2026 Oil Price Forecast: Venezuela, US Shale, and OPEC with 30-Year Chevron Veteran Chris Hedge

Peter Brecht00:00

Hey everyone, welcome to Local Energy. This week we have a special episode with Chris Hedge. I met Chris on LinkedIn. He's a prolific writer in the oil and gas space, writes about energy markets, has a history with Chevron and a number of other large oil companies. And we just dive into some timely topics about Venezuela, Sable Offshore, and his 2026 outlook for the oil and gas market. So.

Enjoy this special episode of Local Energy and we'll see you again on Friday for our typical release. Thanks.

Peter Brecht00:30

All right, welcome to Local Energy. My name is Peter Brecht. Wade is not with us today, but we have a special guest, Chris Hedge, with us today. We're gonna be going through some interesting topics. He's been writing on LinkedIn, been following for some time, and just excited to have this conversation. So Chris, thanks for joining. How are you doing today?

Chris Hedge00:47

Peter, thanks for

Having me. Really appreciate the opportunity. And, I'm in Houston, so it's a cold blustery winter day here. So I've got a park on with my flip-flops.

Peter Brecht00:54

Yeah.

Exactly. Yeah, I read this morning. There's a big wind ripping through the Permian right now, but you're you're well well south of that so Yeah, yeah You're in the good place Well, Chris, I've been so I followed you on LinkedIn a couple months ago. I read one of your articles top to bottom And then LinkedIn just decided to keep serving the articles that you were writing and it turns out you're a pretty prolific writer on there your

Chris Hedge01:04

No, I'm in the southern Piney Woods, man. There's no wind here.

Peter Brecht01:24

Following a lot of key topics in oil and gas and energy and just across the board. And so just thankful to have you on. I wanted to take today's conversation and maybe kind of set up what you would think of as like a 2026 outlook, things that you're looking at. And you've heard about this quite a bit as well. Maybe we could talk about Venezuela, Sable offshore, and then a couple other things that you're into. But before we get into that, give us a little background on yourself and what you're up to these days.

Chris Hedge01:47

Oh my gosh, how much time do you have? Yeah, so we talked a little bit about this, my professional career was I worked for Chevron for 30 years. Started in California, moved to Houston, never wanted to really go back. But I was actually hired into Chevron in the IT realm. I was a programmer when I first started with them. Spent 10 years doing that, was IT manager for the Pipeline company, which

Was my entree into that other side of the business. Cause then I've got my MBA moved over and was doing commercial planning strategy work for the pipeline company. And around the early two thousands when, Enron imploded, they took Dynagy with them. Dynagy was Chevron's, I know it's a long story. Dynagy was Chevron's oil, oil or gas and NGL company, right? It came out of the ground and immediately went over to them. And when they imploded those contracts went,

Peter Brecht02:31

No, it's great.

Chris Hedge02:39

First, the gas contracts were up for renegotiation. So we went through a process of taking those gas contracts back in house, building a gas business. You see all their activities around gas this day. And about a year later, the NGL contracts came up. Target had them. And we elected not to renew, bring it in house. And I spent a number of years building out the trading function in doing what I could to help set up the trading function in Singapore, London.

And Houston, Chevron really didn't have a trading function in those spaces. So was really trying to build that out. Texaco did. So it's about the time of the Texaco merger. We got a lot of expertise from Texaco in this space. And when we bought Texaco, we also got Caltex, which is the Asian joint venture of the two. Evidently all of a sudden I'm the NGL expert. And I spent a lot of time running around Asia, evaluating some Caltex.

Peter Brecht03:22

You

Chris Hedge03:26

Has dates, call them investments, but projects or businesses and trying to figure out why they were losing so much money and give them either a turnaround plan or a recommendation to divest. Right. Caltechs love those guys, but they like to make, they like to do projects. Didn't care if the projects made money. They just like to do projects. And it was a lot of fun work with those guys. So then after that, I went to,

Peter Brecht03:30

Mm-hmm.

Okay.

Yeah. Yeah.

Chris Hedge03:50

I was on the trading floor for a while working with the traders in the upstream trying to bridge bridge that gap. I know it's a long story. And then the last 10 years of my career there, I was, I ran their long range analytics team. So we came up with the basically the price deck and we did investment analysis, for the Chevron executives and the board and also for the Chevron board members for Chevron Phillips chemical company. Right. So when they put forth the project to do the first cracker,

Peter Brecht04:04

Hmm.

