Energy Security Under Fire: Drones, Sanctions, and the New Oil Wars

Kirk Edwards, President of Latigo Petroleum, stops by the Energy News Beat Podcast

In this episode of the Energy News Beat Podcast, host Stu Turley sits down with Kirk Edwards, President of Latigo Petroleum, to discuss the critical energy challenges reshaping global markets. From diesel shortages and geopolitical tensions to drone warfare targeting refineries, the conversation reveals how interconnected energy security has become.

Edwards and Turley explore why proposed diesel export bans would backfire, how the Ukraine war is crippling global refining capacity, and why U.S. energy policy decisions could have catastrophic consequences for the economy. With oil prices hovering around $100 per barrel and refinery utilization at dangerous levels worldwide, this episode cuts through the noise to explain what’s really driving energy markets—and why North American energy cooperation is more critical than ever.

We highly recommend connecting with Kirk on LinkedIn, as he is a great writer and resource. https://www.linkedin.com/in/kirk-edwards-99757412a/

Watch this video on YouTube.

1. Diesel Market Crisis & Export Bans

The conversation opens with the critical issue of diesel prices and the political debate around banning diesel exports. Kirk explains that a diesel export ban would be counterproductive—refiners would simply reduce capacity rather than store excess inventory, which would increase prices for all refined products (gasoline, jet fuel, asphalt, kerosene).

2. Global Diesel Shortage & Geopolitical Impact

The war in Ukraine has devastated Russia’s refining capacity, creating a massive global diesel shortage. Russia, historically a major diesel exporter, now has export bans. The U.S. exports approximately 1.5 million barrels per day of diesel, representing about 20% of the world’s supply—making U.S. diesel critical to global energy security.

3. California’s Energy Crisis

California’s strict regulations have driven refineries to close or relocate to Texas and the Gulf Coast. This has left California dependent on imports (50-60% of diesel from Asia), resulting in diesel prices reaching $9-10 per gallon compared to $6 in Texas—a self-inflicted wound through poor policy.

4. Iranian Oil Seizures & Sanctions

Three Iranian tankers carrying 6 million barrels of oil have been seized and are headed to the U.S. This represents approximately $600 million in assets and demonstrates the effectiveness of sanctions in crippling Iran’s economy and ability to fund military operations.

Full Story on the seizures: Iran-Linked Oil Tankers Seized by US Navy Now Headed to U.S. Coast.

This is a huge story as 6 million barrels are approaching the U.S. coast, and yes, the tankers are from the “Dark Fleet,” so they are available to be put into service under the Jones Act regulations and maritime law.

5. Ukraine-Russia Warfare & Drone Attacks

The conversation highlights how drone warfare is reshaping global energy security. Ukraine’s drone attacks on Russian refineries (150 drones got through out of 600 sent) are significantly impacting global oil production. The Novorossiysk refinery was hit, taking 110,000 barrels per day offline.

This is a huge story today with another refinery hit in Russia.

6. Saudi Arabia’s Red Sea Challenges

Houthi attacks on Saudi Arabia’s East-West Pipeline have forced a “shuttle diplomacy” approach—using smaller tankers to move oil through the Red Sea and Suez Canal instead of the damaged pipeline. This reduces throughput from 4-6 million barrels per day to 3-5 million.

7. Global LNG & Natural Gas Disparities

Natural gas prices vary dramatically by region—$2-3 per MCF in Texas versus $30 per MCF in Europe. Qatar’s LNG infrastructure has been damaged, and the global LNG shortage will worsen during winter as storage levels are depleted.

8. U.S. Tanker Fleet Vulnerability

The U.S. has less than 0.01% of the world’s commercial shipping fleet. This creates a critical vulnerability—if other nations sanction U.S. tankers, America has no fleet to maintain energy exports or security.

9. Strategic Petroleum Reserve (SPR) & Global Oil Reserves

Approximately 3 billion barrels of oil have been displaced since the Ukraine war began. China strategically holds 2 billion barrels in reserves, which has helped stabilize global prices. The U.S. and other nations will need to replenish depleted reserves, supporting higher oil prices.

10. Canada-U.S. Energy Interdependence

The U.S. imports 4 million barrels per day from Canada—critical sour crude needed for refinery operations. Tensions over tariffs threaten this relationship, but disrupting Canadian oil would devastate the U.S. economy and Midwest refineries. The conversation criticizes Canadian leadership for potentially aligning with the EU and China rather than supporting North American energy security.

11. Optimal Oil Pricing for Energy Security

Kirk argues that $75 per barrel is the “sweet spot” for maintaining U.S. drilling activity and energy security, while $60 is too low and $100+ is unsustainable. Goldman Sachs previously predicted $200 oil if the Bab el-Mandeb Strait was blocked, but refineries are now the actual bottleneck.

12. Permian Basin & Oklahoma Boom

The Permian Basin remains the heartbeat of U.S. energy production, with disciplined operators focusing on completing uncompleted wells (”ducks”) rather than drilling new ones. Oklahoma is experiencing a boom similar to the Permian’s early days, with new formations and shale plays emerging.

A shout-out to Kirk for his great leadership and friendship with Steve Reese, as we are looking forward to Steve returning to the podcast chair soon.

We are covered in interviews and articles, and trying to get the critical stories out there. We have Capital Mischief ‘s Charlie Garcia on deck on October 8th with Doomberg , and Rey Trevino, with Dr. Beatriz Canamary, The Electric Grandma Meredith Angwin, and about 9 other shows lining up going through production.

Get ready for a busy week, and we have some new gear from Jackery that we’re going to push through its paces and get you updates. Please take an inventory of your emergency supplies, power, and water, and get ready for storms or man-made emergencies.

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A shout-out to Steve Reese and the Reese Energy Consulting group for sponsoring the Podcast https://reeseenergyconsulting.com/.

Data2 if you have any business systems, can you trust A? Well, they have the patent on validation. . https://data2.zoholandingpage.com/energy

And we have WellDatabase rolling, and we use their tools for the Energy News Beat weekly Rig Reports: https://welldatabase.com/

Also entering Sponsor Rey Trevino, Pecos Operating

https://pecos.energy/

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