Interview, Fireside Chat
Conflict keeps midstream compelling, integrateds see a pipeline of cash
- U.S. producers are expected to maintain capital discipline with no massive growth trajectory, while a base case forecasts a potential U.S.-Iran agreement within the next few weeks to reopen the Strait of Hormuz.
- Long-term oil pricing is projected to stabilize in the low $70 range by early 2028, up from previous high 50s pricing, though forward prices may dip further in the coming weeks if peace progress is perceived.
- Global strategic petroleum reserve building is anticipated over the next few years, driven largely by China refilling storage to capacity, creating a demand tailwind of approximately one million barrels per day.
- U.S. LNG is forecast to gain preference over Qatari LNG as nations sign contracts over the next year to secure redundancy against geopolitical supply risks.
- The transition to batteries and renewables is expected to accelerate over the next 10 to 15 years for energy security reasons, potentially causing the terminal value of oil and gas to begin declining in the 2040s.
- The oil market outlook remains positive for the next five to seven years due to restocking and structural changes, despite potential long-term headwinds including a projected demand plateau in the early 2030s.
- Iranian LNG production trains damaged during the conflict are expected to remain offline for three to five years, while a major Qatar LNG project delayed until at least the end of next year.
- Global LNG supply is forecast to remain balanced through 2030, eliminating previous bear case scenarios regarding oversupply between 2027 and 2031.
- U.S. pipeline regulatory environments are shifting to bring new projects online over the next two to three years, supporting gas demand growth of 3% to 4% and EBITDA growth of 6% to 7%.
- Long-term growth rate expectations for gas pipeline companies have been revised upward from low single digits to 6% to 7%, or approaching high single digits, driven by under-investment and data center demand.
- Smaller, pure-play pipeline companies directly linked to power generation may achieve double-digit EBITDA growth, with overall CapEx growth in the mid to high single digits translating to low double-digit EBITDA growth for impacted names.
- Venezuela oil production is expected to rise relatively easily by 200,000 to 300,000 barrels per day, but significant additional growth of one to two million barrels per day would require tens to hundreds of billions of dollars in capital expenditure.
- Full Iranian recovery could add 0.5 to 1 million barrels per day, creating a potential supply glut, while integrated oil companies are forecast to see double-digit valuations based on a long-term oil price increase of over $10 since the conflict began.
- Near-term gas gaps may be filled by increased coal usage, though a shift toward electric vehicles is anticipated over the next five to 10 years, with restocking benefits offsetting demand declines over the next three to five years.