Yeah.

Yeah.

Chris Hedge04:17

It came through my shop for vetting, right? And we took a look at that, ran our assumptions through it and kind of gave the executives the nod or told them what questions to ask or what to get changed or whatever. And then, so honestly, I'd still be at Chevron today, except for they decided to combine the downstream group that I was leading with the corporate group in California. And they said, we want it based in San Ramon. And I'm like, I've got kids, they're entrenched.

Peter Brecht04:26

That's awesome. A lot of data.

Chris Hedge04:44

My wife she's a lawyer, she has her own career. I can't move. You we partied ways. I worked for ICIS for a while on the chemical side. Worked for a consultancy with a bunch of buddies of mine doing value chain optimization. And then I landed for the last six years at WoodMac running their oils, basically the liquid side of the business. And then

Focusing on NGLs and chemicals there towards the end. And they decided to focus their concentrated efforts in all of the energy transition, gas, power. We're kind of letting, not to bash them, right? It's just a business decision. And they were not really investing in the liquid side of their business. We parted ways and now I'm kind of doing some consulting on the side and a lot of writing.

Peter Brecht05:20

Yeah, yeah.

Chris Hedge05:30

I'm an intellectually curious kind of guy. My background obviously is oil and gas, but I also have that IT background. So you'll see a lot of stuff on technology and some other things. And then the oil connection to geopolitics. So you've seen a couple of articles about Venezuela. I think I even put one out there about why Greenland is so important to the US. I really write about what I find curious.

Peter Brecht05:35

Yeah.

I haven't read that one yet.

That's awesome. There's a, it might've been you that I was talking with, writing is kind of my way of thinking through problems too, right? So as you put pen to paper, you sort of start to draft things out and realize maybe you don't think what you thought you thought. It's kind of an interesting way to think through things. But I like reading what you got now. Venezuela, I know, or if you don't mind digging into this one with me, but I'm just curious, like I'll be honest.

Chris Hedge06:17

Exactly, right.

Peter Brecht06:34

It's hard for me to follow the news on it because it's hard to get facts. And I know even if you say this is a fact, people are going to be like, no, that's not correct. And there's all these things. But I guess in talking to, and since we're here, what's your take on the subject or like, what are maybe people not talking about that we should know? Because my understanding is that, we have, we were down in Venezuela, we're doing the oil and gas thing, and then we got kicked out. So we had to leave all this stuff behind.

American companies lost a lot of stuff that they were supposed to be able to just keep going. So I don't know how we put this together. There's just a lot of broken pieces that I don't really have wrapped in my head.

Chris Hedge07:12

Well, that's the history, right? Everybody got pretty much kicked out except for Chevron. Chevron was there. They made some sacrifices, took junior positions in their joint ventures, right? I I'm not saying they didn't lose, but they always kept a foot on the ground, right? I mean, they even had some of their executives thrown in jail while I was with Chevron, right? And that was a big issue. Really it's yes, Venezuela is a huge resource rich.

Peter Brecht07:14

Yeah.

Yeah.

Chris Hedge07:39

Nation that's you obviously it's been abused and whatever by their own government But the intervention there is not necessarily about oil specifically right not the way people think Right. Nobody's going in the US isn't going in and taking that oil for our own use or for our own benefit Right. This is more of a geopolitical play it gets into politics And if you don't think there's a cold war going on between us Russia and China, you're sadly mistaken, right? So

Peter Brecht07:59

Mm-hmm.

Okay

Chris Hedge08:06

I think it was more, it's an oil play, but it's more denial, right? Right. Where we can go in and we can more control the access to it. And you see that the way that they've set this up and there's been a lot of complaints that Trump is stealing the money, but I honestly don't believe that. And I hope and pray it gets funneled back into the country itself because it's a mess, but it's not an oil. We're not stealing anybody's oil.

Peter Brecht08:15

Okay.

Mm-hmm.

Okay, gotcha.

Chris Hedge08:32

Right. I mean, you can look at it any way you want, but at the end of the day, the money should be funneled back into them to get them back up on their feet. I think if we'd have gone, it wanted to, and again, this is politics. If we'd have wanted to take the oil, it would have been a much more full scale issue. Right. I think it was more posturing. There's been talk about, the Chinese and the Russians are trying to get a foothold in the country, right.

