We are now recording an audio version of written posts that we will upload to Apple, Spotify, and YouTube, which you can listen to by clicking the button the play button above.

As the Strait of Hormuz (SoH) Crisis completes its third month and on-again/off-again peace talks drag on, we are starting to see the outlines of various structural themes emerging, and, as importantly, some that are not. Thematically we see the following:

* Power Surge! Our Power Surge! super-cycle theme has not only not been knocked off track by the SoH Crisis, but has likely been enhanced based on “the four Ds” of pragmatic energy policy orientation we discuss below. Recently completed 1Q 2026 earnings season shows the AI (artificial intelligence) and broader digital transformation theme is as strong as ever.

* Geopolitical Super Vol. Geopolitical Super Vol remains our commodity macro framework, in particular for crude oil prices. Since Russia-Ukraine and through SoH-to-date, we have resisted crude oil super-cycle framings while also, importantly, rejecting perma bear doom-and-gloom. The unforgiving math of global oil demand being forced down to circa 95 million b/d of supply from around 105 million b/d pre-crisis suggests recession is the most likely clearing mechanism rather than a structural increase in long-dated oil prices in the event a significant disruption to flows persists. To be clear, we do see scope for a modest increase in long-end oil on the order of $10/bbl to account for both cost inflation and an increased geopolitical risk premium.

* Molecules to markets. In our view, getting molecules to markets is the more pressing strategic imperative for countries than simply trying to find the molecules in the first place. In traditional energy, this puts a premium on well-positioned midstream and downstream assets. In the upstream business, there is always an opportunity to find acreage that is well positioned on the future cost curve. Having a midstream or downstream solution (e.g., LNG) may be an increasing success factor for larger E&P (exploration and production) companies.

* New business models > pure-play (for larger companies). The era of extreme pure-play specialization we think will fade, or at least will no longer be the dominant ask of investors. Business model evolution is likely to continue to separate leaders from laggards. Examples we find intriguing include pressure pumpers and midstream companies diversifying into behind-the-meter (BTM) power, US shale gas producers expanding into midstream and potentially LNG, refiners that have grown midstream capabilities, midstream companies that have grown export opportunities, and the expanded commercial trading opportunities that larger companies have pursued. The list is growing.

* Brownfield > greenfield (usually). The advantage of doing more from existing assets is something both countries and companies have in common. Brownfield almost always beats greenfield on profitability and speed-to-market, though a best-in-class greenfield project like Guyana oil is the type of exception that exists to the general rule.

From an energy policy perspective, the Strait of Hormuz Crisis reveals what we are now calling the four Ds of country-level energy policy aspiration:

* Do as much Domestic production as possible;

* Diversify energy sources and technologies;

* Do more from existing assets; and

* embrace Digital transformation and AI.

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The Four Ds of Pragmatic Energy Policy

The four Ds are the pragmatic policy implication of country leaders recognizing energy’s natural hierarchy of needs (Exhibit 1). On the right side of Exhibit 1, we rank (higher on list is better) resource rich countries and resource challenged areas in terms of federal policy orientation that recognizes energy’s natural hierarchy of needs and implementation of the four Ds relative to a given country’s strengths and weaknesses.

Saudi Arabia and United Arab Emirates among resource rich regions and China among resource challenged areas we see as having favorable federal energy policy orientations. Laggards are not surprising: Western Europe, California, Canada, and Australia. What KSA, UAE, and China have in common are national leadership that emphasizes the ideas of “all of the above,” maximum (or optimal) output of what you can control, and unapologetic “their own country first” mentalities.

Super-Spiked subscribers know we have a very favorable view of Canada’s oil and gas potential and the leading companies in the province of Alberta. We had an unfavorable view of the federal energy policies pursued by the prior Trudeau regime, with the jury out on the current Carney administration. On the latter, we appreciate that the rhetoric has improved off a low starting point. The proof will be in the policy implementation pudding.

No country should aspire to follow the path of California or Western Europe and their “climate first” ideology (dishonorable mention goes to many states in the US northeast). Sadly, poor energy policy choices made in those areas are going to mean that less fortunate consumers and businesses in developing Asia suffer from being outbid for needed energy like LNG, jet fuel, and diesel during times of stress, as we last saw in the early days of Russia-Ukraine. It has been some time since we have done a deep dive on Australia; our sense would be that it is in the Canada category of having substantial oil and gas resources that the world would massively benefit from, but is being held back by ill-advised climate-first ideology by its national leaders.

