Saudi Arbian Spending Spree?!

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Highlights of the Podcast

00:00 – Intro

01:52 – Saudi Arabia Spends Like Oil’s Still at $90

04:10 – Republicans Push to Refill the Strategic Petroleum Reserve With $1.3 Billion

07:42 – Texas Laws Aim To Stabilize ERCOT Grid By Leveling The Playing Field Among All Power Generators

10:42 – Can the UK avoid the Spain Blackouts? Or are they doomed?

5:44 – Markets Update

18:54 – Is Shell Sizing Up Oil’s Biggest Power Grab Yet?

22:14 – Outro

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Stuart Turley: [00:00:00] U S government thinks in the next election cycle, and that to me is despicable. I would put in here, Michael, that we need to have Congress take the SPR out of the ability of the president to absolutely use it as a political tool and treat it like a strategic. [00:00:21][21.3]

Michael Tanner: [00:00:23] Reserve. Yeah, it’s I mean, I’ve heard both sides of the argument that the SPR is damaged. I’ve also heard from people I really trust who are who I would say are Trump fans that the SPRs not actually damaged and that it’s that’s part of the degradation of these salt domes is that it just going to happen over time, whether or not they’re filled or not. What’s going on everybody? Welcome into the Tuesday, May 13th, 2025 edition of the Daily Energy Newsbeat Standup. Here are today’s top headlines. First up, Saudi Arabia spends like oil still at $90 a barrel. Next up, Republicans push to refuel the Strategic Petroleum Reserve with 1.3 billion. In additions. Next up, Texas law aims to stabilize aircott grid by leveling the playing field among all power generators. Finally, we’ll bump over to the UK. Can the UK avoid the Spain blackouts, Or are they DOOM? Stuart, toss it over to me. I will quickly cover what happened in the oil and gas markets and touch a little bit more upon the potential Shell BP merger. We’ve been talking about it for months now. And finally, Reuters picked it up. So we will cover all that in a bag of chips, guys. As always, I am Michael Tanner joined by Stuart Turley. Where do you want to begin? [00:01:52][89.3]

Stuart Turley: [00:01:52] Hey, let’s start with our buddies over there with Saudi Arabia and this article is actually from Irina Slav over at oilprice.com. We love Irina and her insights. We love oilprICE.com and just let me go through these bullet points here. Saudi Arabia faces fiscal strain as Brent crude prices remain below the $90 to $96 barrel needed to balance its budget. With a projected 2024 deficit of 5% of GDP. Michael, holy smokes, Batman. Despite non-oil sector growth, Saudi Arabia’s economy remains tied to oil. Riyadh may tighten its spending or raise taxes while analyst warns the deficit. Could exceed $67 billion if Brent averages $62 this year. Holy smokes, what a great article. [00:02:48][55.7]

Michael Tanner: [00:02:49] No, great article. As you said, we love Irina Slav, but what’s interesting is that they’re the ones clearly behind driving the price down. And so I get all of these articles coming out and saying, they’re still spending like $90 oil. They’re still spending. They’ve got break fiscal break even prices above 90. Well, clearly they don’t care or they’re down to take out debt in order to keep oil prices low. So it is a little bit of like. Okay, sweet, but that doesn’t necessarily change what they’re doing now. [00:03:19][30.3]

Stuart Turley: [00:03:20] It doesn’t. In fact, I’m trying to take a look at and writing some articles and figuring some of this stuff out And I think RT’s got one over at the crude truth coming out tomorrow on what he thinks is going to be that So we’ll publish that one out there and taking a look yet how He thinks the oil prices he’s he’s got a pretty good insight as to what could be balancing out that number [00:03:46][25.9]

Michael Tanner: [00:03:47] Again, I will beat this dead horse until until it and I am dead I’m tired of hearing about fiscal breakeven prices in Saudi Arabia because clearly they’re willing to take Long and they’re really they’re will to take long-term pain in order to lower oil prices Why we can only speculate but you know, I would beat that horse till it’s dead and I pass out of heat exhaustion What’s next? [00:04:10][23.1]

Stuart Turley: [00:04:10] Well before I before you pass out a heat exhaustion and turn yourself into a nag a republicans push to refill those strategic oil reserve With 1.3 billion this will not impact the price at the pump. It won’t impact anything Because when you look at how much the Biden administration stole, I mean, printed money by ruining it, the proposed bill is $1.321 billion to refill the SPR and $218 million for maintenance and repairs caused by the rapid depletion of the SPL. Now, again, the advantage that Saudi Arabia has is they think in terms of decades. And the U S government thinks in the next election cycle, and that to me is despicable. I would put in here, Michael, that we need to have Congress take the SPR out of the ability of the president to absolutely use it as a political tool and treat it like a strategic oil. [00:05:18][68.1]