Peter Brecht08:33

Right.

Mm-hmm.

Okay.

Mm-hmm.

Mm-hmm.

Chris Hedge08:59

There were some agreements for some military bases. I think there's been talk with Cuba along the same things, and this was a statement by the administration that we're not going to allow it. And to a certain degree, think Greenland's a lot of the same thing. I think it was, were we going to invade Greenland? Yeah, I don't think so. Think it was, this is my opinion, strictly my opinion, that quite frankly,

Peter Brecht09:01

Yeah.

Okay. Yeah. Absolutely. You know...

Yeah.

Yeah, yeah, right, right.

Chris Hedge09:24

I think the US saw a need to beef up security around Greenland and they wanted to do a buildup. Could they have gone in and negotiated treaty? We already have treaties with Denmark who owns it. So we probably could have done just about anything we wanted. I think he just didn't want to spend money. And the big issue was to get Europe to do it. So it was a hold my beer moment. We're going to threaten to invade because he's known for his bluster and his BS.

Peter Brecht09:41

Sure. Yeah. Yeah.

Yeah, yeah.

Chris Hedge09:49

They sent 30 guys in to start an investigation of how they could beef up Greenland security. Was it negotiated and planned? Cause there's always a public view with him and there's a private view and sometimes they cross, but I mean, I'm not the biggest Trump fan, but there's always something going on in the background that the public is not aware of. Right. And that's always, I find it intellectually curious, curious to try and figure out what that is.

Peter Brecht09:59

Right. Mm-hmm. Yeah.

Sure.

I agree and I'm kind of the same mindset. It's like, I'm not a politically inclined human. I believe it or not. It's like, just, can't, I can't, I don't know what's right or wrong and that's why it's good to just have these discussions, but.

That you look at WTI and kind of the outlook. When Venezuela happened, WTI started going down and everyone's like, well, we're going to have all this oil. And it's, think there's a big misunderstanding. I personally don't think that Venezuela is going to have a massive impact on our reserves. And I might be very well off on that statement, but I mean, I think that the, U S oil and gas economy is going to do fairly well throughout the rest of the year. I don't know. Maybe, maybe you have a different opinion, but I kind of like to hear your

Thoughts on how Venezuela would affect our market? Potentially.

Chris Hedge10:55

I don't think Venezuela is going to

Affect anything in 2026, right? They may be able to ramp up production a little bit, but it's, again, it's heavy crude. And if they do that, what'll happen is, it the light heavy differential will need to fall significantly before the U S refiner start to take that, right? We're not back in the day where they're, they want to optimize their asset a hundred percent. They don't play that anymore. They optimize margin.

Peter Brecht10:59

Okay.

Yeah.

Okay.

Mm-hmm.

Okay.

Chris Hedge11:21

So

They need that differential in order to fire up those Cokers and heavy conversion units, right? I mean, everybody'd like to see them running, but we've adjusted to a light-tide oil situation where, that's why we're still importing heavy crude, right? Because we can't get enough of the products out of the oil that we produce to feed the world, right? There's a reason why they do that. And it's a little bit of optimizing my assets, right? And trying to keep my...

Peter Brecht11:27

Interesting.

Okay. Okay.

Mm-hmm.

Chris Hedge11:48

My conversion units running and whatnot. But again, they're optimizing on margin, not necessarily on utilization of the unit. But you've got to, you you go back to the 90s, I'm old, I know I'm old. And you got to remember that the prevailing view was that was the future, right? We're running out of light oil, the North fields were in decline. We were going to see a lot of

Peter Brecht11:57

Okay.

Mm-hmm.

Chris Hedge12:12

WTI, the Permian was in decline. Everybody was in decline and except for this heavy crew, there's Canadian tar sands, there was all this South American heavy Mexican Maya, right? And that was the belief. So they invested billions in the Gulf Coast refining system to be able to process this stuff, right? And that's kind of how we got into that. And then all of sudden light tide comes on and there's not enough distillation capacity in the US to run it all.

Peter Brecht12:17

Mm-hmm.

Hmph.

Yeah. Okay.

Mm-hmm.

Hmm.

