May. 12 at 1:04 AM
$VG
Rick Rule interview
The oil and gas industry is underinvesting in sustaining capital as we speak by about
$2 billion a day. And while that doesn't impact the production outlook in say 2026, it really impacts the production outlook in 2028.
Markets just been fundamentally mispricing energy all along? Did the war simply accelerate a supply problem that was already mathematically inevitable?
There was structural underinvestment in the oil and gas business that was going to raise the oil price in the out years. A conflict came along and raised the price sooner rather than later. The truth is that the conflict in the Middle East didn't solve the structural problem. It did change the price of admission for people who want to invest in oil and gas companies.
If we don't resolve the problem in the Gulf in the very near term, we are going to move from prices that reflect the anticipation of shortages to prices that reflect actual shortages.
