Strait Talk and the Impact on the Market

In this episode, we explore the latest developments in the oil and gas industry, including geopolitical tensions in the Strait of Hormuz, market updates, and industry insights. Join us for a detailed analysis and practical insights into current market dynamics and industry challenges.

Key  Topics

Geopolitical tensions in the Strait of Hormuz
Oil and gas market updates and trends
Impact of international politics on energy prices
Industry challenges such as regulation and social issues
Market analysis including rig counts and commodity prices

"AI is changing the industry."
"The Strait of Hormuz remains a major concern."
"The Strait of Hormuz is still a problem."


Chapters

00:00 Introduction and Technical Challenges
00:14 Geopolitical Factors Affecting Oil Markets
01:14 Conclusion and Reflections
07:16 Industry Spotlight: Oil and Gas Pricing Trends
11:26 Corporate Social Responsibility in Oil and Gas
12:56 Audience Engagement and Future Plans

 resources

Pump Jack Apparel - https://www.pumpjackapparel.com
Crude Logic Show - crudelogic.show

Transcript

SPEAKER_02 0:00

All companies are spending billions on technology. AI is changing the industry. And somehow, Karen from Accounting still needs you to print, sign, scan, and email one PDF. Today is July 2nd, 2026. And this is crude logic.

unknown 0:16

Welcome to the show.

SPEAKER_02 0:20

Let's go ahead and get into the market update.

SPEAKER_01 0:21

So for the market minute today, West Texas is sitting at 68 even. That is down 2.16% from yesterday. Brent's at 71.18, down 2.4%. And natural gas is at 321%.

SPEAKER_02 0:35

Okay, so at the pump, the current national average for diesel is 486, which is down from 501 last week. The gasoline prices today across the nation on average is 386 a gallon, which is down from 393 a week ago. So diesel's falling a little bit faster than gasoline, but we all know there was room for that. U.S. talks are still continuing with Iran over the Strait of Hormuz. They have apparently eased immediate fears of major disruptions for the Strait of Hormuz. Tankers are still moving through, so I guess that's kind of keeping the market at bay. OPEC is expected to increase production targets, adding more barrels to the market and helping keep prices from spiking. So that's a good thing. We need to try to keep the prices down, but everything really just needs to kind of be balanced. So Iran's still wanting control of the shipping lanes. They're still pushing that really hard, which I don't understand what makes Iran think that they can patrol the Strait of Hormuz. I mean, there's surrounding countries there, and we all know that if they're able to or are allowed to toll, like in some legal international way, if they're allowed to do that, then you're going to see all the Strait of Gibraltar and all kinds of other straits around the world start seeing this. Um so it kind of destabilizes this whole concept, in my opinion, destabilizes not only that region, but the entire globe when it comes to oil and gas market supply.

SPEAKER_01 2:13

So do we do that with the Panama Canal? I've never really looked into it, but I assume that we, you know, we built it, so I'm sure we have some.

SPEAKER_02 2:20

Yeah, well, the Panama Canal was built specifically for that purpose to shorten shipping lanes or travel. So it's kind of agreed upon because it was uh uh built and it's not a natural passageway. At least this is what I think that it tolls were already set up for that. Like I I'm pretty sure that the Panama Canal, the whole intent not was to increase speed of shipping and things like that, but uh there's also, you know, it's a I've been to Panama, I've seen the Panama Canal, and it's got like these this locking system where you you know ships come through. It's it's not like a huge body, like it's literally like a lane for for ships to pass through. Um there's one, I'm assuming there's one on each side, like you can get two ships next to each other. I think so. I I honestly it was like nineteen eighty something, late eighties. You're old, dude. I'm so so old. Anyway, my point is that it was designed for tolls. So it's kind of internationally known that you go through the Panama Canal that you're gonna have to pay a toll. Or it's just like any other toll road, right? Like you with the Strait of Hormuz or Hormuz.

SPEAKER_01 3:40

Yeah, and it's it's like straight is the Strait of Hormuz, I've heard like so many analysts say it differently.

SPEAKER_02 3:45

Hormuz or moose I think it's it's it's regional dialect because some folks back home in Oklahoma. Straight of hoes. Yeah, they'd they'd be like that straight o hormuz up an ar, you know? Uh but anyway, the Strait of Hormuz is sort of a one-way in, one way out, natural occurring thing. And so there's nothing anybody can do about that. It wasn't man-made for that purpose. So you literally go in, you gotta turn around and come back out. So they get you coming and going. There's not like a shortcut that you can take.