Exhibit 1: A Hierarchy of Energy Needs & Country Policy Objectives and Orientation

Source: Veriten.

Doing More From Existing Assets

In previous issues of Super-Spiked, we have discussed three of the Ds: do as much domestic production as possible, diversify energy sources and technology, and embrace digital transformation and AI. Therefore, in this post we will expand on the “do more from existing assets” theme.

* A major advantage the developed world has over China, India, and other developing areas is a large installed base of assets and infrastructure. Prematurely retiring old power plants in the name of “energy transition” and “The Climate Crisis” is the type of 2020-2023 mistake that has hurt competitiveness and affordability in the United States and Western Europe. In power generation, we are intrigued with trying to answer the question of how much new generation from legacy sources (e.g., natural gas, BTM, and traditional nuclear) is needed versus how much new generation technology is needed (e.g., fuel cells, enhanced geothermal, advanced nuclear) versus how much can existing grid utilization be improved via flexible loads and various grid enhancing technologies. How much more can we get from existing is important to how much we need from the other two options.

* In crude oil markets, we do not believe there is the urgency to figure out “what’s next” from a resource perspective as there was in the 2004-2014 super-cycle. To be clear, this comment is intended at the macro level; individual companies are almost always in need of figuring out what’s next. Exploration and capital spending is likely to grow but we do not believe the kind of re-rating that happened during China/BRICs is warranted now. Rather we are most intrigued with what companies are doing to extend asset life (i.e., resource to production ratio) via a combination of technology application, business development, and midstream/downstream investment that can ensure molecules get moved to markets and turned into usable end products. Ironically, the Middle East looks like a compelling upstream opportunity for western oil and gas firms, given improved fiscal terms in certain areas. We have long held a favorable view of Canada (our concerns about its federal energy policies notwithstanding) and Alaska. Recent developments in many Latin American countries warrant a fresh look at the region for western players.

* The largest areas that seem ripe to “do more from existing” include US shale oil, US shale gas, Middle East oil, Canada’s oil sands, Venezuela oil, and developed market power grids.

Growth and opportunity

The five areas of energy where we are most confident in growth include:

* US and global power generation

* Midstream and downstream infrastructure for crude oil and various metals and minerals

* Grid enhancing technologies

* US and global natural gas

* Renewables and storage

The long-term opportunity to grow nuclear power is going to prove to be compelling for many countries, justifying the required patience in terms of time to development. Nuclear is the ultimate baseload, domestic, clean energy source.

We remain open-minded about emerging and new energy technologies. We are seeing current growth in fuel cells and optimism about enhanced geothermal on the power generation side of the business. The SoH Crisis will accelerate adoption of electric vehicles and LNG trucks in particular in oil importing countries for diversification and affordability reasons.

The success of new business models should diminish investor and activist demand for pure-plays

There is a misperception that investors prefer pure-plays or that investors only want more dividends and stock buybacks. Investors prefer companies that generate superior profitability with differentiated growth. Both are needed to sustainably outperform: profitability AND growth.

The challenge in mature, cyclical sectors is that corporate over-enthusiasm for growth usually erodes profitability to the point where investors demand a disavowal of growth in favor of profitability and returning capital to shareholders. To be sure, if structural demand growth for a given commodity is something like 1%-2% per year, the expected growth rates for the largest companies within that sector is unlikely to be any more than +/- 1%-2% of the broader demand trajectory.

As businesses mature and growth slows, the demand by investors to focus on sub-parts of the business often increases in order to enhance the combination of per share growth and profitability for a particular business segment. The post-2014 oil super-cycle bust and growth in U.S. shale turbocharged the demand for pure-plays, especially within the traditional oil & gas value chains. Certain pure-play shale oil producers, midstream companies, and refiners in fact performed exceptionally well.

Power is clearly in a super-cycle and traditional oil and gas is operating with a Geopolitical Super Vol macro backdrop (a dramatic improvement from the post super-cycle bust phase of 2015-2020) and business opportunities abounding in the different product lines and geographies.

SoH Crisis FAQ

Question 1: Has an oil super-cycle begun?

Answer: No. Our core view remains Geopolitical Super Vol, not super-cycle.

Q2: Have the odds of “peak oil demand” increased?