Michael Tanner: [00:05:20] Yeah, it’s, I mean, I’ve heard both sides of the argument that the SPR is damaged. I’ve also heard from people I really trust who are, who I would say are Trump fans, that the SPR is not actually damaged and that it’s that’s part of the degradation of these salt domes is that it just going to happen over time, whether or not they’re filled or not. So I’m going to throw a little bit of a wrench into the Biden damage, the SPR. Narrative just slightly it can’t it doesn’t help to not have them full but a lot of this is just degradation that happens over time considering that these are just salt domes i do love the fact that we’re getting in and purchasing it to me this sort of screams that you know the department of energy who has been screaming Chris right at the top of his lungs that we need oil at 55. He either thinks this is the bottom, because if he thinks oil was going lower, they would probably try to buy it for lower. So this may be a good signal that they feel like this is a quality price. And we this quote unquote, maybe the bottom not saying it’s shooting back up to $80 tomorrow, like Stu thinks, but it could mean that this is a floor that we might see for a while. And so bringing out some of this stuff is not a bad idea. I do love this quote from Brett Guthrie. This bill would also begin refilling the dangerously low strategic petroleum reserves. We can all agree it’s dangerously low from an energy security standpoint. [00:06:40][80.0]

Stuart Turley: [00:06:41] Absolutely. And I think it does not need to be used to lower it. Now, Michael, it lowered the price to 40 cents at the pump for consumers for a midterm election. That causes problems. [00:06:55][13.9]

Michael Tanner: [00:06:56] I’m saying, yes, I’m just saying there’s this narrative out there that the draining of the SPR caused structural damage to the strategic petroleum reserve itself. I’m calling a little bit of hogwash on that. [00:07:10][13.7]

Stuart Turley: [00:07:11] Well, let me say that the facts and the people that are in charge say that they can only pull in and out of those salt domes so many times because they are structurally, and that’s probably what they’re talking about as well too. You don’t want to be pulling them in and out. It’s not a in and turn it on and permanently. It is not a permanent solution in some of those domes. [00:07:37][26.8]

Michael Tanner: [00:07:38] That we can agree with. All right, let’s go to our the greatest state in the world, Texas. [00:07:42][3.7]

Stuart Turley: [00:07:42] I love me some Texas story, you know, now this one is from Ed Ireland, i love Ed Ireland. This is absolutely wonderful. And I recommend everybody follow edireland.substack.com. And when we take a look at winter storm, Yuri pushed Texas electrical grid to the brink within four minutes and 37 seconds from a total collapse, Michael, that’s pretty darn close. But the problem in Spain was Michael. They lost power for three seconds oops as power generation failed and electricity demand sky-rided since then ercott the public transmission commission of texas and lawmakers they weatherization requirements for power plants to handle extreme cold past and now here’s where it gets kind of fun if you take a look at this quote in here texans now pay the highest electricity rates in the south. 28% in just 4 years, and it’s not an accident. We’re shelling out, listen to this Michael, $2 billion a year to cover the reliability costs dumped on us by the wind and solar costs that they should be paying. Next year, over 50% of our reliable power, natural gas, coal, and nuclear will be 30 years old. Why? Because the market is rigged to favor more unreliable, subsidized generation. This is a huge bill, and I like the way that it’s phrased, because we’re finding out that it is not a good thing to have wind and solar on your grid. There’s a place for it, but not on your [00:09:25][103.1]

Michael Tanner: [00:09:26] Yeah, it’s, I’m, I can’t disagree with anything you’re saying. I mean, this is probably something that aircott should have done years ago, which is probably, you know, for, for everything that’s great about Texas, aircott is not one of the great things about Texas because they are, they, it is so much for getting them on the podcast. We can have a conversation about how terrible they are at their jobs. I mean we could be nice about. [00:09:50][24.4]

Stuart Turley: [00:09:51] I think they’ve done a great job, to be honest with you, in many ways, because they’re being forced by what the legislature shoves at them, so, you know, when they’re trying to balance it out. I don’t think that we should be allowing any more projects, and the way that the bills are written, I’ve kind of gone through them, is that they’re going to be requiring wind and solar to be paying for natural gas. Well, there’s a problem with the natural gas plant side of things is because that’s just going to add the cost to the consumers and any natural gas for the next four years, natural gas plants, turbines are sold out. Michael, we are in a national crisis here, Ro. So we got to keep these things rolling. The, the coal plants that are there and everything else. Yep. The last As I was saying, the last story, can the UK avoid Spain’s blackouts or are they doomed? Following along this one, I loved writing this story, Michael. This was kind of fun. Research suggests the UK needs significant grid updates to avoid blackouts like Spain’s April 2025. It seems that investments in transition, storage, and resilience are crucial. For 35 billion pounds. The evidence leads to more enhanced grid stability. But Michael, this goes along with the story that we’re going to talk about on your segment here in a second, and is Shell and BP going to be moving out of the UK? I would not want to be oil and gas company in the UK with their policies and everything else. And I, when you take a look at the overall analysis that I came up with in the plan, grids and fast tracking, 4 billion in grid development, Michael, for interconnects with other countries, energy security starts at home, but you cannot rely on other countries for your energy security. It just does not work. [00:11:58][127.8]

