"Take a simple idea and take it seriously" Reality over fantasies Actions over words Track records over forecasts Incentives / skin in the game equals outcomes
Joined June 2022
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$OIH $RIG $VAL $NE $SDRL $ODL.OL
Fredriksen is selling tankers at >cost and buying offshore drilling exposure (adding to $NOL.OL holding).
At some point an equivalent to the 'tanker bonanza' will happen to the offshore drillers: their rigs will be valued by the stock market at or above replacement cost.
Cyclicals are cyclical. Feel free to bookmark this.
Baron of Ivy Grottage retweeted
The Union killed Europe.
Ko smo se odločali za vstop v EU, si ni nihče predstavljal, da bo v kaki njeni članici in uniji nasploh mogoče brez posledic:
1. Razveljaviti predsedniške volitve (Romunija);
2. Ukiniti informativni program na nacionalni RTV (Madžarska);
3. Poslati policijo na Ustavno sodišče (Poljska);
4. Tri tedne pred volitvami poslati v zapor predsednika stranke, ki vodi v anketah (Slovenija);
5. Zasesti nacionalno RTV s policijo in zamenjati vodstvo (Poljska);
6. Prekiniti mandate vodstvu nacionalne RTV in izvesti čistko zaposlenih (Slovenija);
7. Poslati v zapor člane prejšnje vlade brez možnosti obrambe (Madžarska);
8. Podeliti skoraj milijon državljanstev ilegalnim migrantom po hitrem postopku (Španija);
9. Zapreti novo Nuklearno elektrarno in zgraditi plinovod do Rusije (Nemčija);
10. Obdavčiti ogljične energetske vire ob hkratnem zapiranju NE ter preseliti industrijo v države z nizkimi ekološkimi standardi pod pretvezo, da tako rešujemo planet.
Nastala je EU, ki se mora reševati sama pred sabo.
The "next big trade" is up >200% from 2025 lows - bandwagoning on pullbacks should work but expect more voices to "discover" offshore if bull run goes on - in 2021 everyone was bearish but at 2023 double top $RIG was more popular on the podcast circuit than junior mining 🤷♂️
Baron of Ivy Grottage retweeted
Some interesting quotes from offshore drilling earnings;
$RIG Roddie Mackenzie, CCO,
“This year, we are seeing the same thing in other places. So a good example is India, for example. There is $9 billion that has been earmarked for funding for basically large-scale exploration and development of their resources, and it is all linked to domestic production… We definitely are observing the NOCs getting after it. We actually would say that in India, ONGC moved very quickly from when they got the bids finalized for that tender to actually making the award, recognizing the scarcity of the rigs available. So we think there is gonna be a lot more of that. We think, basically, those that move quickest are the ones that are gonna secure the assets, and those that do not are going to be disappointed.”
India also came up in our recent conversation with Constellation, who called it a very interesting market on the rise.
“We are not going to reactivate one of those cold-stacked ships speculatively… As we think about cold stack reactivations, we think about the lead time to get them restarted and available to work. That is 12 to 15 months. So… one, it is not going to happen unless there is a contract and we are gonna recover that investment. And two, it is probably not happening in the next 12 months anyhow.”
$ODL Kjetil Gjersdal, CEO, on Norway
“With our recent contract awards, all of our rigs are now fully booked until late 2027, with the Deepsea Bergen booked until early 2031… We do believe that, both with our own contract awards and those of our peers, supply and demand have tightened even further in the harsh-environment segment. The tier 1 harsh-environment market is now almost entirely booked for 2027 and 2028, with very few assets having availability. With limited new supply likely being added in the near future, we believe this to be highly favorable for our business, and we do repeat our previous statement that new builds remain very unlikely at this stage.”
$SDRL Jacob Taylor, VP Commercial
“In Brazil, only the West Auriga currently has a clear availability in late 2027. Between April of 2026 and January of 2027, five drillships have left Petrobras’ fleet, three of which have departed the region altogether. In addition to Petrobras’ decision to release approximately one-fifth of its drillship fleet, they are not expected to award the next wave of drillship contracts until the first half of next year. We believe the West Auriga is well-positioned for regional and international opportunities in the beginning of 2028.”