Chris Hedge12:39

So

You saw the ban on exports get lifted and now we can export it to the rest of world and fill up their distillation columns before they get their back end units. So the whole world is kind of adjusted to this and we've got Canadian heavy crude coming into the Gulf Coast that kind of makes up the difference. But again, it keeps those units running to where they need to. But for them to start switching again, they need to see that light heavy differential really widen out and make it profitable to do so.

Peter Brecht12:46

Okay. Gotcha.

Mm-hmm.

Mm-hmm.

Chris Hedge13:06

Does that mean that that, that, that Venezuelan crude won't still go to China? No, but they control it and they can cut it off if they need to.

Peter Brecht13:14

How much do I read that the lifting costs in Venezuela were like 30 or $35 a barrel and I don't, supposedly that's high and maybe makes it almost like not economic, but is that something that plays a factor or not really?

Chris Hedge13:29

Well, what's driving the lifting costs, right? If it's crude, so what they've done is they've been using floating storage, right, for what they couldn't export. So there's a lot of already loaded or in storage crude. So what's driving lifting costs? Well, a lot of it's going to be about insurance, right? And ensuring those vessels that somebody doesn't decide to take out an illegal cargo, right? I mean, you hear all this about China's shadow fleet and Russia's shadow fleet, right? Turn off the AIS.

Peter Brecht13:44

Got it. Yeah.

Right, yeah, yeah.

Mm-hmm.

Chris Hedge13:56

Go do what you got to do and then turn it back on. So you really got to look at what's driving those high lifting costs and it's around the shipping aspect, right? Because if the facilities are there to load, and the oil is sitting there. Yeah, they probably got a if it's heavy viscous crude, they've got to heat it a little bit to get it on the ship or whatever, right? They've used diluent to get it down to where they can pump it. So what's driving the cost? What's the ships, right?

Peter Brecht13:56

Yeah, yeah.

Yeah. Okay.

Okay. Okay. Gotcha.

Interesting.

Chris Hedge14:22

The freight costs

Have gone up dramatically for those types of loadings.

Peter Brecht14:25

Yeah.

Yeah. And I know the insurance side of it, that's just not even a fun topic, but it's unfortunate. It's unfortunate that that's the okay, if insurance comes up as a negative, that's not a good thing. Pivoting over into, a conversation. So we actually had an interview yesterday and that'll be released in a couple of weeks. So well after this has gone out, but conversation turned over to, shale. We've got Permian doing PNA on

Chris Hedge14:29

That's your game, right?

Peter Brecht14:51

And how we've only maybe gotten two to 5 % of really what the reserves out of the shale. Now, do you think that there's another like another shale play that's gonna happen and we're gonna get back into that or have you anything on that? Maybe that's not your wheelhouse, but just curious if you have any thoughts on it.

Chris Hedge15:08

It's it a lot of what it comes down to is because we're into the source rock Right. Do we know the extent of the source rock? I mean the geologist the geology is fairly well defined The question is is is the technology comparable with the geology? Right because not only the US I mean in the US is where it's centered, right? But there's a lot of shale throughout the world, right? There's just a lot of issues

Peter Brecht15:18

Mm-hmm.

Okay, yeah.

Chris Hedge15:32

With recovering those shales, right? In China, like the geology doesn't work really well. In Europe, it's the issue with surface permits, to be perfectly honest with you, right? There's a lot of history in Europe. So you get an acre of farmland and it could be owned by 200 different descendants of the original owner. And they all have their 10 foot by 10 foot plot, right? And you have to get a surface lease

Peter Brecht15:37

Okay.

Man.

Mm-hmm.

Chris Hedge15:58

From every single one of them and running them. So it's just, it's a logistics nightmare. Plus, the, big drillers, the big, VARCOs and the rest of those guys, aren't there. Right. So there's just a lot of challenge. It's there. You can probably recover it. It's just, there's a lot of challenges before you even get to the politics of it. Right. And I know that again, back when I was at Chevron, we had a couple of test wells and that's how I learned all of this stuff. It's just.

Peter Brecht16:04

Yeah.

Right.

Mm-hmm. Right. Right.

Okay.

Chris Hedge16:23

You think, you there's no big landowners in there, right? They're not. It's like everybody owns a 10 foot by 10 foot plot. And if you're going to put a road in or you're going to drill, got surface rights, you still need the mineral rights. And it's just a nightmare to do business in. Plus you have to build out the infrastructure because it ain't there.

Peter Brecht16:27

Mm-hmm.

Yeah.

