Brian Sullivan: Why the 'real' price of oil is likely $30-$40 higher than where it is now
Physical oil can cost about $38 a barrel more to deliver, as tanker rates surge.
TL;DR
- The real cost of oil is estimated to be $125 per barrel or higher, factoring in transportation expenses.
- Chartering supertankers has become extremely expensive, adding approximately $38 per barrel to the cost of oil delivery.
- Companies requiring oil shipments are paying substantial premiums over futures prices.
- Shipowner stocks have seen significant increases.
- Shell (SHEL) is highlighted as a strong performer with potential in liquefied natural gas.
- ConocoPhillips (COP) is recommended for its value proposition and diverse asset base.
- Refiners like ExxonMobil (XOM), Valero (VLO), Phillips 66 (PSX), and PBF (PBF) are expected to benefit from a diesel and gasoline shortage.
- First Solar (FSLR) is expected to benefit from tariffs, and TeraWulf (WULF) is seen as an attractive investment in the AI power sector.
- Europe's natural gas storage levels are crucial for winter, with weather patterns playing a significant role.