The average price of a gallon of regular unleaded gasoline is above $3.60 and rising in the U.S.—up 32% since its January low—but that’s nothing compared to the Asian nations suffering from long lines for fuel and shortened work weeks because of their greater reliance on Middle Eastern oil and Qatari LNG.
The U.S. and other countries are rolling out record levels of emergency, reserve oil barrels, but those will take months to slowly release while the world is without 20% of its daily oil and LNG supplies trapped within the bottlenecked Strait of Hormuz next to Iran.
“The U.S. is the biggest producer in the world, and our supplies are not bottlenecked,” said oil forecaster Dan Pickering, founder of the Pickering Energy Partners consulting and research firm. “So [American producers’] financial results are absolutely going to benefit from this. That’s a lot different than if you’re in the Middle East with production that can’t move.”
The fastest-growing U.S. LNG exporter, Venture Global, is watching its stock jump 92% since Jan. 1. Leading natural gas pipeline firm, Williams, saw its market cap hit a new high of $92 billion.
And top refineries, which can help supply fuels to the world, have market caps that have risen from almost 40% to nearly 50% this year. Valero, Marathon, and Phillips 66 all have market caps above $70 billion now—all at record highs.
The companies themselves aren’t saying much because of the heightened geopolitical tensions and the reluctance of talking about benefiting financially from war and the pinched pennies of consumers. Exxon did not respond to requests for comment, while Chevron declined comment except to say that it’s focused on the safety of its employees and assets.
But Venture Global CEO Mike Sabel did comment during his March 2 earnings call that VG has the “most available cargoes” to sell on the spot market. And because Venture Global owns a lot of its tanker fleet, it doesn’t need to cover higher tanker costs.
“There are markets in Asia that are also heavily reliant on Qatar supply. Every day that ships can’t flow through, that creates a lot of backup and incremental demand,” Sabel said. “We’re uniquely able to move cargoes with our own vessels in this market.”