Mm-hmm.

Got it, so don't be a land man in Europe.

Yeah, yeah, I gotcha. But Texas, we could, that's a little easier, I'd imagine. And if we're focusing on, the US stuff, it's possible that we could go back in in five or 10 years with better data and, on that side and, okay. Okay.

Chris Hedge16:55

Well, better technology, right? I think it's more like better technology, right? Because

Some, again, the geology will tend to work against you. Right. And, Mitchell, Mitchell played around with this for years before he discovered the formula, right? To unlock the Haynesville. And, once he did, you saw the, it's like, it's like the computer age, right? It's just the advances in technology just come faster and faster and faster and faster as people. I mean, you see it now, the lateral links are outrageously long, right?

Peter Brecht17:02

Okay. Okay.

Yeah. Right.

Right? Mm-hmm.

Yeah, they are. Yeah.

Chris Hedge17:23

The well efficiencies

Are outrageously long. The client rates are still crappy, right? But the technology is getting better and we haven't even started in on refracking a lot of this stuff, right? Because if you think about it, fracking is going in and using, basically pressure to crack the source rock to pull the molecules or to let the molecules flow out. But over time, the source rock will tend to clog back up. And that's why you get this big decline rate and then you get into more of a steady state.

Peter Brecht17:27

Yeah.

Right.

Okay.

Mm-hmm.

Chris Hedge17:50

So you can go back and refract that, which means really bust it back open again and you get back like 70 % of your IP rate, but then you get that decline. But we haven't seen whole scale refracking going on in the Permian, right? Cause they're still laying new wells, they're still clearing their ducks. So to me, it's not a new shale formation will be discovered. I think they'll have technologies to come in and work over and increase the efficiency of the existing wells.

Peter Brecht18:00

Yeah.

Hmph.

Chris Hedge18:18

But that said, I'm not a subsurface guy, right? This is strictly my opinion and what I think based on my limited knowledge.

Peter Brecht18:18

Okay. Yeah. Yeah, yeah.

It's,

No, and it's good. And I just, like the way that you frame things and the questions you're asking or maybe I think that, maybe because it's not something that you're in every day, you might be asking questions different, which I think is, why we're here. Right. I like hearing different perspectives. So yeah.

Chris Hedge18:38

Well, I don't know what I don't know, right? So I do ask a lot of stupid questions. I often, I always say there's no such

Thing as a stupid question except question you didn't ask, right? So.

Peter Brecht18:45

Yeah, exactly.

Yeah. Flipping over. Now we're going to go. We're going to move over to the West Coast. This was something in the pregame that we were talking about. I got to talk about Sable. I, I'm California born and raised. My wife's a surfer. I can't leave. I'm so I'm just I'm here trying to make the most of what I can with, the California oil and gas community. But Sable's obviously been a very big topic here. And, just

Chris Hedge18:52

Hahaha.

Peter Brecht19:10

Across local communities talking about it. Now we have the Fed coming in and it's like, so I would love to just hear your perspective on it and just overall your thoughts about Sable.

Chris Hedge19:21

Well, it's not sable necessarily. It's the fact that they're trying to restart those fields offshore, Santa Barbara, gutsy move, right? I mean, again, back in Chevron Chevron used to own and operate those fields. And it was, I can tell you horror stories of issues and mostly around permitting. And that's, it seems to be what their issue is as well. Right. And it is,

Peter Brecht19:29

Yeah, yeah, absolutely.

Yeah.

Mm-hmm.

Chris Hedge19:45

It is just the environment in California. I'll tell a story. I'll try not to name too many names, right? But there the method is is, okay, we're going to require you to do inspections, and we're going to require you to do maintenance. And if you don't do the inspections, we're going to find you if you don't do the maintenance that's found by the inspections, we're going to find you. But in order to do the inspections, and or the maintenance, you need a permit. We're not going to grant you the permit because you're oil and gas.

Peter Brecht19:49

Yeah? It's alright, it's alright. Yeah.

Mm-hmm. Yeah? Yeah.

Chris Hedge20:11

Right? So that's a money scheme right there. And then, okay, and

Then there's an incident. And then they're going to come in and find you because you didn't do the maintenance that you knew about, right? To keep the incident from happening. So it's a nightmare place to do business. Now, can you grease the skids a little bit? Oh yeah. Can do, I forget what we used to call it, but you can do community improvement projects.

