OIL Headed Back to $100+, 'Every Area' of Energy Set to Soar: Josef Schachter

Commodity Culture Interview with Joseph Shakar - February 20, 2026: A Detailed Summary

Key Concepts:

• Days of Supply: A metric for oil inventory levels, impacting price sensitivity.
• Demand Growth (OECD vs. Non-OECD): The shift in oil demand drivers from developed to developing nations.
• Strategic Petroleum Reserve (SPR): Government-controlled oil reserves used for emergency supply.
• Shadow Fleets: Vessels used to circumvent sanctions and transport oil (Iran, Russia, Venezuela).
• SAGD (Steam Assisted Gravity Drainage): A method for extracting heavy oil, particularly relevant to Canadian oil sands.
• TMX (Trans Mountain Expansion): A pipeline project aimed at increasing Canadian oil export capacity to the West Coast.
• OPEC+ Production Capacity: The ability of OPEC nations to increase oil production.
• WTI (West Texas Intermediate): A benchmark crude oil price.
• IRGC (Islamic Revolutionary Guard Corps): A powerful military organization in Iran.

I. Current State of the Energy Sector & Demand Dynamics

The energy sector has been largely overlooked by mainstream financial media due to narratives surrounding peak oil demand and the rise of electric vehicles (EVs). Joseph Shakar argues this presents a contrarian opportunity. Current global oil supply stands at approximately 90 days, considered normal for a growing economy (1-2% growth). Historically, tighter supply (79 days in 2008) led to significant price increases ($90 to $147). While demand growth in OECD countries is slowing due to EVs and environmental regulations, substantial growth is expected in the developing world (“Third World”). This demand will fuel the need for resources like copper, lithium, zinc, and nickel, requiring significant investment and a return on capital for producing nations. A key point is that two billion people globally lack basic necessities like running water and electricity, driving increased energy demand as living standards improve. Shakar draws parallels to Japan’s post-war industrialization (1970s) and China’s rapid growth (1999-2008) as historical precedents for increased energy consumption linked to economic development. He anticipates 10-15 million barrels per day of increased demand from the developing world over the next decade, necessitating sustained oil prices in the $80-$90 range.

II. Supply-Side Factors & Inventory Analysis

Current oil prices are around $64-$65, with a “war premium” potentially inflating the price. Shakar believes prices may temporarily decline without geopolitical escalation, but anticipates a Q2 realization that OPEC nations lack substantial spare production capacity. He highlights the US taking over Venezuela’s “shadow fleet” for oil transport, leaving Iran and Russia as the primary operators of such fleets. The US Energy Information Administration (EIA) weekly petroleum status report shows US inventories at the lower end of the five-year band, indicating strong domestic demand and export capacity (24 million barrels produced vs. 22 million consumed). Canada is also self-sufficient, exporting approximately 3.5-4 million barrels per day. Shakar emphasizes the need for Canada to secure additional export infrastructure, particularly to the West Coast, to avoid displacement by increased Venezuelan production. Potential solutions include TMX expansion, a pipeline to Alaska, or utilizing the Great Lakes.

III. Canadian Energy Sector & Infrastructure Challenges

Alberta Premier Danielle Smith advocates for a 1 million barrel per day pipeline to the West Coast to mitigate the risk of Canadian heavy oil being displaced by Venezuelan crude entering the US Gulf Coast. Shakar notes that Canada’s export industries are dominated by natural resources (energy and precious metals), exceeding the contribution of manufacturing sectors like automotive. The recent Supreme Court ruling on Trump’s tariffs is mentioned, with the outcome’s impact on energy remaining uncertain. The new Canadian government is perceived as more supportive of natural resource development.

IV. Geopolitical Risks: Iran & Potential Military Action

Shakar assesses a high probability of military action against Iran, citing four key US concerns: nuclear weapons development, ballistic missile capabilities (including long-range potential with North Korean and Russian assistance), support for terrorism (e.g., Houthis in Yemen), and the Iranian government’s suppression of internal protests. He suggests a potential US military strategy involving neutralizing Iranian air defenses, degrading the Islamic Revolutionary Guard Corps (IRGC), and targeting naval assets. He anticipates a multi-week operation with a focus on minimizing casualties. Shakar believes military action could destabilize the current Iranian regime, potentially leading to a shift in power and a more favorable outcome for the Iranian people.

V. Impact of Geopolitical Events on Oil Prices & Venezuelan Production

While geopolitical shocks often cause short-term oil price spikes, Shakar suggests this time could be different. He contrasts the response to the Russia-Ukraine invasion (initial price spike to $120 followed by a decline) with the potential impact of action against Iran. He emphasizes that sanctions against Russia proved ineffective, with China becoming a major buyer. Regarding Venezuela, Shakar believes increased production is possible, despite skepticism from some analysts. He points to the US easing sanctions and allowing companies like Chevron, Schlumberger, Halliburton, and Baker Hughes to return, potentially boosting production by 1-1.5 million barrels per day by late 2026, and potentially up to 1.8-2 million by 2027. He draws a parallel to Kuwait’s rapid recovery after the Gulf War, highlighting the oil industry’s ability to quickly restore production with the right conditions (rule of law, investment security). However, he cautions that increased Venezuelan production will likely be absorbed by global demand growth, preventing a significant price decline.

VI. Investment Strategy & Key Opportunities

Shakar categorizes investors into three groups: conservative (dividend income & capital gains), growth (production growth & stock price appreciation), and entrepreneurial (high-risk, high-reward exploration). He notes that energy stocks are currently trading at depressed cash flow multiples (2-3x) compared to historical peaks (8-10x in 2008). He recommends investors review company presentations, listen to quarterly webcasts, and pay attention to analyst questions to gain deeper insights. He identifies natural gas and LNG-focused companies as particularly attractive, citing Canada’s potential to increase LNG exports to 6 billion cubic feet per day by the end of the decade. He emphasizes the importance of insider ownership, strong balance sheets, and a long-term investment horizon. He predicts oil prices could exceed $147 per barrel (the 2008 peak) before the end of the current cycle.

VII. Notable Quotes:

• “The demand that they're going to have for energy, be it natural gas, be it coal, be it oil, is going to rise.” – Joseph Shakar, on the growing energy needs of the developing world.
• “If you want to pull any stock that you own today or that you're thinking about, pull out the charts from 1999 to 2008. You'll see a lot of 10-baggers.” – Joseph Shakar, advocating for historical analysis in investment decisions.
• “We are just like the torque and the parabolic move you've seen in the other commodities. We're waiting for ours.” – Joseph Shakar, expressing bullishness on the energy sector.

VIII. Actionable Insights & Resources:

• Shaker Energy Report: A subscription service offering in-depth analysis of the energy sector (discount code POD100 for $100 off).
• EIA Weekly Petroleum Status Report: A valuable source of US oil inventory data.
• Federal Reserve of Dallas Energy Charts: Provides data on breakeven oil prices for different US basins.
• Company Webcasts & Presentations: Direct access to information from energy companies.

Conclusion:

Joseph Shakar presents a compelling bullish case for the energy sector, driven by growing demand in the developing world, constrained supply, and potential geopolitical catalysts. He emphasizes the importance of understanding both macro trends and company-specific fundamentals, advocating for a diversified investment approach tailored to individual risk tolerance. He believes the current market undervalues energy assets and presents a significant opportunity for investors willing to take a long-term perspective.