Brian Sullivan: Why the 'real' price of oil is likely $30-$40 higher than where it is now

Key Points:

• The true cost of a barrel of oil is estimated to be $125 or higher due to soaring physical delivery costs, such as supertanker charters that have increased tenfold compared to last year, adding about $38 per barrel over the oil price itself.
• Despite oil futures prices shown on screens, companies requiring oil transportation by sea, rail, or truck face significant premiums, indicating rising overall costs even as oil volumes near pre-war levels in key routes like the Strait of Hormuz.
• Shell (SHEL) is highlighted as a top energy stock, benefiting from its large liquefied natural gas (LNG) business and strong export margins, with analysts from RBC and others bullish on its prospects alongside peers like TotalEnergies and BP.
• Morgan Stanley forecasts continued strong earnings for refiners such as ExxonMobil, Valero, Phillips 66, and PBF amid ongoing diesel and gasoline shortages, marking a "golden age" for refining companies.
• In the power sector, Truist upgrades First Solar (FSLR) to Buy due to favorable tariffs boosting pricing power, while TD Cowen initiates coverage of TeraWulf (WULF) with a Buy rating, citing attractive valuation and potential catalysts for growth.