Peter Brecht20:21

Mm-hmm.

Yeah. Yeah.

Chris Hedge20:37

And if you do enough of them to the right tune for certain cities, they'll, they'll grant you a permit. Right. I mean, and they're not small dollar things, right? These are not build a park. These are 90, a hundred million dollars just to get a freaking permit to do something that they require you to do anyway. Right. I mean, that's just the regulatory environment there. And again, we're offshore Santa Barbara. If you've been to Santa Barbara, if you haven't been to Santa Barbara, go, it's amazing. Right.

Peter Brecht20:37

Mm-hmm.

Okay. Yeah. Sure. Yeah.

Yeah, yeah, yeah. Amazing.

Yep.

It

Is, yeah. It's beautiful.

Chris Hedge21:03

Great wines too, it's the hidden gem of wine country. And basically they don't want to sit there and have this beautiful ocean view and see oil rigs off in the distance. They just don't want it in their backyard.

Peter Brecht21:05

Yeah.

Yup.

Right, right. Yeah, it's...

It's funny, to me, that's a beautiful sight. Most people, I guess they just don't like it. It's different opinion, but yeah.

Chris Hedge21:24

Well, if you

Have a $50 million house sitting on the cliffs with that beautiful view, you see it in some of the shows where it's just an amazing thing. If you pay that kind of money, your money's in the view, right? That's where the value comes from. So it's like anywhere else. You can do whatever you want. Just don't bring my property values down.

Peter Brecht21:29

Yeah. Yeah, yeah. Yeah.

Multi-millions, yeah.

Right, right, Yeah. But...

Right, but then there's the whole thing where they're like, well, we'll just instead of having the, instead of having the rigs, let's just go and put like, a hundred windmills like that. I think that's just as bad. So anyways, you think so? Yeah. Yeah. Santa Barbara. You're right. Yeah.

Chris Hedge21:55

All they'd fight that to they wouldn't they would not off santa barbara yeah you see any let

Me put this way do you see any windmills offshore

Peter Brecht22:03

Yeah, no. Yeah, for a reason. Yeah. Yeah. Yeah.

Chris Hedge22:05

No, they'll put them in San Joaquin Valley, right? They got

A nice breeze going through there. That should be pretty successful, but don't put them in my $50 million view, right? They just won't see it. And then if they, know, so they can't really control the offshore stuff, because I think they're, think, I'm not sure if the fields in state waters or out of state waters. I don't remember. But where they get you is trying to bring it on shore, right? I mean,

Peter Brecht22:12

Yeah. Yeah.

Yeah. Well, I'm really, I'm...

Don't either, Okay, yeah, with the pipelines, yeah.

Chris Hedge22:31

Chevron had a pipeline that came in and had to cross Highway 1, went under Highway 1. And anytime you had to do anything to that pipeline, it was just a nightmare because it crossed Highway 1. Scenic Highway, you're not touching our scenic highway. Don't shut it down. Don't take it offline. Don't create a traffic jam. Don't do anything. I even think we had you honestly, since we had a, since Chevron had not, I can't say we anymore. Since Chevron had that right away.

Peter Brecht22:38

Mm-hmm.

Okay, got it. Yeah, yeah. Yeah, right.

Yeah.

Chris Hedge22:57

We were being

Peter Brecht22:57

Yeah.

Chris Hedge22:57

Approached by fiber optics companies to utilize our right away to run fiber optic on shore, right? Because they're running the long lines in across the Pacific and they were trying to make a deal with Chevron to utilize that, that easement that we had under highway one to get their fiber optics on shore for communications. I don't know why the state of California was fighting that either, but they didn't want to give anybody an easement across highway one.

Peter Brecht23:00

Mm-hmm.

Okay. Yeah.

Right.

Mm-hmm. That's a good move, yeah.

Yeah. Yeah.

Well, I'm rooting for Sable. I mean, I hope that they come through on it. I mean, he spent a lot of money. They spent a lot of money for it, right? And I think that they're doing what they can.

Chris Hedge23:33

But what's their end game, right? What's their end game? So they bring it on shore. What are they going to do with it? Who's going to process it if all the refineries are shutting down?

Peter Brecht23:33

You're good. Yeah.

Yeah, that's true. Yeah, that's a good point. What we've got.

