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Twenty here seven hundred WLW oil? Just a trader like fifteen percent in a matter of hours after the cease fire agreement yesterday between Iran and the United States. How long do these inflated prices stick around? You may ask you if you drive by the pump this morning, and do we ever go back to normal? What the hell does normal look like? He is the CEO of King Operating's oil gas man and his name is Jay Young,
a real life landman on the show. If you watch the show with Billy Bob Thornton, you know what I'm talking about.
Jay. How are you?
How's everything in the Great State of Texas this morning?
They we're doing great. All we're doing is trying to look at twenty dollars the less of barrel though he will got through yesterday. But other than that and everything's pretty good.
How's your neck doing from all this whiplash?
That's exactly right. But hey, if you're in the old business, you'll you'll go with the flow. They're siled, keep your head down, do what you can for your partners, and just keep keep drilling, keep grinding, good good prospect.
Keep grinding put this in perspective, So fifteen percent, you go at fifteen percent, So that's a massive single session swing. But can you put that in some sort of a historical context, and is the market pricing in peace or are they pricing in hope?
Yeah, well I think it's I think it's a lot of hope in my opinion. And you look at that, you look at the futures contracts for the next several months, and you're seeing prices that are that are not as high as as they are right now, which means that they're just this backwardation, if you will, of prices, meaning that there's just so much uncertainty that that's going into the markets right now. And and you know, so I asked the day they said, well, how's this faking your business?
You know when when rolls at one hundred dollars a barrel? And I said, well, we produce, We bring about two million barrels a year, and you know, two million dollars at twenty dollars, two million barrels, I'm sorry, two million barrels at twenty five that's forty million dollars to hear more for our partners, that's a lot. That's a lot of money, you know, and it does it really affects job job growth here, it affects you know, non job growth, you know, layoffs and things that nature. So it's it's
the uncertainty is not good. And but right now I think we're seeing the prices. Prices are going to come down, you know, as they have, and but I don't think they're going to go down a lot further and stay there for a long period of time. We've had a lot of disruption. Yeah, and they also apply around the world.
Well, it's going to be a along with short two weeks, if that makes sense. The ceasefire, of course, is conditional. Ran still has to physically open the straight or four moves, if they stall, if they drag their feet, if it's a partial opening. What is happened to new to prices? Are we just going to see this whips of effect for the next two weeks?
We will well, we'll just see. You know, everybody's probably got cameras. I heard the morning that they say, well, there's no big takers in the strait of Remoose right now, you know, there's there's you know, so they are they're going to look at it and they're going to find out what's what's going on with the markets, and they're going to see what's going on with with you know, opinions and what's going to happen. And you know, I don't I don't know if we'll if we'll ever know
until it's already been done, you know, quite frankly. But I do know some facts, and uh, I think you called me about some facts. You wanted some facts. And I do know that there is a lot of oil that's been disrupted with a train of removese over the last you know, month, month and a half. And and what I mean by that is, you know, all the all the Persian golf countries have shut their wells in
pretty much. They you can't produce you know, millions and millions of barrels a day and expect you know, to
hold it. And so it's it's they've been shutting these wells in for a long period of time, and about about twelve to fifteen million barrels that they've had, you know, shut down right now because they don't have the storage capacity, So hundreds of millions of barrels have not been produced, which means it does not go into the oil supply, and when it doesn't go into the oil supply and it's disrupted, we're going to see problem for I means,
I was listening to the baking American President last night. He was saying that this could be you know, throughout the whole year that we see eighty dollars ninety dollars oil. So not just for right now, but also this is a factor for you know, a long longer period of time. Yeah, Jay Young.
Those wells don't just restart on command. What's the realistic production ramp up timeline you're talking about here to get everything.
Back on line? It takes weeks months. As a matter of fact, a lot of the oels may not even come back on. I mean, we've had wales before that we've had to set in for unfortunate exist reasons and they just don't come back on. And if they do come back on, they may come in seventy percent of what they were before. So it does take It does
take time. It's unfortunate that you have to shut down, especially oil wells, oil wells that are high pressure oil wells because of the liquids and because of the pressures down haul. It does take a lot and you know. The unfortunate thing is it may not come back around, which means we're going to see a shortage in oil for a long period of time. Uh. And if we see that, we're going to see higher prices. Yeah.
Jay Young is a is a gas, gas and oil man out of Texas at King Operating, and our own government says Middle East to oil production.
Uh.