A: No, we don’t think so. However, we are concerned that if the Strait remains significantly disrupted that the painful adjustment down in global oil demand could mean that we spend a good part of the remainder of this decade recovering back to pre-crisis demand levels as incremental supply is brought online. In our view, the timing of a more permanent peak in oil demand is unknowable so long as the other seven billion people on Earth continue to use only a fraction of the energy The Lucky 1 Billion of Us take for granted.

Q3: Isn’t AI and the resulting power demand growth forecasts a bubble waiting to pop?

A: No or, perhaps more accurately, not at this time. The fact that numerous stock markets like the U.S. (S&P 500), Japan (NIKKEI), and South Korea (KOSPI) are at or near all-time highs may indeed reflect complacency with the risk of global recession due to the ongoing SoH Crisis. We would differentiate stock market complacency with an AI bubble. We see it in the areas where we spend a lot of time: digital transformation and the application of AI is a game changer for numerous businesses. The stock market may well experience a major correction if the world tips into recession. Whatever short-term setback that might mean for near-term power generation we think would be akin to the Great Financial Crisis hit to oil demand in the middle of the China/BRICs super-cycle of 2004-2014, i.e., it was temporary.

Q4: Don’t investors prefer “pure-plays” over diversified companies?

A: That view is missing our point. Investors prefer companies with competitive profitability and differentiated growth opportunities. The demand for “pure-plays” typically is the result of a mature sector experiencing a structural downcycle and investors being disappointed on both profitability and growth. And for sure, some companies should remain as pure-plays. The larger a company’s market capitalization and overall size, the less we think a pure-play business model makes sense, be it basin or geography or asset type or business line. For small-caps and new technologies, the pure-play business model is often logical.

Q5: So E&Ps will merge with refiners?

A: No, we aren’t expecting that type of integration or diversification. A future “integrated E&P” likely means some combination of midstream and commercial exposure as opposed to a historical upstream-refining mix, as an example.

⚡️On A Personal Note: Work Hard. Golf Hard.

It’s been a great three-week stretch of Spring golf ramp-up. 8 rounds in 5 days in and around Troon, Scotland the first week of May and then our NJ club’s flagship member-member Governor’s Trophy tournament over Memorial Day weekend featuring 45 holes of match play over 2 days. Day 2 of Governor’s featured a good Scottish cold snap of low 50s weather and a light drizzle. Glad my rain pants got more work in and happy to be in sunny Houston as I finish writing this.

At Governor’s you can always see the short-game comfort from the returning Florida crowd versus those that stayed north over what is typically a 4-5 month winter hiatus. I failed to take advantage of part-time Houston residency this past winter and my partner and I didn’t win our flight for the first time since 2021. Five 3 puts—FIVE!!!—from yours truly in Round 2 and two more missed make-able putts in Round 3 were seven half-point giveaways we did not overcome. Based on my accounting, my partner cost us only 2 points versus my 3.5, so the disappointing performance is on me. I’ll need a stricter winter routine next year.

I will say the Scotland golf intensity helped stamina at Governor’s. The intensity and deliberate pace of hole-by-hole match play is usually mentally and physically draining. I didn’t feel that this year. For future reference: I need to play 36 more often! It forces an easier swing. It improves mental resilience. Seems better than a cold plunge.

Does a high level of golf intensity make you a better energy equity analyst, advisor, or board member? For sure it does. There is no question about this. Are we advising our companies to settle for mediocrity? That an 8% return on capital is good enough? That sector average TSR is fine? Of course not.

Work Hard. Golf Hard.

A Lot of Great Golf In Scotland: Western Gailes Near The Top Of My List

Source: Super-Spiked selfie.

The Calm Before The Governor’s Trophy Storm

Source: Super-Spiked.

⚖️ Disclaimer

I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.

Subscribe to Super-Spiked to receive all content via email. Also available on https://veriten.com.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

WATCH the video on Substack by clicking the play button above or on YouTube (here).

STREAM audio only on Apple Podcasts (here), Spotify (here), or your favorite podcast player app.

DOWNLOAD a pdf of a moderately edited transcript using the blue Download button below. There is no PowerPoint slide deck this week.