Chris Hedge23:43

Right? They gonna load it onto

Ships and take it elsewhere?

Peter Brecht23:46

That's a good question. Yeah, they're shutting down too. Well, I think they've already, they're already in process of being shut down too recently. So that's going to be a, I don't know. It's going to be an interesting, I'm, I'll be going to SIPA this year. It'll be an interesting room to hang out in and see how it's going. It's very, yeah. Yep.

Chris Hedge24:00

I mean, Chevron moved their headquarters out. Chevron's moving their headquarters out

Of California to Houston, which I didn't think they'd ever do because of the two refineries, right? And they have production in the San Joaquin Valley and they have the KLMR pipeline that runs up. I didn't think they'd ever do it, but.

Peter Brecht24:08

Yeah.

Mm-hmm.

Yeah, really, yeah, you're right. That's something I didn't think about. I mean, all this stuff kind of goes hand in hand and we'll, it'll be an interesting story to watch through the rest of the next couple of months. I don't know how much longer they're gonna be able to keep going. I know a couple engineers that are working actually on the platforms and I mean, they're busy as they can be, but again, like what is the end game? That's a great question. Yeah.

Chris Hedge24:39

But if they can't get the permit for the pipe, why

Don't they just look at, doing offshore loading and just take it, basically right out, right out of the ground. And then they'll just do, they'll have some big moorings and they can load the ships right offshore. They can find the vessels for it. Right. Cause again, if they try to bring it on shore, that the problem is the Jones act, right. They need us based shipping and there's not enough of it. So that means they got to take it somewhere else.

Peter Brecht24:53

Yep. Yeah.

Chris Hedge25:05

If they want to get around the Jones Act.

Peter Brecht25:06

Yeah, totally. I understand. So this is the last topic we'll get into. I like personally, I want to have you on next year so we can look back at this one and say, where did everything end up? And like, where are we at? Kind of like a cool snapshot. I just enjoyed talking with you. But if you were going to look at 2026, do you have a couple of predictions or thoughts on that? And then we'll move to wrap up after that. But I'm just curious what your outlook would be for the year ahead with oil and gas.

Chris Hedge25:32

Well, think I would separate. No, no, no. I'm going to separate. I'm going to separate oil from gas, right? Because I think, gas with the LNG facilities coming online. Now there's a limit, but I think, we're going to see, nice prices for gas. Just because, there's the demand for it and we have a way of getting it out to the limit of

Peter Brecht25:33

Or any other topics if you have a sports team and all that stuff, that's fine.

Okay, okay.

Chris Hedge25:56

The LNG facilities, right? I think there's more demand than we can build LNG facilities or liquefaction facilities to get it out. I'm kind of really pro gas, right? I think we're going to see a lot more gas drilling. Oil has been, over the last several years has been in the U.S. as we've been under investing, right? And yet if you, I say that and everybody, first thing that goes well,

Their productions going up. Well, yes, but that's more through efficiencies, clearing ducks and for other things, right? Rig counts are down for the most part on average. And we've just been under investing in production and that will catch up with us, which is why, which in the end, it will catch up with us. For currently, right, we're seeing prices lower for a lot of reasons, right? Venezuela being one of them, there's more oil on coming onto the market, but not that fast. It's that we've

Peter Brecht26:26

You

Chris Hedge26:43

Dramatically underestimated the effects on demand, right? So you get into that energy transition and demand isn't growing at the rate that it used to. So we're under investing. I think we'll see low prices through most lower prices, kind of probably around the $50 ish through this year until that, until the surplus is eaten up through increase, natural growth and demand.

Peter Brecht26:47

Yeah.

Mm-hmm.

Chris Hedge27:09

And then what's going to happen is going to swing the other way. We're going to start to see prices go up, right? As that production problem comes into effect. It's not like the old days where they're just in drill, baby drill, right? They're being very disciplined with their capital investment. The market has to, has to be there. They'll, they'll look to efficiencies to increase production, but you got to remember the U S decline rates, like 5 million barrels a day per year.

Peter Brecht27:13

Okay. Yeah.

Mm-hmm.

Mm-hmm. Okay.

Chris Hedge27:37

Right? So how fast, and that's how much they, so that's how much they have to reproduce in order to offset the declines and just stay where they're at, which is a lot, quite frankly. Right? So there's still a lot of investment, a lot of efficiencies, but we're not growing production intentionally. It's growing through more of an efficiency type of, type of issue. So I think.

