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Geopolitics

  • 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.…

  • Yemen Conflict Could Be A Catalyst For Something Much Bigger

    Yemen is at the center of a proxy war between regional heavyweights Iran and Saudi Arabia. It's the source of fears of a broader Sunni-Shi'ite conflict. And it has implications far beyond its borders. Here is a look at the stakeholders in the fight. The Playing Field The Yemen conflict is a tale of two’s: Two leaders: Former President Ali Abdullah Saleh (a Shi'a), who was replaced amid the Arab Spring uprising by his deputy, current President Abdu Rabbu Mansour Hadi (a Sunni) Two regions: North Yemen and South Yemen, which merged in 1990, with Saleh as president Two capitals:…

  • Global Energy Advisory – 27th March 2015

    Frontier Updates • Amid the oil price slump, if you’re considering Africa, forget Nigeria and look to Kenya. The east African emerging oil giant has just received a boost from the World Bank, which raised its growth forecast for the country. According to the World Bank, Kenya’s economy will be boosted because, for now at least, it’s a net importer of crude. Nigeria, by comparison, is being pummeled by the Boko Haram insurgency, and its revenue base is not diversified enough to be able to handle low oil prices. That’s good for other investments, but what about Kenyan oil? We’re…

  • Global Energy Advisory – 20th March 2015

    Politics, Geopolitics & Conflict • Iraqi forces (backed by Shi’ite militias) have retaken most of the towns and the area surrounding Tikrit, in central Iraq, but have made little progress taking the city of Tikrit itself from the Islamic State (IS). There are oilfields outside of Tikrit, which IS has set fire to in an attempt to distract Iraqi forces from the city. Here we have the al-Ojail oilfield. It’s not the major fields of Basra, but it does pump out around 25,000 bpd that goes on to Kirkuk refineries further north and east. It also produces about 4 million…

  • Global Energy Advisory – 13th March 2015

    Politics, Geopolitics & ConflictYemen’s oil-rich Marib province is the likely next target for takeover by Houthi militants who have unseated the Yemeni government. Houthi rebels have taken over much of the country’s north, but Marib—east of the capital—will be more of a challenge. This province is dominated by Sunni tribes who will not let it fall to the Houthis without a major showdown (read: civil war). The Sunni tribes protecting this province (along with military units) will necessarily have some links to Al-Qaeda. Thus, the Houthi militants will profess to be protecting the oil province from al-Qaeda, or more specifically…