"The number of people employed in Pennsylvania’s gas industry has fallen to just over 16,000 today, down from 30,000 in 2012. But even in its heyday, those employment figures were not enormous. By way of comparison, Walmart employs 60,000 people in the state, and the University of Pittsburgh Medical Center employs 100,000 people, six times that of the gas industry."
I've been living in Kenai Alaska for the better part of 30 years. Today I went to the beach and there are three tanker docks there i have never seen no tankers at any of the docks.
I feel afraid.
Petrobras (NYSE: PBR) has identified the presence of hydrocarbons in an exploratory well in deep waters off the coast of Amapá, marking a potentially important development in Brazil’s Equatorial Margin.
The well is part of the Foz do Amazonas sedimentary basin, one of the five basins that make up Brazil’s Equatorial Margin, a frontier extending along the country’s northern and northeastern coastline.
The Morpho well is located approximately 175 kilometers off the coast of Amapá, at a water depth of 2,886 meters.
Petrobras is the operator of Block FZA-M-59 and holds a 100% working interest in the area. The block was acquired by Petrobras in 2013 during Brazil’s 11th Round of Bidding under the concession regime.
Petrobras President Magda Chambriard commented:
“Our optimism regarding the Brazilian Equatorial Margin is confirmed today. This first discovery off the coast of Amapá is the result of Petrobras’ dedication and expertise. The company is committed to replenishing oil reserves and ensuring the country’s energy security.”
In the full article Is discuss the similarities between this discovery and Guyana’s oil boom, as well as how the discovery fits into Petrobras’ 2026–2030 Business Plan and its broader exploration strategy.
Read the full article: https://brazilianfinance.com/news/petrobras-reports-hydrocarbon-discovery-in-the-amazon-river-mouth
Niger has signed a $1.9 billion agreement to build a 100,000-barrel-per-day refinery and petrochemical complex in Dosso.
The deal involves a build-operate-transfer structure with Zimar Group and High Tech.
The new facility will be one of West Africa's largest refineries, increasing Niger's refining capacity fivefold compared to the existing Zinder refinery.
The project includes additional infrastructure such as pipelines and storage, with the goal of supplying both domestic and regional markets.
TL;DR: The Hormuz shock migrated downstream, the scarcity is in refining capacity, not crude, and a meaningful share of what's offline is physically destroyed, so it can't mean-revert with margins like a normal cycle. That makes the setup asymmetric: a strait reopening is bearish crude but much closer to neutral for cracks. Refiner equities have run 80–100% YTD but still trade at 6–8x, priced as if the E doesn't repeat, and I think mid-cycle earnings have partially reset higher. Biggest risks: distillate demand rolling over (the number to watch), faster-than-expected repairs, and export-curb politics. This is a 2026–27 thesis, not a decade one.
Most of the Hormuz commentary is still arguing about crude: how many barrels are stranded, when the strait reopens, what OPEC spare capacity can offset. I think that framing is a lap behind the market. The scarcity migrated downstream, and the evidence is in the spreads rather than in flat price.
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The setup
Crude and products have decoupled. Crude is well off its wartime highs, Brent is around $87 against an April peak near $121, while product cracks sit at or near record highs. That is not what a pure crude-supply shock looks like; in one of those, everything rallies together. (JPMorgan's commodities team has been making the same observation: the shock is increasingly a refining story, not a crude story.)
The numbers, as of mid-August:
Why this isn't a normal margin cycle
Refining margins are cyclical and they mean-revert. The standard mechanism is: high margins → utilization rises, idled capacity restarts, new builds get commissioned → margins compress.
That mechanism requires capacity to exist.
A meaningful share of what's gone is physically destroyed. You cannot restart a cracked distillation column or a wrecked hydrotreater because the margin environment improved. Repairs run quarters at best; rebuilds run years and billions in capex capex that boards have been extremely reluctant to commit in a sector everyone spent the last decade calling terminally declining.
The pre-existing structure makes it worse:
The industry was already tightening into a capacity wall before anyone hit anything with a drone.
The part I think is most underpriced
A Hormuz resolution is bearish crude but much closer to neutral for cracks. Reopening the strait moves barrels. It does not rebuild Jizan, or Sitra, or the Russian kit. If the strait reopens, crude likely sells off, and refiners get cheaper feedstock into the same tight product market, which is not obviously bad for margins.
The honest caveat, so nobody has to make it for me: not all of the Q2 outage complex is destruction. A chunk of it is feedstock, Chinese and Japanese crude imports each fell ~40% during the worst of it, and those Asian runs come back when flows normalize. So a reopening does restore some product supply, not just crude supply. The asymmetry holds for the wrecked kit, not the starved kit. My claim is that the wrecked-kit share is large enough that cracks stay historically elevated through a reopening, just off the extremes.
That asymmetry is the whole thesis. You don't have to be right about the geopolitics to be right about the spread.
Equities have partly figured this out, MPC and VLO have roughly doubled in 2026 and HF Sinclair is up 80%+, against an S&P up ~11%, but the multiples still price these as cyclical peak earnings. PBF trades around 6x and HF Sinclair around 8x on 2026 earnings power (trailing P/Es are noisy right now, since the trailing window still includes loss quarters), versus 12–14x for the larger, better-diversified names. Those multiples are the market saying we don't believe the E repeats. The whole question is whether mid-cycle EPS has structurally reset higher. I think it has, at least partially, and 6x doesn't reflect that.
What I might be wrong about
Taking the bear case seriously, because it isn't weak.
What would falsify it
Genuinely interested in pushback, especially from anyone closer to the physical side. The piece I'm least confident about is repair timelines on the damaged Middle East units, the most recent public read (Kpler, Aug 8) has maintenance elevated through year-end even if the maritime picture eases, but most of what's public is vague. If those units come back faster than the "months" everyone keeps repeating, this compresses quicker than the equity market is positioned for.
Sources: EIA: petroleum markets and Middle East disruptions · EIA: refinery closures and 2026 inventories · IEA Oil Market Report, August 2026 · Kpler: global refining splits · Rystad: refining after the Hormuz shock · OPEC World Oil Outlook · Forbes: crack spread record
The Seismic Shift of the largest Energy Flows is changing the Entire World’s Economic Future.