Good morning crew and a big oily welcome to all the new subs yesterday. We’re looking forward to proving this is worth your time.

Both Barrels is your daily dose of all things oil, gas, and energy, without the hot air.

Here’s what’s up:

• 🇮🇷 Overtures to Iran

• 🚗 Granholm’s EV road trip debacle

• 🥶 Shivering Europeans

plus a lot more. Let’s get to it…

📈 The numbers

Brent has pushed above $91/bbl as the market remains as tight as your old jeans from ten years ago.

🗞️ Well-headlines

 🗽 North America

• In a bit of an about face, Tellurian has said it will now pre-sell cargoes from its long delayed 27.6 mtpa Driftwood LNG project to non-equity holders. Last year Tellurian cancelled a supply deal with Vitol, saying it wanted to focus on selling equity stakes in the project instead. Looks like there weren’t enough takers for that approach.

• Gas volumes supplying Freeport LNG, the second largest in the US, fell substantially over the weekend from 1,640 mcf/d to 284 mcf/d before recovering slightly yesterday. It’s unclear why - unplanned technical outages at the facility perhaps - but it comes at a nervy time for LNG markets as workers strike in Chevron’s Australian facilities.

• A dispute over the route of the Trans Mountain pipeline expansion in Canada could delay the start of the project by 9 months. The 590 kb/d pipeline, which will carry oil from Canada’s oil sands to the Pacific Coast, was due to come on stream in Q1 24 but has been met with opposition from indigenous communities over a last minute route change.

🏰 Europe

• Eni has issued a first-of-its kind $1bn “sustainability” bond. What on earth is that? Well, Eni has to pay out an additional 0.5% of the nominal value of the bond to bondholders if it doesn’t reach renewable capacity targets and Scope 1 & 2 emissions goals.

• Ithaca has acquired from Shell the remaining 30% that it didn’t already own in the Cambo oilfield, offshore UK, for $78m. The field is the second largest undeveloped discovery in the UK North Sea.

🕌 The Middle East

• Saudi Aramco has relaunched an EPC tender process for the $1.8bn expansion of the giant Zuluf offshore oilfield. Last month, Aramco cancelled three mega EPC contracts awarded to McDermott, apparently due to a lack of bank guarantees from McDermott.

⛩️ Asia

• China’s Sinopec is in the market for 12 additional cargoes of LNG for this winter. Due to Covid cubs, Chinese LNG imports fell 20% last winter but this new tender suggests that the world’s biggest LNG buyer is ramping back up again. Hold onto your hats.

📍Everywhere else

• South Sudan has come to its senses and reversed a decision to nationalize its oil fields. Landlocked and newly-ish independent South Sudan currently produces about 150 kboe/d of oil but its oil exports are vulnerable given they are all piped through warring Sudan.

🌍 Geopolitics & macro

• The US has approved a deal that will release $6bn of Iranian funds held abroad, and enable a prisoner swap - five prisoners apiece - between the US and Iran. We’ve written previously about how the US seems to be easing its stranglehold on Iran, despite no official JCPOA v2 being reached yet, so this deal doesn’t come as a huge surprise. Why the softening? I’m sure the US would be very happy to see more Iranian barrels reach the market…

• Venezuela’s President Maduro is on a charm offensive around China trying to secure more support for his beleaguered country from its largest creditor and key oil customer. Venezuela apparently owes over $10bn to China but its dire economic situation and floundering oil sector means this debt is unlikely to be repaid anytime soon.

💨 Carbon, Climate & other energy stuff

• The world’s largest lithium deposit may have been discovered in a volcanic crater in Nevada, US. The supply of lithium, an essential component in many batteries, including for EVs, phones etc, is concentrated in just a handful of countries like Australia, Chile, and China, so a major discovery in the US would be a boon for the domestic battery industry. But, the US is quite good at blocking new mines, ironically on the grounds of environmentalism, so let’s see how long it takes before this lithium sees the light of day.

• 9.3% of the EU population, ~42 million people, couldn’t adequately heat their homes last winter according to a new Eurostat report. This is Europe. In 2023. We have the resources, we have the ability, but we also have an incompetent political class. A reminder that the cold kills far more people that the heat. Reports like this reveal the human cost of energy ignorance.

• Europe’s solar industry has warned of bankruptcies among manufacturers as it struggles to compete with Chinese supply and falling prices. Solar PV module prices have reportedly fallen by ~25% this year. Welcome to globalization.

• The head of the IEA says the agency forecasts that hydrocarbon demand will peak before 2030. It’s the “the beginning of the end”, he said, again. Sure. I wonder if the billions in the developing world would agree.

🛢️Bottom of the barrel

What do you do if you’re the US Energy Secretary and you want to draw attention the quality of US EV infrastructure?

You plan a 4-day EV road trip. Bring some cameras, load up on Fleetwood Mac, and let the good times roll.

Nice idea. But it hilariously backfired for the hapless Jennifer Granholm who set out in a small convoy of EVs, joined by minders in gasoline SUVs.

In a move that belied her own faith in the infrastructure she’d set out to endorse, she sent one of her flunkies in said gasoline cars to speed ahead and bagsy an EV charge spot for when she arrived. A politician shouldn’t have to deal with trivial worries about wait times and charger availability, of course.

It gets better. Another EV driver waiting to charge their wagon (presumably for a while) was so miffed by this affront that they called the police.

The situation was eventually resolved but not after poetically demonstrating one of the many challenges ahead for widespread EV adoption.

Smooth trip then Jennifer?

👋 Before you go

Spread the word. If you like this, please do us a solid and forward Both Barrels to your colleagues, drinking buddies, lovers. They can join the crew for free here:

Tell it to us straight. Got any feedback, requests, terrible jokes? Please just ping a reply to this email and let rip.

Thanks for reading. Have a day out there. 🛢️🛢️