Peter Brecht27:43

Right.

Okay. Yeah.

Okay.

Chris Hedge27:58

That'll catch up with us, but I don't think it'll catch up with us in 2026. I think it'll take a little bit longer depending on what's going on in the rest of the world, right? Short of somebody blowing up something or, Middle Eastern conflict. Something, yeah, well, something happening in the Middle East, right? It's a volatile region. It's so short of something like that or OPEC deciding, they're going to put a lot of the cuts back on to dramatically decrease supply to prop up price, right?

Peter Brecht28:06

Yeah, yeah, yeah.

Yeah, black swan event. Yeah.

Right? Yeah.

Yeah.

Chris Hedge28:27

So short of that, I think we should see moderate oil prices, which is great at the pump.

But probably below the sweet spot for investment until the increases in demand kind of offset the surplus that we're looking at.

Peter Brecht28:39

Gotcha. Well, that's a great outlook. Is there anyone that we should be following or looking at or reading that maybe you look at in the space just as other resources or anyone that you enjoy listening to or talking with?

Chris Hedge28:52

Not off the top of my I, I'm a, I said, I'm kind of intellectually curious and I kind of go where my curiosity takes me. But I mean, there are some certain things that I keep on top of, right? I mean, OPEC meets fairly recently or fairly frequently. And I try to keep up with what they're thinking, even though sometimes, what they say is not necessarily what's really going on. So trying to understand that.

Peter Brecht28:59

Yeah. Yeah.

Mm-hmm.

Chris Hedge29:15

The bigger picture geopolitics, because that'll obviously, if there's a conflict somewhere that will affect oil prices and trying to anticipate that. And then just looking at how production and demand are evolving over time. And that's a huge value chain from oil, gas, NGLs is a whole other area that we didn't talk about. And then chemicals also is a whole other area, but they're all interconnected.

Peter Brecht29:29

Okay, yeah.

Chris Hedge29:41

And then you look at the next wave as well, what's going on minerals and mining, what's going on a battery tech because and it's all around this energy transition. The energy transition is going to help. It's not driven by climate change. It's driven by necessity that oil and gas is a finite resource. And unless we come up with some sort of carbon recycling method, we're going to need to transition, right? It's really what climate change is all about is accelerating that, the transition.

Peter Brecht29:48

Mm-hmm.

Yeah.

Chris Hedge30:07

And there's a whole slew of issues that we could talk about that go around behind that. Right. But though, those are just kind of the topics I try, if you look at my audit automated Google searches, these are the topics that I look for. Every morning I come in here and I have, 10 emails that say, here's the summary of those topics that you searched on. And I can go through them pretty quickly and then follow up. And if there's something that really captures my attention or something, I'll just, I'll dig into it and write something.

Peter Brecht30:07

Okay.

Yeah.

Mm-hmm.

Love it. Well, Chris, thank you for coming on and talking with us. I'm going to put a link to your LinkedIn profile in the show notes. If you want to follow up and kind of keep in touch, that's probably the best ways or anywhere else that you are socially active on the internet that people should know about. Okay.

Chris Hedge30:37

No, thanks for having me.

God help me.

No, it's primarily LinkedIn because I like to, you

You get on some of these other places and it's all, it devolves into political discourse. And I would rather do it here because the comments I get here, yeah, you get a couple of the wild ones, but for the most part, they're thoughtful, right? And people, have thought about it and it's fine. Disagree, disagree with me all you want, right? I like that. I like to know, what am I missing? Right? What am I not seeing? What did I not find? So if you know something that I don't,

Peter Brecht30:53

Yeah. Yeah.

Yeah. Right.

Yeah.

Yeah.

Chris Hedge31:17

But it's just more of a professional environment. And I really appreciate all the comments that people feedback. And if you read the articles, tell me what you think. Right. Because again, there's no rhyme or reason to it. It's all whatever happens to interest me that day. And, I may look into something and it may spawn three articles. Right.

Peter Brecht31:20

Yep.

Yeah.

There

You go. Yeah, the content keeps coming. Well, thank you for coming on to all of our listeners. Yeah, to all of our listeners. Thank you for joining us on this special episode and we'll see you guys again here soon in a couple days. All right. Thanks. All right.

Chris Hedge31:38

No, I appreciate it.