Scarcity, Sovereignty and Security – Can Energy’s Strategic Imperatives Align?

Companies Mentioned: Agilyx, Air Products, Aramco, Bloom Energy, Chevron, Dow, Equinor, ExxonMobil, Green Dot, Ineos, Issaquena Green Power, Kumho Mitsui, Lazard, Methanex, Orlen, PureCycle, Saltwerx, SQM, Standard Lithium, Westlake, X-Energy, Yulong Petrochemical
Commodities Mentioned: Aluminum, Ammonia, Batteries, Beef, Biofuel, Chlor-Alkali, Copper, Crude Oil, Ethane, Ethanol, HDPE, Hydrogen, LNG, LPG, Lithium, Natural Gas, Naphtha, NGL, PET, Polystyrene, Solar, Steel, Wind

Key Findings

General Thoughts: Despite anticipated post-conflict oil and gas price easing, steepening global feedstock cost curves enhance US petrochemical export potential, while high-cost Asia and Europe face margin compression.
Supply Chain/Commodities: Big Oil’s Smackover plays and direct-lithium extraction (DLE) expansions position to capture resource premium margins, undercutting higher-cost rivals and reshaping critical-minerals supply chains.
Energy/Upstream: The IEA estimates that petrochemical feedstocks will rise from 15.8% to 17.4% of global oil consumption by 2030, reflecting their importance as a driver of oil demand and in energy sector strategic reviews.
Sustainability/Energy Transition: Low headline $/MWh masks the low effective load-carrying capability of and grid upgrade burden of renewables, compelling a mix of intermittent and firm-power sources for resilient supply.
Downstream/Other Chemicals: The pending July 9 tariff cliff threatens 50% duties, driving EU exporters to front-load shipments to the US. The ifo Institute expects Germany’s GDP growth to show modest gains through 2025.

We will not publish a report on Thursday, June 19, as it falls on the Juneteenth holiday in the United States.

Exhibit 1: Global chemical feedstock movement implies a steepening cost curve, a plus for North American chemicals.