This week we introduce the topic of how to think about energy equity valuations given a Geopolitical Super Vol macro backdrop. Traditional valuation metrics like EV/EBITDA are likely to prove especially unhelpful at a time of major geopolitical uncertainty and commodity volatility. We harken back to the framework we used in the early 2010s for US refiners when Brent-WTI first blew out to around $20/bbl when surging shale oil production unexpectedly filled up pipelines and infrastructure. At the time, investors treated every press release of a contemplated pipeline reversal as solving the bottleneck. Spreads did ultimately narrow meaningfully, as expected, but the transient “above normal” cash flows were not worth zero as the market was initially ascribing. Our framework gave “one-time” credit to temporary cash flows and full credit for our estimate of mid-cycle earnings. This is not a perfect analogy for a geopolitical event like the Strait of Hormuz, but we think the framework is a good one for this environment.

📜 Credits

* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.

⚖️Disclaimer

I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.

Subscribe to receive all content. Also available at Veriten.com..

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

WATCH the video on Substack by clicking the play button above or on YouTube (here).

STREAM audio only on Apple Podcasts (here), Spotify (here), or your favorite podcast player app.

DOWNLOAD a pdf of a moderately edited transcript and the slide deck using the blue Download buttons below.

This is the 100th Super-Spiked video podcast. We’ve also had an additional 114 written posts that for no obvious reason we account for with its own numbering system, a point that we are sure is of interest to no one and we will merge going forward in case you are wondering why we’ll jump to #215 next week. In celebration of our 100th episode, we recorded this a week early ahead of a guy’s golf trip to Scotland, where we’ll be playing Turnberry, Prestwick, Royal Troon, and Western Gailes. 8 rounds in 5 days is way to ambitious for a bunch of guys in their upper 50s. More on that in the On A Personal Note at the end of this video.

Our key focus this week will be discussing how we think the world should think about energy macro scenarios. It should not surprise anyone that we do not believe the world will go back to viewing CO2 as an organizing principle for energy. We have been asked if not “net zero” then what? We attempt to answer that question this week. We start off by taking a look at the key themes from 2022 at the start of Super-Spiked. Those initial themes have stood the test of time.

This 100th episode is targeted at a combination of corporate executives, board members, policy people, and the macro economics and sustainability people within companies. It’s probably not for everyone, but that has been one of our philosophies. We are not looking to maximize views of Super-Spiked. We hope it will be accessible to everyone, but this one in particular is aimed at a smaller subset of key decision makers.

0:00 Introduction

2:06 Our Key Themes from 2022 Have Stood the Test of Time

11:40 Won’t Net Zero Make a Comeback in 2028?

17:31 If Not Net Zero, Then What?

21:46 How Should Energy Macro Scenarios Be Reframed?

23:30 On A Personal Note

📜 Credits

* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.

⚖️Disclaimer

I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.

Subscribe to receive all content. Also available at Veriten.com.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

WATCH the video on Substack by clicking the play button above or on YouTube (here).

STREAM audio only on Apple Podcasts (here), Spotify (here), or your favorite podcast player app.

DOWNLOAD a pdf of a moderately edited transcript and the slide deck using the blue Download buttons below.

This week we have some quick comments on a trio of topics including (1) macro risk/reward at the two-month anniversary of the Strait of Hormuz being closed, (2) UAE’s decision to withdraw from OPEC, and (3) the attractiveness of Canada for energy investment. All these themes fit well within our Geopolitical Super Vol theme.

0:00 Introduction

0:42 Macro risk/reward at the 2-month anniversary of the Strait of Hormuz being closed

8:27 UAE’s decision to withdraw from OPEC

13:08 The attractiveness of Canada for energy investment.

17:45 On A Personal Note

Subscribe to receive all content. Also available at Veriten.com.

📜 Credits

* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.

⚖️Disclaimer

I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.

Subscribe to receive all content. Also available at Veriten.com.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

We are now recording an audio summary of written posts that we will upload to Apple, Spotify, and YouTube and you can listen to by clicking the button below.

This week we expand on the Energy Technology component of our Geopolitical Super Vol framework we introduced last week (here). The massive unmet energy needs of the other seven billion people on Earth were already driving investment in new energy technologies in particular for countries not blessed with sufficient domestic resources like crude oil, natural gas, or coal. A backdrop of structurally increased geopolitical uncertainty and turmoil, in particular amongst the largest economies in the world, will drive a doubling, tripling, and quadrupling down on a wide swath of new technologies that help meet energy needs. For The Lucky 1 Billion of Us, there is a need to invest in the technologies that allow our industries to compete in a host a new areas and to no longer simply cede all manufacturing to China and other Asian countries—as the U.S. and Western Europe have done over the past 25 years.