SPEAKER_01 4:22

Well, there's a uh on the shortcut front, I I mean, you I'm sure you saw this, but they were talking about just a few weeks ago before all of the peace talk started, they were gonna dig you know, trench basically across uh what country is that?

SPEAKER_02 4:36

Is it Oman?

SPEAKER_01 4:38

That sounds right.

SPEAKER_02 4:39

Oman is the one that sticks out that that is on the other side of the Hormouth that kind of makes it sort of a bottle. Yes.

SPEAKER_01 4:48

Yes, that's the one then. Yeah.

SPEAKER_02 4:49

Yeah. So I'm I mean, I'm sure that project will happen fast, especially if it's a government contract.

SPEAKER_01 4:55

Well, it kind of depends. I mean, I saw that there's a bridge that collapsed in Japan and uh like on a Wednesday, and by Monday they had the entire bridge rebuilt. Um now. They've been working on I-20 in Midland here for like uh 12 years, I think.

SPEAKER_02 5:09

Is that a real story?

SPEAKER_01 5:10

I don't know. It's what I I had I don't know. It was a TikTok video, brother. I couldn't tell you. I didn't look it up. I was like, interesting. Yeah, it sounds about right.

SPEAKER_02 5:19

That sounds awful fast to put another bridge up. Uh so anyway, Iran still once controlled the shipping. You still got Russia and Ukraine going on. Even though oil experts are improving global LNG markets, they're still feeling the effects of earlier disruptions. So uh the Strait of Hormos is a is obviously a big deal, but we have all sorts of geopolitical things occurring across the uh globe that are creating instability. I mean, the Ukraine-Russia war, especially with these new developments of the Ukraine drones. And, you know, you saw that they recently had a pretty massive drone attack on Moscow.

SPEAKER_01 5:59

Yeah, I heard about that.

SPEAKER_02 6:00

Ukraine's able to reach out and touch them, touch somebody. But my whole opinion is that uh, and people think I'm crazy, but I think Zelensky and Putin are in on this together, and I think they're laughing all the way to the bank because there's no other reason why this war would go on as long as it has. So, my opinion, of course, take it or leave it. Another thing that's affecting the markets, China's predicted demand was softer than expected. So, um, you know, a lot of factors, a lot of things going on. The bottom line is that the Strait of Hormuz is the biggest deal right now, and we still don't have any solid agreements. This memorandum of understanding is about as good as a roll of cottonell to me. Like what is that's like getting a letter of uh commendation or something like thanks for recognizing me, but can I get something else?

SPEAKER_01 6:51

I don't know. I don't know if it's just because like social media and how things how fast things are in today's world, but I'm getting bored with it. Yeah, it's been on the news for like three weeks.

SPEAKER_02 7:04

Like my first high school girlfriend. On again, off again, on again, off again. But mostly off. So, anyway, that's today's straight talk. It's funny how the Strait of Hormuz is anything but the price of gas being you know, we've talked about before, hundred dollars a barrel might not be good for all of us at the pump, but it's more than reasonable for what it takes for us to extract it from the ground.

SPEAKER_01 7:32

So $70, I mean, not to get into politics and currencies and all of that stuff, but we've printed a bunch of money in the last five years, more than we have printed for the entire country's history up until the last five years. So if you got a bag of bananas at the store and it's three dollars, if they print double the supply, that banana bag of bananas cost you six dollars, that hasn't happened with oil yet. So I think that just basic math and common sense, I think we should be almost double the price that we're currently sitting at in the market today. Like $150 is not crazy high. It is crazy high. Yeah. Like it it's not it's not gonna get there, I don't think. They'll they'll pull mechanisms and you know increase supply, whatever they need to do to keep it. But back in the back in my day, it was supposed to be, you know, thirty dollars way back in the day, thirty dollars was like the breakeven price for a uh production, you know, for a for an operator to get thirty dollars a barrel, they were at break-even. Then in the you know, twenty twelve to twenty seventeen or whatever, it was like sixty, sixty-five, maybe seventy would be great. Now I'm sure they're still breaking even at seventy, but it's gotta be real, real close.

