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Geopolitics

  • Global Energy Advisory – 28th August 2015

    Politics, Geopolitics & Conflict The Iraq Update The Kurds are once again going it on their own, selling oil unilaterally, bypassing the Iraqi central government of Baghdad, which cannot meet the financial commitments laid out in a deal that had temporarily resolved the oil dispute. Now, supermajor oil traders such as Vitol and Trafigura are locking in billions of dollars in Kurdish crude oil and shipments of this oil are becoming increasingly regular. Israel has been getting more than one-third of the Iraqi Kurds’ crude exports between May and August. From the Israeli side, this means it has been meeting…

  • Global Energy Advisory – 21st August 2015

    Politics, Geopolitics & Conflict • Following the Iran sanctions game, as it progresses swiftly, Switzerland has now become the first Western nation to put an end to Iran sanctions in the aftermath of the 14 July nuclear deal. What this means is that there will no longer be a requirement to report trade in Iranian petrochemical products. It also means that the ban on precious metals transactions with Iranian state companies has been lifted. Furthermore, there will be no obligation to report the transport of Iranian crude oil and regulations on insurance and reinsurance policies related to such transactions. This…

  • Global Energy Advisory – 14th August 2015

    Geopolitics, Politics & Conflict • Turkmenistan’s state-owned TurkmenGaz will lead a consortium of state-owned companies that have proposed to build, own, and operate the 1,800-kilometer Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline. The consortium’s Steering Committee has selected TurkmenGaz to build, finance, own and operate the planned natural gas pipeline. The earlier plan was to look for an international company to fill this role. The pipeline will have a capacity of 90 MMscfd, or 33 billion cubic meters of Turkmen natural gas per year. Construction is expected to begin in December and take around three years. The planned pipeline will extend from…

  • Global Energy Advisory – 7th August 2015

    GeopoliticsGood news this week for oil producers in Iraqi Kurdistan, with a promise by the Kurdish authorities to start monthly payments in September. It has been a rough road not just for key Kurdistan producers such as Genel, Gulf Keystone and DNO, but also for the Kurdistan Regional Government (KRG), which has not only had to deal with the Iraqi Central government’s withholding of the Kurds’ portion of the national budget but also with funding its Peshmerga fighters to push back the Islamic State in northern Iraq. This has left the KRG in arrears to major producers to the tune…

  • Global Energy Advisory – 31st July 2015

    Politics, Geopolitics & ConflictKazakh Oil and the Long Road to the WTOThis week, as Kazakhstan—after 19 years of trying—has finally had its membership in the WTO formally approved, we will take a brief look at Kazakhstan’s oil scene and what’s out there for foreign investors.First things first, Kazakhstan’s WTO process was a painfully long one because of slow progress in enacting energy reforms, among other key reforms and tariff regimes. At the same time that the WTO has approved Kazakhstan’s membership in the club, the Kazakh government has announced plans to build a fourth oil refinery in Mangistau and that…

  • Global Energy Advisory – 24th July 2015

    Oil Market UpdateOil entered another bear market with prices down 20 percent since their June highs. Everywhere you look there are reasons to feel pessimistic. Iranian crude could come back online, adding around half a million barrels per day in production later this year or next. Iran will also sell off about 40 supertanker’s worth of crude sitting in storage.But Iraq could pose another conundrum for oil markets. According to Deutsche Bank, Iraq’s oil output hit 4.1 million barrels per day in June, a surge from around 3.8 million barrels per day month earlier. Amid all the violence and instability,…

  • Global Energy Advisory – 17th July 2015

    Iran: Opening the Floodgates The nuclear deal with Iran will be one of the most geopolitically game-changing events of the decade. Let’s just back up a few chapters in the long-running saga, though. First, Iran does not have nuclear weapons but for 12 long years the mere thought of Iran someday having them has been enough to keep this game going. Now we have a massive 159-page deal in the form of the Joint Comprehensive Plan of Action (JCPOA), which will be handed over to the UN Security Council to adopt a resolution by next week. The game has changed—this,…

  • Global Energy Advisory – 10th July 2015

    GeopoliticsThis week we turn our attention to Saudi Arabia, where a number of things are coalescing to further change the oil price environment and the wider geopolitical picture.First, we note that Saudi Arabia is becoming increasingly desperate to retain its crude oil market share, and this is leading to some interesting deals with India and Russia. For India, the Saudis are offering to ship crude using their own tankers to Indian refineries, which would cut the costs significantly for India. Essentially, this is how it gets around discounting its crude selling price. Some say that using Saudi ships to transport…

  • Global Energy Advisory – 3rd July 2015

    Politics, Geopolitics & ConflictEgyptWe are concerned about the potential fallout and wider implications of the assassination of a high-ranking Egyptian official, Prosecutor General Hisham Barakat, who was killed when a car bomb was detonated next to his motorcade in Cairo's Heliopolis district on Monday. Barakat is the highest-ranking government official to be assassinated in the past two years. This is a major show of force by unknown militants, and the security response will be heavy-handed. Two days later, militants launched a major strike in the Sinai Peninsula to mark the anniversary of Egypt’s military coup. Investors should be aware that…

  • Could Armenia Be The Next Ukraine?

    When Konstantin Kosachyov, the head of the Russian Federation Council's International Relations Committee, said the protests in Armenia against a 16.7 percent power price hike follow a color revolution scenario sponsored by Western powers, many commentators rushed to compare the crisis in Yerevan with the 2014 protests in Kyiv that toppled the pro-Russian president, Victor Yanukovych. However, the street protests in Armenia have more to do with the overall economic situation in the country than with proxy clashes between foreign countries. Although the main power supplier, the Electric Networks of Armenia (ENA) company, 100 percent-controlled by the Russian state-owned energy…

Martin tiller