Michael Tanner: [00:11:59] No, absolutely. It’s one of the reasons why going back to our SPR story, it’s so important to have something like a stupid strategic energy reserve. And that’s really what it should be called strategic energy reserve, because there are multiple different ways to have this, but no, you’re absolutely right. My, my issue with the stuff that UK is going to do. Is it’s going to turn out to not necessarily solve the problem. They’re going to spend a bunch of money, spin a bunch of wheels, invest some tax and subsidies into what offshore wind? Shoot me in the head. [00:12:30][31.0]

Stuart Turley: [00:12:30] No, that means absolutely nothing. And when you take a look at how much money BP and Shell have paid in windfall profit taxes, as we say, I see nothing, I see nothing. How would you like to be an oil and gas? You and I talk oil deals all the time. Is this deal a good deal? Is this a good, what happens if you took 70 to 80% of your profits and it goes into a windfall, profit tax? Oops. That does not make you want to be a good steward of a citizen of a country. Guess what’s going to happen? [00:13:07][37.0]

Michael Tanner: [00:13:08] They ain’t got to be around. Yeah. No kidding. [00:13:09][1.9]

Michael Tanner: [00:13:10] Well, let’s jump over and quickly talk oil and gas finance to book before we do that. We’ve got to pay the bills as always. Thank you for checking us out here on the world’s greatest website, www.energynewsbeat.com, Stu and the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy and the oil and gas business. Go ahead and hit that description below for all links to the timestamps links to articles. Subscribe to our sub stack, the energy newsbeat.substack.com. A paid subscription is the best way for you to support the show. We appreciate all of our listeners out there. Also, we’d like to shout out friend of the show, Reese energy consulting for all your oil gas, midstream needs guys. If, if, if you are in the oil business and you’re not working with Reese energy, consulting, you’re doing yourself a disservice guys. If you’re an upstream and you’re not working with a marketing company, not Twitter, go to Stu for that. Stu will tell you how to get 20,000 followers on Twitter by tweeting out the most outrageous things on the planet. When I’m talking about marketing, I’m taking about your midstream contracts, I am talking about first purchaser contracts, making sure your net backs are the highest they can be. Reese Energy Consulting can hook it up. The other thing they could do is if you are in the midstream space and you’re trying to do any sort of project analysis, you need a red team analysis on a new plant you’re going to do. You need a environmental impact study done or any sort of thing around the mid, midstream. Reese energy consulting is your go-to guys. That’s Reese energy, consulting.com. Tell them energy use me sent you, and they will give you a 4,000% discount. That’s a joke, but they will, will work with you. They will work. So we appreciate them. That’s reeseenergyconsulting.com. And finally, guys, it’s never too early to start thinking about your 2025 portfolio. Heck, we’re almost halfway through the year. If you are interested in getting in the oil and gas investment space, and more importantly, becoming Billy Bob Thornton from Landman, we have a great, great ebook that walks through all the different ways where you can invest in oil and gas investinoil.energynewsbeat.com or hit the link in the description below. It’s a great way, again, to be cool at parties and tell people you’re Billy Bob Thornton from Landman. It’s also a great to get quarterly or monthly distributions, a little bit of a dividend. We all have a little of a little dividend. Diversify your portfolio a little, but also save on taxes, which is key, guys. That’s investinoil.energynewsbeat.com. Or go ahead and hit the description below. [00:15:44][153.5]

