Feel free to scroll past the less important background information until you get to "WHY VENTURE GLOBAL IS THE PLAY." TL;DR at end.
Hello retards,
Everyone knows that the Strait of Whore-moose 💁♀️🫎 remains closed. But oil futures have been fairly muted lately considering the size of the disruption (Thanks, Axios!), which has led the market to move on and overlook certain names in the energy sector as huge beneficiaries of recent developments. The market doesn't seem to realize that the Strait staying closed is much, much worse than any quibbling between the US and Iran. Physical crude is still very expensive--it has averaged a spread as high as $38 above futures price over the past couple weeks (and in some third-world countries, there have been reports of oil selling for $200 a barrel!). This will only get worse as countries burn through their reserves and have to start buying more at elevated prices. Here are some fun visuals that help illustrate the outsized impact of this supply disruption.
https://preview.redd.it/w11lvv00a01h1.png?width=1408&format=png&auto=webp&s=bf88fbc3ea07c454f20ee791c8d66ceda9e1f9c9
https://preview.redd.it/z0bd4go0a01h1.png?width=666&format=png&auto=webp&s=0357fb40e6c8fa39a79c8c0a203a4b6fac1b5a81
In some stocks, namely US oil producers, this situation has already been effectively priced in. BP recently announced that their quarterly profits more than doubled compared to Q1 2025, and yet the stock was unmoved. But this does not mean that there are not GREAT opportunities ripe for the taking. Let me explain:
ASIA
Asia is having a very rough time right now, as they normally get the majority of their oil from Gulf states.
https://preview.redd.it/nin6hew3a01h1.png?width=778&format=png&auto=webp&s=9128024f0e12f11dacb60fabd75e7812286a70ea
China has big oil stockpiles, but every other country is nearing or already having supply shocks. And the thing about Asia is that they are big buyers of liquefied natural gas (LNG). However, they normally have most of their LNG imported from the Persian Gulf, which isn't possible right now. Here's some excerpts from an article that support this fact:
https://preview.redd.it/mam85fn4a01h1.png?width=633&format=png&auto=webp&s=17442a66b39962661fd2607e2b498f1b83484fb3
https://preview.redd.it/11gyye95a01h1.png?width=675&format=png&auto=webp&s=78114f6298244d7e27c3a79dbeab8125a82d891f
As a result, they have to look elsewhere to satisfy their energy needs. In this case, "elsewhere" is the world's largest LNG exporter--the US.
LIQUEFIED NATURAL GAS
I believe that the US LNG sector is a HUGE 🫲🫱 winner that has somehow gone under the radar. But first, let me try and explain the LNG business model:
https://preview.redd.it/g71t8ywxa01h1.png?width=960&format=png&auto=webp&s=96a321290c4d5e294db7fe19527ab62e00ec16db
In other words, RIGHT NOW is an extremely profitable time for US LNG companies. They get cheap feedgas domestically, convert it to LNG, and then ship it to places like Asia that desperately need natural gas (with the Gulf states being unable to export anything) and don't have access through pipelines. To be more specific, profit depends on three things.
- Spread between domestic feedgas price and price of natural gas in foreign countries
- Liquefaction fee
- Cost of transportation (longer distance = higher cost)
With Asia being forced to buy LNG from US exporters as long as the Strait 💁♀️🫎 is closed, these companies are raking in money.
https://preview.redd.it/x19lqquya01h1.png?width=680&format=png&auto=webp&s=297731f41a8802493b42824478b629288d8c5175
IS 🥭 DOING THIS ON PURPOSE?
Here's a graph that shows how much more dependent the rest of the world has become on US Oil/LNG s