SPEAKER_02 8:56

The average person looks at that and goes, you know, they watch the news and they see, oh, well, it's it's a hundred dollars a barrel. You know, like I didn't really like the fact that Trump came out and said the oil companies need to quit price gouging.

SPEAKER_01 9:10

As he charges $700 a night to stay in his hotels. I like Trump, but that's like, you know, it's only price gouging when the other guy's doing it.

SPEAKER_02 9:17

It's that's the thing that frustrates me is that that plays in to the other half of the political people in the country that are against oil and gas. You start throwing things out there like oil and gas companies are price gouging. So there is a sweet spot where people can still afford to drive, but oil companies still make money.

SPEAKER_01 9:42

If you don't like how high oil prices are, go open your own oil company and price your barrels lower.

SPEAKER_02 9:46

Here's another thing that I've never understood, and this is just a little sidebar thing. We've seen commercials for Devon and Shell and all that stuff. What are they marketing? I mean, guys, we need what you're making.

SPEAKER_01 9:58

They want everybody to love them. And it gets out like Chevron specifically, they have in Midland, Texas, a giant trans flag on their like a gay pride trans pride flag at their headquarters here in Midland, flying right underneath the American flag.

SPEAKER_02 10:19

What?

SPEAKER_01 10:20

Yeah, not so is it above the Texas flag? The Texas flag wasn't there. It's just what I mean. It was for the whole month of Pride Month, it's gone now. But for the they took the Texas flag completely down. Yeah, the American flag and then the Pride flag.

SPEAKER_02 10:35

Come on. And you couldn't like What's up, Texas?

SPEAKER_01 10:38

I don't know if you've ever been to um their facility's fairly new. I'm sure in Midlands someone would have taken it down if anybody could get to the flagpole. But it's been a there's only one way in. It's through a gated, you know, or security gate with a gate guard and all that good stuff.

SPEAKER_02 10:53

So I'm just surprised that anybody in Texas, maybe not anybody, because there's some crazy stuff going on in Texas like there is everywhere else. I was blown away by it, honestly. Okay. Well that that is uh uh an issue. I don't think they should have fly that flag at all personally, but I can see them trying to, you know, please everybody or whatever. But why anybody in Midland, anybody who happens to listen to this or watch it comment on our episode and tell me if I'm wrong. But I just don't think that most Texans are for that, and I'm pretty sure that most or all of people in Midland are not for that, barring a few exceptions.

SPEAKER_01 11:39

To some extent, I understand it because there's a lot we do in our industry to get um, you know, to keep the planet healthy, to make sure that we're not doing um contaminating water. Like there's there's so much stuff in the media and the Netflix documentaries and all this nonsense that's mostly fiction fabricated to make us look bad.

SPEAKER_02 12:02

So you'd think it's a counterintelligence sort of pain.

SPEAKER_01 12:06

I mean, just something to make it known that we're you know, usually trying to protect the environment. I mean, yeah, there are things that happen.

SPEAKER_02 12:13

There are spills, there are nobody's more heavily regulated than this industry.

SPEAKER_01 12:18

We take it very seriously, we clean it up as quickly as possible, and it's it's mother nature, it's bound to happen, you know.

SPEAKER_02 12:24

It's like I mean, most of these places are making sure that they make it look better than it when they showed up. Most of these operators and some of that's by requirement. Some of it is just taking that extra step. Yes. So basically the biggest takeaway from today is that the Strait of Hormuz is still a problem. It looks like it's going to be a problem for the foreseeable future, and we're all just going to have to buckle up and take the ride. So we'll keep everybody updated as to what the new headlines are. Every day, whenever we post this, we're going to have new updates. And, you know, I'm sure a lot of you people are watching news and everything else, but we hope that you'll tune in to us, listen to us. Hopefully, we will uh entertain you a little bit more than the news. We might put you right to sleep. Who knows? But try it out. Give it a try. So we'd like to thank our sponsor, Pumpjack Apparel. Check them out at pumpjackaparel.com. The music for our intro and outro is provided by Whitewater Ford. Check them out on Apple and Spotify. If you want to see more of us on social media, you can find us at crude logic show. That's our handle. Uh, please remember to like, follow, share, subscribe. We're uh we're getting a pretty good response from everybody. So we really appreciate everybody that's already subscribed. Remember, stay safe, keep drilling, and it's only logic if it's crude logic.