bills, and quickly becoming a FAILED NATION! Lots of oil is getting out. Praise be to Allah!,” he added.

Separately, in an interview with Fox News, Trump said he was getting close to ordering new strikes targeting Iran’s power plants and bridges if Tehran is unwilling to sign an agreement.

Hi I have tweeked my models for the guidance

It needed slight adjustment I was ambitious in factoring in a full months production for new wells and slightly heavy on the West Africa Premium as well as taking the day of lading as a sales price instead of the average of four days around the day of lading as the sales price. What is clear is that the sales per the guidance is simply that sold in the five month period Ie Jubilee sales Jan - April Jan 893,661 barrels Feb-Apr 888,033 X 3 plus the Feb TEN cargo 930,441. They have not included the oil produced in May because it was sold early June.

The Hedging is calculated against average PDB prices on a daily basis so it reflects the actual hedging costs for Jan May.

So actual Barrels Produced Jan May 5,397,524

Actual Barrels Sold Jan May (Effectively 01/01/26 - 01/05/26 4,488,201

Pre Hedging sales proceeds $431,868,729

Hedge Costs 01 Jan- 31 May 2026 $ 33,951,441

Post Hedging Sales $ 397,917,288

Pre Hedge 96.22/Barrel

Post Hedge 88,.66/Barrel

But now add on the oil produced in 2026 and not sold The oil missing (5,397,524-4,488,201) and price it at the price achieved in June 26 $116/Barrel that's an extra $105,481,443 of revenue to May 26.

With this extra uncounted revenue for the five months to May thats

5,397,524 Barrels

Pre Hedge $99.55/Barrel

Post Hedge $93.26?Barrel

They seem to be hiding their light under a bushel. The target for 2026 is 13 Jubilee cargoes and 3.5 TEN. On viewing shipping logs and reading reports Jubilee should be producing over 1 cargo a month. From looking at the shipping logs the May 2026 Jubilee production was shipped 08/06/26. However guidance is showing production to end of May as only 5 cargos ie the TEN cargo that went in February 2026 and the 4 Jubilee Cargos from Jan to April. They have averaged them which will produce a low figure because 3 of the 5 were in the Jan Feb period before the war started. They then have netted off the hedging costs for Jan May to give an average post sale figure per barrel.

This is misleading the hedging costs for Jan Feb were only $65k in total. The hedging costs kicked in as the price of oil rose over $90 a barrel. and so were in the $10m + range for March-May 26 period. But the average revenue per barrel figure does not include May 26 production because it was sold on 08/06/26.