Because of what we're talking about, we're not going to see pre conflict levels return until late this year. So best case scenario deal done straight or moves open great or moving the containers through and ships through. But here in the Tri State families are still going to pay elevated prices for what the foreseeable future, at least to the rest of this year, right, I think so?
I mean, I I've been talking about higher prices going in of the summertime when a lot of demand, you know, peace because of you know, people of the go vacations, and we shut rigged down. We shut rigged down for
the last two three four years. I mean there's some there's some places that we've had forty declines, which means rigs aren't running, rigs aren't drilling for rolling gas number one, but number two is you know, the whales that are online decline rapidly in the first year two years, so we're going to see an effect of that as well. So we're going to have a lot less supply on the market and our demand continues to rise. So we're
going to see higher prices anyway. And I wasn't even including the war in this, but you put this into effect with a lot of disruptions globally, I think we're going to see prices higher for a long period of time.
Well, I mean, we we tapped into the spr the Strategic Patroling Reserve, we have Russian oil exemptions, We've got these backstops that were kind of helping us out through this crunch. But some might think this came just in time, but it sounds like we're still going to feel because all of those things and more that I can't and fathom at this point, are coming to gather confluence to put a further crunch on oil production.
Yes, exactly. And Trump is doing anything and everything he can. He's got midterm elections coming up. He does not want a lot more Democrats in the office because they'll they'll try to impeach him, and we'll hear about that for the next two years. So he wants all prices lower. And I felt like that that oil prices at one hundred, one hundred and twelve thirteen are low compared to what they should be during the war like this. So he's
done a great job keeping it down, you know. And now he's done a great job with with you know, his negotiations so far. We'll going to happen this afternoon or in the next couple of weeks.
Like you said, we get something out of it, like you know, nuclear disarmament, there's got a piece. We got to get something out of this. Otherwise, Okay, well why did why did we go through this exercise and put the world on the break for a few days if you can call it that? And the threats of course that were made or one thing, but action is entirely different. I get that. I just you know, you hope that, you hope that there's an endgame here for us here
in the United States. You know, I look at Saudi Arabia, they have actually benefited from their pipeline infrastructure during this crisis. Crude experts to Europe hit a two year high. Of course, you know, it feels like we're losing here. But who are the other winners of this what roughly six weeks of chaos in the straight of horror moves And is the American oil industry one of them?
Yeah? Absolutely, Yeah. When you see higher prizes like this, revenues do go up. And is good. And there's a lot more drilling prospects. I mean, there's some prospects that look good at you know, twenty thirty where we drill, we drill for twenty thirty dollars a barrel. That A lot of the shale prospects that they have, you know, they look they look really good at seventy or eighty dollars a barrel, they break evens, maybe fifty sixty dollars.
But but you know'll hire the prize, hire the revenues. It's not as important and it's not as important to drill wells that you are thirty forty dollars a barrel for their brake. Even so it puts a lot more rigs on the on the market when you have higher prices and that and that's good for It's good for Texas, I know that because we do a lot more drilling and we have a lot of old production here uh
in Texas, and it does. You know, it's great for jobs, great for our taxes here in the in the in the state of Texas, and we don't pay income tax because of that. But it's it's really good for us here and it's just good for for anybody. But you're gonna see a lot of a lot of of them right now. I'm afraid with a lot of the oil that that's that's been conflicted east of its west coast is going to see higher prices. And let's see how
fast these these prices do come down. I mean it's gonna take You're gonna take a few days or a week or what to bring these prices back down at the pump. Yeah, you know, Americans are paying eight hundred and thirty million more a day right now with with with gasoline prices being up, they're paying eight hundred and thirty million more dollars a day. Let's see how long it takes these prices to go down with the pupe.
I just drove by a gas station. I didn't see I didn't see two dollars or three dollars on that on that side. So it may take a little a little bit because they have bought all that higher prices, but hopefully it'll come down soon.
Yeah, we're, howevering just I think below four here in the Tri State in Cincinnati, Jay, and you're in Texas. You know, the one thing we didn't mention adds the cost here is the shipping insurance premiums. Those have gone through the roof for you guys and analysts expecting a I think they call it a security search charge, which, of course you know anytime you get a search charge, they put it in and never goes away, never goes away.
So that also helps keep prices artificially elevated even after the straight opens, right exactly.