Our barbers are, of course, telling us to get haircuts. The main "point" is that oil at USD 65 or USD 90 doesn’t really matter for the investment cycle. The oil majors plan on very long horizons, and the projects being sanctioned work at much lower prices; Transocean says operators are justifying them on breakevens of USD 50 and below. In my view this is a very durable upcycle. The real question is how fast it moves and when we hit the magical ~96% util level.
The largest question now is whether the slump in Brazil dampens dayrates in 2027. Petrobras has released about a fifth of its drillship fleet and won’t award again before H1'27. Rigs leaving Brazil for West Africa and Asia should help balance the market. What is clearly encouraging is that contracts are getting longer: the average new contract runs ~380 days, up from ~245 last year, and 2–3 year terms are becoming standard. That is usually the first sign of a strong market. Operators commit to longer terms when they start to worry about getting rigs at all, and day rates follow. It also helps lock up more supply, in weak markets rig are on the rollover carousel as they have little pricing power.
Newbuilds are off the table, and Transocean and Seadrill both refuse to reactivate cold-stacked rigs unless a contract pays for it, with a 12–15 month lead time. Any spare capacity comes back slowly, and only at prices that justify it.
Baron of Ivy Grottage retweeted
THE BULL CASE FOR CRUDE
Mercy, a Schelling-style competition in pain tolerance, requires costly signaling. You have to eat costs to signal resolve. The more painful the costs that are absorbed, the stronger the resolve signal since it faithfully distinguishes between a highly resolved 'strong type' from a poorly resolved 'weak type'. This is called a separating equilibrium in the theory of asymmetric information games.
'See how resolved I am? See how much pain I am willing to take to get my way? You better back down.'
Given the incentives and motivations of all politicians, particularly narcissistic ones, Trump's unwillingness to capitulate to save his party in the midterms is a very strong signal of his resolve. He may not have known the scale of the disaster that awaited him. But Susie is not stupid. She told him in broad terms the costs he was likely to bear if he did not make a deal. He chose to eat the costs rather than capitulate. Why?
The reason is that he is unwilling to give the concessions that the Iranians are demanding. I doubt he cares about the money. And Iran has been prepared from even before the war to make concessions on the nuclear file that he can sell as a great victory. So what is the blockage?
The blockage is quite specific and related to what I have called Iran's big ask. The Iranians are demanding that the US accept their authority over Hormuz. People have misunderstood this issue from the very beginning. It is not about tolls — tolls are not the end of the world. It is not about Iran's ability to shoot at ships — that is not going anywhere regardless of any agreement.
The issue is that US-Iran agreement that gives Iran the authority to regulate transit through Hormuz is tatamount to the US accepting Iranian mastery over the gulf. Iran would be able to use the Hormuz weapon against the Gulf Arabs, targeting them individually to secure compliance with its foreign policy objectives. It will be able to similarly coerce countries that rely on access to gulf energy: Japan, India, the Europeans. And it will be able to do so without triggering a casus belli.
As @vali_nasr put it, surrendering Hormuz to Iran will turn the gulf into an Iranian lake. And this in turn would turn Iran into the fourth world power, as @ProfessorPape pointed out very early on the pages of the NYTimes.
So the Hormuz question is really about who will be the master of the gulf. Trump or any other US president cannot surrender Hormuz under anything except extreme duress. For imperial managers, such a surrender is almost unthinkable. It is a very difficult pill to swallow because it blows US pretensions to global primacy to smithereens.
Why are the Iranians demanding mastery over the gulf as the price of letting the US go? The answer is that the Iranians came to believe as early as March that the Hormuz weapon is their get out of jail free card. It a gun cocked at the head of the West. Without it, the West will place them into the sort of box it put Saddam in after Kuwait. With it, they can rely on a balance of economic terror to keep the West in line.
So one can see the point of the big ask. But at what price? As far I can tell, the Iranians are resolved to hold fast for as long as it takes, even if it takes many years.