Michael Tanner: [00:15:44] Stu, markets up huge today off, to be honest, what was a pretty basically a capitulation by Trump on the trade deal with China. Tariffs now reduced to 10% all the way from 145%. So thank goodness we’ll all be able to upgrade our iPhones in six months. S&P 500 and Nasdaq on this news up huge, or as Trump would say, bigly. Up 3.26 percentage points and 4.02 percentage points. For each of those indices, the two and 10-year yields jumped tremendously. 1.36 percentage points, and 2.08 percentage points so both indices now are both two and ten-year yield above 4%. Dollar index jumped 1.3 percentage points. Bitcoin actually fell 1.45 percentage points, so there’s a little bit inverse correlation there. Crude oil up about 1.5 percentage points at one point with about $63 has fallen now $61.96 as we record this about five o’clock on the 12th. Natural gas tumbled a little, $3.64. Our XOP which is our EMP securities contract up 3.7 percentage points, 123. 27, pretty unbelievable too. That’s a two week high on the back of the Chinese tariffs being sort of paused. So that’s the other thing that happened. Basically is there was a pause of the tariffs and really their, their, their goal is to wind them down to about 10%. We still are seeing some, some nuclear talks with them. And I ran a lot of interesting stuff going on there. The other thing really drove markets today, Stu was the fact. That where was it, OPEC, Opec, OPec, OPEc, oh yes, Opex and Saudi Aramco came out and said they actually expect flat demand, which again, when Opex and Saudi aramco come out and say demand will be flat, I take note. Because they’re in the business of trying to say, no, demand’s going up. Demand’s going up. It’s in their best interest. Again, I, our guy of the week here, they want demand to go up because that means they can justify raising their official selling prices. I talked about on one of my solo shows last week. So I take note when they say demand is going up, just like I would take, or demand is gonna stay flat, obviously supplies probably gonna go So that leans to be something interesting. [00:18:02][138.4]

Stuart Turley: [00:18:05] It’s because that’s why I paused and let you jump in. Uh, India is going like gangbusters. China is still buying everything they can for storage because they don’t know how the sanctions are going to be going out. So they’re still going to buy. Everything, even though that they’ve had a pause on the economy and with the tariffs now coming back offline, it looks like some folks are going to be back into work again. So I think that, and I’ve been saying this for awhile. If we see a stagnant or flat China and we see a biggie in India continue on, you will see demand growth there. So I applaud the Saudis in listening to the podcast. [00:18:47][42.5]

Michael Tanner: [00:18:48] Absolutely. You’re now the new chief of staff to MBS, which is great. You went from Russia now to Saudi Arabia. Last thing we got to talk about is a story that you talked about on the energy realities is Shell sizing up biggest power grab yet. Guys, there is massive, massive, massive speculation that Shell is considering purchasing BP, which would be pretty unbelievable. And this comes off the back of some weak earnings by BP. Pretty unbelievable what they’re saying here. This basically was run in Reuters right now and there’s the speculation has really resurfaced mainly because of that 5% stake that Elliott management bought, who’s, who was trying to get some premium for that. Stu, if you were running corporate development at Shell, what would your recommendation be to, or I guess, let me see, as the CEO of Shell. What would you think, you know, I’m your corporate development guy. I come to you and say, Hey, Stu, I think we need to buy BP for these reasons. What should those reasons be and what do you think Shell should do in this case? [00:19:53][65.0]

Stuart Turley: [00:19:53] Uh, if I was the CEO of either shell or BP, I would move if I was the two answers, I wouldn’t make an offer to BP before they moved to the United States. And then I would moved shell to the united States. And here’s why they have now gone to 78% tax because of the windfall profit taxes that has been going on. I would, as a trying to protect my shareholders. My shareholders would make more money if I was in the United States. Now, if I were the BP CEO, I would move to the US. Before Shell made the offer so that I could get a bid from ExxonMobil or Chevron and here’s why because BP has a lot of Gulf of America assets it has some non-op in Alaska it has some still in the Permian and by the way I worked on a lot of the BHP that sold to BP wells and I know what those are like So when you sit back and kind of go where you’re playing on this. It’s a two-fold question. If I’m the CEO of Shell, I would say I need to do it and then I’ll move. But if I’m CEO of BP, I move so I can get another bid and put a bid war going on to really increase the value of my company. [00:21:20][86.8]

Michael Tanner: [00:21:21] No, absolutely. I completely, completely agree with you on the interesting to see because the US also gets being listed on a US stock exchange also gets a little bit of a premium. So if Shell waits for BP to reorganize in the US, then they have to pay US stock market quote unquote premium prices. The question is, if they do it before BP reorganizes, do then they have to pay even more of a premium to match a so-called U.S.? Be very interesting, but I love where your head’s at. Completely, completely agree. What else, Stu? What else should we be thinking about? [00:21:54][33.2]

Stuart Turley: [00:21:55] Well, I mean, we got a lot going on in the world right now. And I just finished up a podcast. It’ll be released tonight from George McMillan on what Putin’s doing for president Trump. It’s actually kind of interesting take. So I’ll tell you what a president Trump needs some help. [00:22:11][16.7]

Michael Tanner: [00:22:12] He needs some help. He needs great people in there and we appreciate you keeping us informed with that, but still we’re going to let these people get out of here, get back to work, start your day. We appreciate everybody checking us out here on the world’s greatest podcast sponsored by www.energynewsbeat.com for Stuart Turley. I’m Michael Tanner. We’ll see you tomorrow folks. [00:22:12][0.0][1313.0]

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