Yeah, and you're seeing a lot of the Saudi Arabia is charging nineteen fifty. It just reminded me that Saudi Arabia was charge in nineteen fifty because they can't getting all out of that persion golf or the trader removed. So you're seeing a lot of taxes, but you're seeing a lot of taxes everywhere on California has a lot of taxes. That's why they're they're paying six seven dollars
of a gallon over there. You're seeing a lot of other states that are having to pay taxes right now, and and you know, hopefully, hopefully we can keep these prices down and get back to normal, whatever normal looks like. I think it looks like. You know, seventy eighty dollars a barrel is great for us as a producer. Yep, it's we don't we don't need. We don't need one hundred, we don't need. That's if you watch lamb Man. You know, Billy ball Carton says we need about seventy five dollars
a barrel. So I would definitely, you know, right after you, right after you watch Lambman, just go look at my book The Upside of Only Gas Investing, and you can learn how to how to make money out of all the things that Billion Bob talks about. Because it's a it's a great show, and it does. That's that's how I grew up. Yeah, I grew up. You watch it? Is it? Is it fairly accurate?
I mean, obviously you know what happens in one day, It's that's not reality. There's probably, like anything, a lot of sitting around and then you have a crisis of what you can't have that much drama in one day? Go out in your life, otherwise you die from sheer stress. I get that, but how accurate overall is it?
It is accurate, but it's for Hollywood. It reminds me when Cooper goes out and he drills like five old wells in an afternoon. I mean he's like two hours late. He's like two hours late from getting back to his I think his girlfriend at the time. Yeah, and he said, yeah, he said, you know what, we hit every well we drill, we hit like five wells. And I'm like, it takes you five months to drill five wells. You're not You're not going to just go around and drill five wells
in the afternoon or something. But it was made for Hollywood. It's a great show show.
It's one of the best shows on streaming, that's for sure. Jay Young, so the too long, didn't read version of this thing. If you're just joined the Scotsland Shore Show here with a Jay Young who's an oil and gas man and his book is Upside of Oil and Gas Investing. He's a brainer in Texas is that gas prices higher gas versu whose inflative gas prices are here for the foreseeable future. At least through quarter four of this year because of all the uncertainty that's going on, the fact
that these strategic PATROLLERU miserve needs to be rebuilt. We've got rushes issues in there as well with their needs. We have the insurance cost of shipping, and the uncertainty of when Iran says enough enough and they close the straight again, if indeed that happens, And it seems like that's the biggest issue is how can Iran control something that they really have no oversight on that would be the straight of our moves. That's the troubling part of this that there's no work around.
For exactly and there's gonna be a lot more pipelines there.
They're gonna be you know, built really soon because you know, I think that twenty percent of all oil in the world goes through the Straight of removement to thirty thirty three miles wide is just absolutely crazy in regards to you know, and relying on that and Iran trying to get as much control as they can and hopefully just the thing is gonna go to play out where we can all play knives and we can do what we when we grew up, all of us grew up, you know,
on our knees right beside the bed, saying you know, all we want, you know, got his world peace. So that's what we're trying to do right now as well.
So yeah, yeah, from an engineering standpoint, we would kick this or us a play if you could do something about the straight off our moves to take that. You know, it's it's obviously what you're talking about. There's moving mountains literally, I mean that in order to do like a canal. But you know, you think about here in the States, back to where I grew up in the Great Lakes. Uh, you know, it was the Erie Canal was a huge thing right the ear cannoticing it and then they said,
well we're gonna make a seaway now. And then that of course killed the towns. Will help kill the towns around the Great Lakes because engineering came along and literally could move mountains. I don't know if that's in the foreseeable future, but at some point maybe there's a way to do that where you can bypass the straight offour moves and take a round completely other picture. Of course, that means that the nation or nations that you do
something like that around are gonna win him. Go hey, wait a minute, now we hold all the cards and Iran does it anymore, and we have a new form of totalitarianism. And it's all driven by money and oil, which we need to live our modern lives.
For sure.
He is Jay Young, CEO of King Operating. It's oil and gas. He's a real landman here. It's not Billy Bob Thornton. It's Jay Young. The upside of oil and gas investing is the book. And thanks your time, sir. I appreciate it.
Thanks a lot. You guys, have a great day, and and check back with me maybe maybe in a couple of hours.
Because you never know what could happen, but right we could do it. Dare daily update and it changed minutes and minute. Take care Jay, thanks, he absolutely thank you. Sure we got to get news update in uh very late so uh travesty averted here so the world a dot end last night in case you just in case you were like me or watching Red's baseball going hey, yeah, weren't we supposed to blow up her? Perhaps too into the Reds game. Let's get the care. It's a good
problem to have. Sarah least the Snart report. She is going to celebrate the big dub last night. A milestone win very early in the season for the Reds, a milestone wind. We'll get into that next on seven hundred Wlwright