What we have learned from the midterms is that the US is also highly resolved. There is a chance that we get a post-imperialist president in 2029, one who is willing to capitulate on the Hormuz question as part and parcel of a general abandonment of the empire and pull back to the western hemisphere. But it is only a small chance. The bulk of the probability is that the US will remain resolved for years until the costs become truly prohibitive. The empire is prepared to die on this hill. At any rate, there is no reason now for the Administration to capitulate right after it has paid such a hefty price.
That is why there is not going to be a deal. That is the bull case for crude.
Baron of Ivy Grottage retweeted
Incredible how many people think this button exists and Trump just chose to not press it
Mr. Vice-President,
Please allow me to present a different perspective.
The problem was not the Iran War. It was the cease fire.
If you start a war, you need to win it and finish it – otherwise don’t start it.
This war should have been over six months ago, with the Strait of Hormuz wide open and oil flowing. The second and third tiers of Iranian leadership should have been destroyed, and we should have supported the pro-western forces who could have taken leadership. We stood on the brink of a new, more peaceful Middle East - and then we blinked. We had a chance not only to deny Iran nuclear weapons, but to get rid of the world’s biggest supporter of terrorism.
Instead, we had a cease fire, which was followed by months of will we or won’t we finish the job. Every day was a different message. There still is. Is the war over? Is it about to begin? No one knows. There is confusion and inconsistency.
In June 2025, America was not involved. This was an Israel vs Iran issue.
No one forced the United States to attack Iran then, or in February of 2026. It was a decision made by President Trump. In my opinion, it was the right decision.
Once the decision was made, we should not have stopped until the regime fell. But instead, you negotiated a cease fire that didn’t last, didn’t work and left us in no man’s land, with higher prices and our troops still deployed.
Our troops could have been home, the Navy returned to its bases, a peaceful regime in place , new alliances forged, and gas prices below $3.00 a gallon.
No, Mr. Vice President. It’s not the war. It’s the so-called cease fire.
Baron of Ivy Grottage retweeted
The problem with Thing That Didn't Work Last Time Or the Time Before That is that we did not do enough of Thing That Didn't Work Last Time Or the Time Before That.
We must keep doing Thing That Didn't Work Last Time Or the Time Before That until it becomes Thing That Works.
*gasp*
“a short but intensive operation … [to target] Iran’s energy infrastructure, nuclear facilities, and missile and drone arsenal. Some officials say one more big round of attacks could push Iran’s economy over the brink and force the country to make diplomatic concessions after nearly eight months of conflict”
💯. Exactly same here in UK.
I paid no attention to the election. Watched exactly 0 minutes of news coverage in the last 2 years. Did the same thing in 2024.
I learned long ago that these elections are meaningless, necessary evils, as if a choice between slicing off my thumb or my big toe is a choice, and that's how this crap works. There is no choice, only the illusion of choice.
Not one politician gives a f*ck about me, so I don't give a f*ck about them. Voting for which deck chair to throw off the Titanic will not stop the inevitable sinking.
In the US, celebrating or mourning political outcomes is fools errand. My life today is exactly the same as yesterday.
Control what you can. Your health. Your family. Your happiness. Your mental sanity. Inviting politics in your life is like inviting in a pack of rabid hyenas in your home... protect your home.
Baron of Ivy Grottage retweeted
Pretty Rebeccah clearly has zero conception of the military realities that have been revealed as a result of both the war in Ukraine and the episodic wars with Iran.
There is nothing Iran, Russia, and China desire more than for the US to desperately attempt to snatch some semblance of victory from the jaws of what is unquestionably the single greatest strategic military defeat in American history, which continues to play out in West Asia.
The Iranians are champing at the bit to go another round on the battlefield with the Americans. They have surprises they sorely desire to spring, and are just patiently waiting for the appropriate moment to do so.
At some level — at least among some of the more discerning field-grade officers at the Pentagon — there simply must be an understanding that further war against Iran entails greater risks of humiliating disaster than anything the US military has faced in living memory.
I suspect some are doing their best to warn the senior brass of the dangers — but I expect it will fall on deaf ears.
The influence of the #EmpireAtAllCosts cult is very likely to hold sway when it comes to this weighty decision to relinquish empire or set the world on fire in a futile attempt to arrest its rapid decline.
