The refinery chemistry angle here is what most geopolitical analysis misses. When u build cokers specifically for high-sulfur, acidic feedstock, switching to lighter crudes isnt just expensive, it fundamentaly breaks the process economics. I worked adjacent to refining logistics a few years back and the capital lock-in is real. Once those coking units are installed, operating them on anything but heavy sour crude is like running a Ferrari on diesel, the hardware doesn't match the fuel.
Thank you for explaining this situation. The U.S. now has control of Venezuelan oil and China has a monopoly on silver, gallium and other vital metals, do you see a way forward for negotiating. Each has what the other wants after all.
I’m new to all of this and am learning with each of your posts. Thank you.
Just having TMX capacity and Chinese money doesn’t solve it. U.S. Gulf refiners will be bidding for the same heavy barrels, so the discount likely shrinks. TMX helps with access, not with keeping it cheap.
The refinery chemistry angle here is what most geopolitical analysis misses. When u build cokers specifically for high-sulfur, acidic feedstock, switching to lighter crudes isnt just expensive, it fundamentaly breaks the process economics. I worked adjacent to refining logistics a few years back and the capital lock-in is real. Once those coking units are installed, operating them on anything but heavy sour crude is like running a Ferrari on diesel, the hardware doesn't match the fuel.
Well said. Once those cokers are built for heavy sour, switching feed isn’t just pricey, it stops making sense.
and that Ferrari line is perfect.
Won’t this just cause China to further increase the speed of electrification of its economy?
Eventually yes, but electrification doesn’t replace diesel fast enough.
This is a level of understanding I just don’t get elsewhere and I read a lot. I really appreciate you and your coverage.
Thank you, Penni. Appreciate you sharing your thoughts.
Thank you for explaining this situation. The U.S. now has control of Venezuelan oil and China has a monopoly on silver, gallium and other vital metals, do you see a way forward for negotiating. Each has what the other wants after all.
I’m new to all of this and am learning with each of your posts. Thank you.
Thanks, much appreciated. Might be some room to talk, but a clean swap seems unlikely. If anything moves, it’ll probably be quiet.
TMX has the capacity to increase supply, China has the money, so that would seem to be the play I would think?
Just having TMX capacity and Chinese money doesn’t solve it. U.S. Gulf refiners will be bidding for the same heavy barrels, so the discount likely shrinks. TMX helps with access, not with keeping it cheap.