The new technology areas we are most interested in span four broad buckets:

* Grid optimization and enhancement

* Power generation

* Demand diversification opportunities, which encompasses areas like EVs (electric vehicles), LNG (liquefied natural gas) trucks, and energy efficiency

* Manufacturing and industrial competitiveness via physical AI, robotics, and automation

In this post we:

* differentiate between “Energy Tech,” which we believe has a very favorable outlook, and “Climate Tech,” the latter of which always seemed non-sensical to us.

* highlight the key areas we are watching most closely within the new technology buckets noted above.

* provide a progress report on hyperscaler profitability given the massive ramp in CAPEX seen by those companies.

* highlight Aramco as an AI and technology leader.

The opportunity for investment spans a broad spectrum of companies, technologies, and regions across a range of sectors including technology, industrials, traditional energy, new energies, power, infrastructure, metals, minerals, and mining. In a nutshell, Energy & Power + Technology + Industrials + Metals & Materials convergence.

For all Super-Spiked content, follow me at https://arjunmurti.substack.com or at https://veriten.com.

X (Twitter): @ArjunNMurti

DISCLAIMER

My views are my own and not attributable to any current or past affiliation.

CREDITS

Intro & Outro music: Wolf Hoffman on Apple Music: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

WATCH the video on Substack by clicking the play button above or on YouTube (here).

STREAM audio only on Apple Podcasts (here), Spotify (here), or your favorite podcast player app.

DOWNLOAD a pdf of a moderately edited transcript and the slide deck using the blue Download buttons below.

As we teased in last week’s video, we want to expand on the evolution of our Super Vol commodity macro framework to explicitly rebrand it Geopolitical Super Vol. Since Russia-Ukraine, we have resisted the super-cycle framing that we think implies a smoothness to an upcycle like seen during the 2000s China-BRICs expansion period. The current environment is more like the 1970s—arguably a super-cycle, but one with a lot more choppiness and stress along the way. The current decade is shaping up to be a modern version of that era, with some important differences.

Although we are calling it Geopolitical Super Vol, we want to be clear on a few conclusions:

* We believe structural profitability and opportunities for growth are significant for a broad range of companies involved in traditional energy, new energy technology, the power value chain, and a host of raw materials.

* We believe the corresponding S&P 500 weighting for these sectors will increase meaningfully in the decade ahead.

* It is the inevitable sharp economic downturns along the way that motivates us sticking with and evolving the Super Vol language. You can’t demand that which does not exist—and that means sharp commodity spikes will be met with similarly sharp pullbacks during this era.

0:00 Introduction

2:41 A Break from The 1980-2020 World View

6:22 Implications for Energy Sector

10:48 Investing in Energy, Power, and Materials

14:44 Obliterating Pre-Iran Views

16:36 Obliterating Pre-Pre-Iran Views

18:53 Be Wary of Perma Bulls and Perma Bears

20:36 Be Wary of Net Zero Rebranded

21:58 Energy’s Natural Hierarch of Needs Remains Our North Star

22:39 FAQ #1: How do we think about global recession risk?

24:38 FAQ #2: What are lessons learned from the Asia Financial Crisis of 1997-9?

27:15 FAQ #3: What does the traditional energy profitability cycle look like in Geopolitical Super Vol?

28:51-32:10 On A Personal Note: Feedback vs Pushback

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📜 Credits

* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.

⚖️Disclaimer

I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

WATCH the video on Substack by clicking the play button above or on YouTube (here).

STREAM audio only on Apple Podcasts (here), Spotify (here), or your favorite podcast player app.

DOWNLOAD a pdf of a lightly edited transcript using the blue Download button below. There is no power point slide deck this week.

For the past month we have been recording these videos several days in advance of publication and repeating the line that we hope peace will have been declared and the Strait reopened by the time of Saturday publication. Today the message is different. We are recording this late morning New York time on Thursday, April 9. A fragile ceasefire is sort of still in place and there is optimism that shipping volumes in and out of the Strait of Hormuz is on track to revert to something much higher than where we’ve been. It will of course take some time to get back to fully normal pre-War flows.

We were originally planning a longer discussion with a power point on evolving our Super Vol theme to more explicitly call it Geopolitical Super Vol, and we will touch upon that in this video podcast. But given the dramatic ceasefire news and major equity and commodity market moves, we will instead address nine questions and takeaways that we see from this crisis.

0:00 Introduction

1:30 Q1: What is your most important takeaway following the ceasefire?