Republicans supported the decision to go to war against Iran. I think we have to take into account the unhappiness with status of the war, but the support fell when officials started saying things like the terrorists in Tehran want a new peaceful path with the U.S. as they were literally shooting at our forces. Once the decision to take the fight to Iran was made, we needed to follow through and Trump should’ve put Sec Rubio and Adm Cooper in charge of explaining it to the electorate. Still should.
Baron of Ivy Grottage retweeted
Are you fucking kidding me?
We have for years been underwriting a genocide. We will continue to do so despite this rebuke. We murdered half the leadership of a country and killed scores of schoolgirls when we launched a war of aggression out of the blue, at the behest of a genocidal Apartheid regime we arm and protect.
Right before our latest rampage in the Middle East, we kidnapped another head of state in our backyard and handed over the colony to our Secretary of State to run. Meanwhile, we are carrying out a merciless economic war against an island nation nearby. Thousands have been thrown in jail for minor immigration violations, thousands more have been deported in chains. Our life expectancy is a decade shorter than all our peers and even China.
Vast majorities have been opposed to all these policies. But our system remains captured by domestic and foreign oligarchs. No matter who we elect, nothing ever changes. You call this a democracy?
Congressional turnover is not democracy. Democracy is when voters constrain policy, if not dictate it. Wake me up when Congress is no longer captured by a foreign power.
Baron of Ivy Grottage retweeted
Losing gambler energy, can't walk away from the table. Boss is prepping the next war phase while America teeters on an Israel-First cliff. Skip the TED talk. Why not say this to your boss?
One of the things the data analysts on our side obsessed over was "composition"—whether the electorate looked close enough to 2024 for Republicans to win. And despite polls that showed a Democrat blowout, the data kept on telling us the same story: in some states turnout was merely OK, in other states it was downright amazing, and in no state was it catastrophic. There was a genuine sense of optimism on our team: our people were showing up.
So, I asked the smartest data guy I know, does that mean we're going to shock the world? "No," he told me. "We might do better than the polls suggest. But the data is telling us that a lot of Trump/Vance 2024 voters are pissed and planning to vote for the other guys. Our voters are turning out, but they may not vote for us."
Well, that looks prophetic now. Our voters did show up. In Florida, for example, the electorate was 9 points more Republican than Democrat, just a couple points worse than 2024. Undoubtedly there were places we could have done better on turnout. But the main problem is not turnout. The main problem is that many people who voted for Trump/Vance in 2024 voted for Democrats in 2026.
There will be a lot of infighting and arguing over what happened and why that is. One of the pollsters I really respect told me that our economic messaging wasn’t sharp enough down the stretch. I’m sure that’s true.
But the real reason we lost is obvious to almost everyone.
Another pollster—one of the smartest people I know in politics, told me yesterday we’d lose the generic ballot by 13 points. I felt negative going into Tuesday, but even I was shocked by this. In his polling, he saw that a lot of Trump 2024 voters were angry and planning to vote for Democrats. He asked those voters who had abandoned us what would cause them to come back on our team. The top four answers, accounting for nearly all of the responses were:
1) End the war
2) Focus on cost of living/inflation
3) Put America First
4) Change our relationship to Israel
Our voters showed up. And the above four reasons are why many of them voted for Democrats. This is according to a pollster who nailed the results. While many spent Monday attacking Rachel Campos Duffy for calling for a diplomatic resolution to the conflict, it turns out her political advice was sound. (She’s also a great person.)
In the next few months, there's going to be a lot of gaslighting. Expect to hear any number of establishment politicians say the solution to our woes is amnesty. I'm open to the idea that we should change enforcement—by focusing more on businesses that hire illegal labor, for instance. But anyone pushing amnesty is lying to you.
The reason we lost is the war. The president himself said so last night.
If you'd like to argue it was worth it, that losing the Senate for the next 6 years was worth it, then do so. Argue it was a worthwhile cost to pay. Agree or disagree, that's at least honest.
But everyone knows why we lost. And any honest conversation about where we go from here must start there.
