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Geopolitics

  • Global Energy Advisory – 29th May 2015

    Politics, Geopolitics & ConflictAs we predicted, trouble has flooded across Saudi Arabia’s eastern border with Yemen. On 22 May, a suicide bomber blew himself up at a Shi’ite mosque here, with several killed and scores wounded. This was in the village of al-Qadeeh. The battle between Saudi forces and Yemen’s Houthi forces has significantly intensified since the Saudis launched their bombing campaign eight weeks ago, and we’re looking a lot of carnage here, with no visible results for either side. The main border crossing has been destroyed. If it goes too much farther, this proxy war between Iran and Saudi…

  • Global Energy Advisory – 22nd May 2015

    Politics, Geopolitics & Conflict South Sudan South Sudanese rebels claim to have captured a key refinery for the country’s largest oilfield (Paloch) in the Upper Nile State. The rebel MO here is to target oil facilities in order to deprive the government of oil revenues—upon which the budget is entirely dependent and which represents its only way of financing the fight against the rebels in this civil war. The two-year civil war pits forces loyal to South Sudan President Salva Kiir against ‘rebels’ allied with Kiir’s former deputy, Riek Machar. South Sudan only achieved independence from Sudan in 2011. While…

  • Global Energy Advisory – 15th May 2015

    Geopolitics & OilLet the games begin in Cuba …As the US and Cuba work to restore diplomatic relations, keeping in mind that we are doubtful the US trade embargo on Cuba will be lifted until after the 2016 presidential elections, Cuba is flaunting what it says are billions of barrels of oil in its offshore Gulf of Mexico territory. So far, there isn’t a great amount of excitement over Cuba’s announcement. In 2012, three exploration wells came up dry and, at present, most are eyeing new opportunities in Mexico since it opened up its oil and gas to foreign companies…

  • Global Energy Advisory – 8th May 2015

    Africa/Middle East Oil & Gas UpdateKurdistanThe Kurdistan Regional Government (KRG) in northern Iraq is upping the ante with Baghdad over the long-running oil question. Now Erbil is suggesting that it is prepared to discuss a new oil deal with the Iraqi central government in which Baghdad would actually buy Kurdish oil. This new innovation is the latest in the ongoing dispute between Erbil and Baghdad over the former’s unilateral exports of oil that Baghdad believes belongs to the central government and for which it previously cut Kurdistan’s share of the country’s national budget. In December, the two sides signed an…

  • Global Energy Advisory – 1st May 2015

    GeopoliticsRussian Oil and Gas: The Squeeze Is On—Sort ofEuropean Union regulators have formally charged Gazprom with abusing its dominant market position in Europe—a charge a long time (2.5 years) in the making and a move that will likely increase tensions with Russia. According to the European Commission, Gazprom has significantly hindered competition in Central and Eastern European gas markets, and has infringed on European single-market rules by forbidding the resale of its gas between EU countries, allowing it to charge unfair prices. Furthermore, Gazprom may also have abused its dominant market position by making the supply of natural gas dependent…

  • Global Energy Advisory – 17th April 2015

    The Geopolitics of Oil The Iran-Pakistan Pipeline The Iran-Pakistan pipeline, which has been languishing on the Pakistani side, looks set to get a boost from China, which has apparently agreed to take on the $2 billion Pakistani pipeline segment. If this deal goes through, the Pakistani segment of the pipeline, which is 485 miles, would be funded largely by a Chinese loan and construction would be undertaken by China’s CNPC. Iran has already completed its 560-mile segment of the pipeline. Pakistanis say the deal with China is expected to be signed during a presidential visit to Islamabad this month. That…

  • Russia Using Iran Nuclear Deal To Expand Sphere Of Influence

    The nuclear deal between Iran and the P5+1 nations could lead to a flood of new oil hitting global markets. That could result in a significant drop in oil prices. While that would be damaging to Russia – already reeling from low prices – the Kremlin apparently believes an expanding presence in the Middle East outweighs the potential crude price collapse. The Energy Information Administration projects that a successful conclusion of negotiations in June that would result in a removal of sanctions on Iran could lead to a $5 to $15 per barrel price decline for oil in 2016. That…

  • Global Energy Advisory – 10th April 2015

      Geopolitical Update There is no need at this point for investors to fear a rapprochement with Iran in terms of what it might do to oil prices by adding more supply to the over-supply mix. As you likely are aware by now, a framework agreement was reached last week between Iran and world powers. There’s still a fair amount of road to travel to see sanctions lifted, though Iran wants them lifted immediately upon the implementation of a final deal. Even in that best-case scenario for Iran, it would take some time for the country to rally and ramp…

  • Global Energy Advisory – 2nd April 2015

    Kurdistan Oil Update • Gazprom Neft Middle East is preparing to conduct a 2D seismic survey on the southeastern section of the Halabja block. The seismic equipment is en route from another section of the block, where seismic has already been conducted. The first exploration well here will be drilled within a year, with vague references to 2015/2016. This is one of four Gazprom Neft projects in Iraq; and one of three in the Kurdistan Region of Iraq. • Gulf Keystone Petroleum Ltd, which operates the Shaikan field in Kurdistan, has resumed production and truck loading operations at its two…

  • How Should Commodity Traders Now Think About Geopolitical Risk?

    In 2009 political scientists Ian Bremmer and Preston Keat defined geopolitics as “the study of how geography, politics, strategy, and history combine to generate the rise and fall of great powers and wars among states.” Given its importance to the running of the modern global economy, nowhere is this more vividly observed than in the battle for energy resources and in particular oil. A cursory look at a simple oil price chart reveals a series of bumps. Each of these can be pinpointed to wars and conflicts, whether it was the Iranian revolution or the first and second Gulf wars.…