2:50 Q2: In the short-term, will oil prices revert to pre-War levels?

6:02 Q3: What about oil prices over the medium-to-longer-term?

10:18 Q4: How was such a sizable shock not even worse in terms of impacts?

13:07 Q5: What is your take away for US consumers?

15:26 Q6: Where could we be better?

18:39 Q7: What about Canada?

20:30 Q8: Why are we sticking with Super Vol as our price framework?

23:04 Q9: So where do you come out on investment in both traditional and new energies?

24:54 On A Personal Note

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📜 Credits

* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.

⚖️Disclaimer

I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

WATCH the video on Substack by clicking the play button above or on YouTube (here).

STREAM audio only on Apple Podcasts (here), Spotify (here), or your favorite podcast player app.

DOWNLOAD a pdf of a lightly edited transcript using the blue Download button below. There is no power point slide deck this week.

We spent the past week in Houston at the always great CERAWeek conference hosted by S&P Global. On behalf of all my colleagues at Veriten, a big thank you to Dan Yergin and the entire S&P Global team for putting on a great event.

CERAWeek 2026 came amidst what is now week four of the War in Iran and the continued de facto closure of the Strait of Hormuz. We are recording this late on Wednesday, March 25 and as always hope that by the time this is released on Saturday morning, the Strait will have reopened to normal flows and the war ended. Its ongoing closure is simply untenable for the global economy. It is ultimately not good for energy companies, which is our focus area, even if current oil and gas pricing is elevated. A quick end to the war and the reopening of the Strait is the best-case scenario for energy companies everywhere.

This week we’ll provide some takeaways from CERAWeek 2026. We will bucket our takeaways in 3 key themes: (1) Macro outlook and scenarios; (2) The day after the war ends, what comes next for energy companies? (3) What unexpected changes will come from this crisis?

Our current plan is to not publish Super-Spiked over Easter/Passover weekend. We hope everyone is able to take some time off.

Subscribe to Super-Spiked to receive all content. Also available at https://veriten.com.

📜 Credits

* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.

⚖️Disclaimer

I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

WATCH the video on Substack by clicking the play button above or on YouTube (here).

STREAM audio only on Apple Podcasts (here), Spotify (here), or your favorite podcast player app.

DOWNLOAD a pdf of a lightly edited transcript and the slide deck using the blue Download buttons below.

We recorded this video podcast on Wednesday, March 18. This week we address five questions that have arisen regarding our views on the potential long-term impacts of the war in Iran.

* Does our Super-Spike oil demand destruction framework need adjusting for an abrupt geopolitical spike?

* What advance warning signs are we watching to assess economic damage and risks to capital markets?

* How does Iran impact our view of the traditional energy profitability cycle and terminal value recognition?

* Does the war change which regions we prefer for future CAPEX?

* How does Iran impact our Power Surge (power super-cycle) view?

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SLIDE 3: Super-Spike Framework In A Geopolitical Event?

Key points:

* Our March 2005 “Super-Spike” framework was used to assess how high oil prices could reach in order to slow oil demand growth to levels of available supply in an environment of structurally strong global GDP growth (BRICs expansion).

* We chose “super” to indicate the oil upcycle was multi-year in nature. We chose “spike” to remind ourselves and our clients that inevitably oil would surely rollover as cycle dynamics ensured a future period of oversupply (or under-demand).

* At the end of the day, the super-cycle is always one of sector profitability, with oil prices just one (important) component along with costs and capital intensity.

Current environment:

* The War in Iran and closure of the Strait of Hormuz is not analogous to that 2004-2014 period. This is an acute geopolitical disruption.

* Therefore, the framework we used over 2004-2014 has its limitations. Most notably, the sudden, dramatic jump in oil prices could mean that absolute levels do not need to reach the heights implied in the table on the right.

* It also suggests that “Super Vol” remains the better framing for energy commodity markets, including crude oil, oil products, and global spot LNG prices.

* Be wary of perma bears and perma bulls! For the bears: cycles have to play out. For bulls: it is always a cycle.

Exhibit 1: “Super-Spike” oil demand destruction framework

Source: Bloomberg, EIA, Federal Reserve, Veriten.

SLIDE 4: What Advance Warning Signs Are We Watching?

* Bull to bear can happen quickly and unexpectedly…July to December 2008 saw WTI drop from over $140/bbl to under $40/bbl.