I remain hopeful about our country. To the people who are pissed off and want to say, “I told you so”: you’re right, you did tell us so. Take that energy into electing Republicans who share your worldview. To the people who are just pissed at the results, you should be. Let’s take that anger and get back to the work of saving our country.
Like this!
The biggest life hack is becoming impossible to embarrass.
Rejected by a girl? Cool.
Went somewhere alone? Cool.
Posted something everyone hated? Cool.
Failed publicly? Cool.
People talking shit about you? Cool.
Most people live incredibly boring lives because they’re terrified of looking stupid.
Nobody truly cares anyway.
Baron of Ivy Grottage retweeted
Baron of Ivy Grottage retweeted
I made Iran's 7 demands into an easy-to-understand chart.
If you think the US Gov is even partially run by Israel, then you know there is no deal here.
And even if there is, it only lasts a couple weeks anyway, before all promises are broken because they're all complete liars
Iranian officials have left Doha following indirect negotiations with Washington, as a draft proposal for a potential agreement circulates
Iran's 7 conditions to end the war
1. End all military hostilities across the region, including Lebanon, Yemen, Iraq and Gaza.
2. Release frozen Iranian assets held in foreign banks.
3. Lift the U.S. naval blockade of Iranian ports.
4. Remove economic and political sanctions against Iran.
5. Withdraw U.S. troops from the region.
6. Pay war reparations for damages caused during the war.
7. End U.S. threats and hostile rhetoric directed at Iran
Baron of Ivy Grottage retweeted
Monthly $RIG
Transocean with the highest monthly close in 3 years. $RIG also close right at the neckline of my inverse head and shoulders bottom on a monthly closing basis.
I would be very surprised if this stock does not test the 2023 highs by the end of the year.
One step at a time.
Baron of Ivy Grottage retweeted
Making the national grid weather dependent was the most retarded thing Britain has ever done.
Europe is facing its first prolonged period of cool, cloudy and windless weather this heating season, squeezing renewable generation at a time when power prices are already at the highest levels since 2022. bloomberg.com/news/articles/…
Baron of Ivy Grottage retweeted
Grid balancing used to be relatively trivial. The function of the national grid was to maintain a certain frequency, with generally predictable fluctuations - which were managed with the use of spinning reserve, which was integral to large coal power stations. Diffuse intermittent generation (wind) made a manageable feature of the grid an unmanageable crisis, especially after demolishing spinning reserve capacity. The more intermittent generation we add, the more acute the problem becomes, because the fluctuations are much larger.
There is no cost effective way to make wind viable. Batteries are expensive, and were only ever intended as short term grid balancing tools. They simply cannot offset the wild fluctuations created by wind, nor can the span the gaps created by weeks of low wind. As such, renewables have made us more reliant on gas and more susceptible to price spikes.
Wind advocates argue that it's a grid capacity issue, which is partly true, but is ultimately misdirection. Accepting this argument means having to invest tens of billions in otherwise unnecessary transmission lines and related infrastructure, which adds to the capital costs of wind (which doesn't appear on the wind energy balance sheet) on top of exorbitant subsidies and market rigging.
The renewable energy lobbby has always depended on the technical illiteracy and gullibility of journalists, politicians and activists, but those of us who took the time to understand the system were predicting this crisis as far back as 2007.
Nothing I'm seeing unfolding in recent years is remotely surprising to me. Most of this was explained to me by an SSE energy trader when I worked there. They knew it was a problem, but it wasn't their problem. They were subsidised to build windmills and taxed to shut down their power stations, so as a business, that's exactly what they did. Now it's our problem and we're paying through the nose to keep the lights on.
Hold on Pete. I don't agree with Bob, but that doc doesn't admit that having wind power creates instability.
Balancing costs arise because demand is in the south and we don't have the lines to transport generation from the north. Overloading the lines will cause instability, regardless of what you use to generate that power.
Baron of Ivy Grottage retweeted
You can’t chose between your children, nor can you chose between your drillers.
But what matters most is that you pick one, or all of them.
In this case their feelings won’t be hurt.
Offshore Is the Next Big Trade
Betting on the Offshore Oil Upcycle read.aurelionresearch.com/p/…
