Watching the Rex Tillerson confirmation hearings, I’m wondering how his move as the head of the State department, should he be confirmed, would impact oil and gas stocks. There’s a lot there to be considered.
The most obvious initial impact could be with Exxon-Mobil (XOM) itself. It’s not just in the psychological buying that would likely come into the market with the Ex-CEO becoming Secretary of State, it is the possibility of the reduction or outright complete rollback of Russian sanctions. Those sanctions have been the lone blockade to a half a trillion (yes, trillion) dollar potential of Russian oil development with which Exxon has a partnership agreement.
And while the immediate rollback of sanctions would look completely and transparently for the benefit of Russia and Exxon and likely to get scrutinized, I fully expect it to happen.
But let’s go a bit beyond the benefits to Exxon and Russia.
Here in the U.S., there have been several Trump statements on the campaign trail to ‘unleash U.S. energy potential’ and besides some obvious ideas of further opening up Federal lands for drilling or somehow increasing U.S. reliance on coal, there is one idea that might get us in front of a trend and make us some money.
Infrastructure bottlenecks that have plagued the natural gas industry for the past several years, but also oil takeaway as well. Basis price differentials in oil have helped keep Bakken…