* How can one differentiate between the July 2007 collapse of two Bear Stearns credit funds and the March 2023 issues with Silicon Valley Bank?

* So why worry this time? The closure of the Strait of Hormuz is simply intolerable if measured in months rather than weeks. The Age of Drones is a game changer, as we see in Russia-Ukraine.

* Fortress balance sheet, understanding controls and contracts, and aiming to not only survive but thrive during turmoil is the goal.

SLIDE 5: How Does Iran Impact The Profitability Cycle

Key points:

* It remains our view that traditional energy is firmly within a new profitability super-cycle that began in 2021 and would be expected to last 10+ years.

* Structural profitability cycles are inherently long-term in nature, 10-15 years up, 10-15 years down. The prior downcycle ran from a 2010 peak to a 2020 trough.

* Within the structural up or down cycles, numerous mini-cycles occur along the way. We believe 2025 marked a “normal” trough following a 2.5 years mini-downcycle.

* We rejected “oil glut” arguments that have prevailed since Liberation Day (April 2025). We agree that the closure of the Strait of Hormuz renders impossible a true accounting of who was right—oil glutters or us.

Current environment:

* We have been surprised by the fact that capital discipline at the sector level has remained intact.

* A true, multi-year upcycle would undoubtedly test discipline. But let’s judge it as we go: so far, so good.

* The main risk to seeing a “deep trough” (as opposed to normal) would be an extended closure of the Strait and a collapse in the global economy. We take this risk seriously.

* The best case scenario for the profitability cycle would be a quick re-opening that ensured limited adverse global GDP impacts.

Exhibit 2: Traditional energy sector profitability

Source: Bloomberg, FactSet, Veriten

SLIDE 6: Does The War Change Regional CAPEX Preferences?

* There are no absolutes…it is all opportunity specific.

* Oil exploration: Algeria vs UK North Sea circa 1991-1994.

* Natural gas import infrastructure: New York state (Appalachia) versus Germany (Russia).

* Many areas of the Middle East will attract capital irrespective of how this plays out.

* Between COVID, Russia-Ukraine, and now Strait of Hormuz, supply chain security will remain ascendent as an issue. Positive for NAM, power, energy source diversification (new and old tech).

SLIDE 7: What Impact Is There On Our Power Surge View?

* If a general financial/credit crisis materializes, this is a sector that commonly uses leverage and is now in growth mode.

* There will be winners and there will be losers.

* Execution: Understanding contracts, supply chains, and liquidity are all critical.

* At the end of the day, Power Surge we think persists beyond and through this war due to the need to grow power generation to address aging western world grids, industrial reshoring, electrification, and AI & digital transformation.

⚡️On A Personal Note: Super-Spike Reactions

For On A Personal Note, we refer you to the video where Arjun further reflects on his March 30, 2005 “Super-Spike period may be upon us” report.

📜 Credits

* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.

⚖️Disclaimer

I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

For Super-Spiked subscribers that prefer that written posts, we have included a lightly edited transcript of the video (blue download button below) along with a downloadable copy of the slide deck.

WATCH the video on Substack by clicking the play button above or on YouTube (here).

STREAM audio only on Apple Podcasts (here), Spotify (here), or your favorite podcast player app.

DOWNLOAD a pdf of a lightly edited transcript and the slide deck using the blue Download buttons below.

We recorded this video podcast on Wednesday, March 11. As we think everyone by now realizes, the Strait Hormuz is a critical bottleneck to not only crude oil exports from the region but also LNG from Qatar. We have no idea how long the current war will last. The longer it goes, the greater the risk of a painful energy crisis materializing. We do not think that fact is lost on anyone that is participating in or observing the conflict.

In this kind of very acute situation, an energy crisis would be bad for everyone be it citizens, governments, and even traditional energy companies over the long run as whatever benefit accrues from short term price appreciation would likely be lost from future economic weakness. No reasonable person in and around the energy sector is rooting for war. Even if shipping were to resume in coming days or weeks out of the Straight, we suspect the realization of what has long been considered a “worse case” geopolitical risk for oil markets—and now LNG—will motivate countries to pursue changes that mitigate this risk of future disruptions.

This week we have two key messages: (1) we revisit our “Super-Spike” oil demand destruction framework we first rolled out in March 2005 at Goldman Sachs. It was a career call for us. The basic points of our analysis we think stand the test of time. (2) we discuss various diversification opportunities that we think countries will or should take to reduce the risk of future disruptions long after this current crisis has hopefully abated.

Subscribe to Super-Spiked to receive all content via email. Also available on https://veriten.com.

SLIDE 1: Cover Slide

SLIDE 2: Strait of Hormuz: Long-Term Impacts On Oil, LNG

* How will it be secured in an age of drones?

* Inverse COVID: Refreshing our oil demand destruction framework.

* Baseload energy diversification opportunities:

* US Natural Gas: Lots of growth, where to invest?

* Coal: A base-load domestic fuel, why not an EU comeback?

* Nuclear: Back in vogue, but how long to grow again in US/EU?

* Considerations: (1) What’s real, what’s hype? (2) Where in value chain to invest? (3) Who do you trust to allocate capital?

SLIDE 3: Revisiting Our Oil “Super-Spike” Framework

Key points:

* We used the US since it has sizeable demand and freely floating retail gasoline prices.

* Wider economy structurally outperforms gasoline.

* But that means a much higher nominal price is required to destroy demand versus a prior cycle.

* Gasoline demand is highly inelastic.

* Both absolute price and rate of change are relevant.

How to read the table/graph:

* The graph shows historic gasoline spending (demand x retail price) relative to personal consumer expenditures.

* Retail gasoline price equals the crude oil price + refining margin (to turn crude oil into gasoline) + gasoline taxes + “all other” (retail margin + other costs).

* The table holds retail margin plus all other as constant and shows sensitivities to varying levels of gasoline spending as a % of PCE and refining margins.

Exhibit 1: “Super-Spike” oil demand destruction framework

Source: Bloomberg, EIA, Veriten.

SLIDE 4: US Natural Gas: Lots of Growth, Where to Invest?

US natural gas markets have doubled over past 20 years and are on-track to grow substantially over next decade. US natural gas resource is plentiful; infrastructure-enabled access to higher-valued end markets is critical.

Exhibit 2: Global demand for US natural gas

Source: EIA, Veriten.

Exhibit 3: Gas value chain CROCI

Source: FactSet, Veriten

SLIDE 5: Coal: A Baseload Domestic Fuel, EU Comeback?

Growth in coal in China has swamped the reduction in EU and US coal use. We see no reason the EU & US could not, at a minimum, reverse the declines seen over the last 25 years. It’s a drop in the bucket! Moving factories from the EU & US to China is net negative for carbon emissions, geopolitical security, and labor markets in the EU and US.

Exhibit 4: Size of global power markets

Source: Energy Institute, Veriten

Exhibit 5: Growth in coal consumption

Source: Energy Institute, Veriten

SLIDE 6: Nuclear: Back In Vogue, But How Long To Grow?

Nuclear is again recognized as an important baseload fuel that can favorably add to system diversification. China is growing rapidly versus stagnation in the US and decline in EU. What opportunities exist to improve execution in the developed world? What is the viability (vs hype) of advanced technologies to boost growth?

Exhibit 6: Nuclear generation by country/region

Source: Energy Institute, Veriten.

⚡️On A Personal Note: 21 Years Later…

📜 Credits

* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.

⚖️Disclaimer

I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

For Super-Spiked subscribers that prefer that written posts, we have included a lightly edited transcript of the video (blue download button below) along with a downloadable copy of the slide deck.

WATCH the video on Substack by clicking the play button above or on YouTube (here).

STREAM audio only on Apple Podcasts (here), Spotify (here), or your favorite podcast player app.

DOWNLOAD a pdf of a lightly edited transcript using the blue Download buttons below.

We are coming to you from Houston following my participation earlier this week at the Aspen Institute’s Winter Energy Forum. This week we provide thoughts on Iran and the latest Middle East conflict. As usual, our focus is on what the long-term implications could be for companies and investors. Our ten initial long-term takeaways are as follows:

1 - Super Vol remains our commodity macro mantra.

2 - Middle East turmoil now as relevant to LNG (liquefied natural gas) as crude oil.

3 - Overhyped oil glut call.

4 - Energy source/technology diversification is a must for countries.

5 - Renewables and other new energies will continue to gain traction.

6 - The case for coal.

7- The case for Canada.

8 – Use unexpected free cash flow to reinforce fortress balance sheets.

9 - Undisruptable oil, gas, coal, copper, and critical minerals.

10 - Commerce over chaos and a brighter future for the Middle East.

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📜 Credits

* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.

⚖️Disclaimer

I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com