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Geopolitics

  • 5 Geopolitical Risks Commodity Investors Must Be Wary of in 2013

    On January 14, Deutsche Bank published their 2013 market outlook in which they identified several geopolitical hotspots to worry investors and businesses. They include a wide range of developed and less developed economies, many of which are key producers of commodities and/or a key link in product supply chains. If something goes awry in any of these hotspots what will be the impact on commodities?The US/Middle EastThe shift in the U.S.’s strategic priority from the Middle East to Asia has pros and cons for stability in the Middle East and by implication oil prices. Whereas previously the U.S. might have…

  • Is Iraq Slipping into Civil War?

    Incident: On 22 January, 17 people were killed and dozens wounded in a series of attacks in and around Baghdad and in Northern Iraq. Explosions targeted a military checkpoint in Baghdad, a military base in Taji (just north of Baghdad), a predominately Shi’ite neighborhood in Baghdad (Shula), and in the multi-sectarian town of Mahmudiyah (south of Bagdad). The previous week, more than 80 people were killed in a series of attacks later claimed by an al-Qaeda-linked network. Protesters continue to block the highway leading from Baghdad to Amman and Damascus, and the prime minister has threatened to use force to…

  • Further Attempts to Destabilize Egypt

    Incident: Religious violence between Christians and Muslims in Egypt erupts to a dangerous level. In the city of Luxor, in highly Christian-populated Qena province, Muslim protesters attacked Christian-run shops and Christian-owned vehicles after rumors that a Christian man had sexually assaulted a 6-year-old girl. Police dispersed protesters initially with tear gas, but the tensions have risen to an irreversible high.  In another incident that is still simmering, a Coptic man who was an outspoken atheist sentenced to three years in prison for blasphemy. This particular case has done much to increase the community’s fears of what is to come under…

  • Jordan - Problems Ahead?

    Incident: Parliamentary elections on 23 January were billed as King Abdullah’s reform remedy for stemming the tide of rebellion. The opposition Muslim Brotherhood boycotted the polls because the King’s reform plans are not nearly expansive enough. In fact, the King’s electoral reforms have not met any significant demands of the opposition, other than to increase the quota for women’s representation. This comes amid an atmosphere of ongoing protests and tensions over the conflict in neighboring Syria.  Bottom Line: Jordan faces a major dilemma on two fronts, which are (or will be) interlinked: it can either give in to the opposition…

  • Is Cameron About to Kill the EU

    Incident: British Prime Minister David Cameron is dangling a big choice before the country’s voters should his party win the next election: whether or not to quit the European Union.  Bottom Line: This would be the death knell for the European Union. It would also have disastrous implications for the EU’s efforts in the Western Balkans, whose countries are just on the cusp of membership in the bloc. Analysis: This would have a particularly negative effect on Bosnia-Herzegovina, which has made insufficient progress on reforms necessary for EU integration. The country’s biggest political parties—three of them guided solely by ethno-nationalist…

  • Chevron Hits Morocco, Majors only Blink over Algeria

    Chevron Corp (NYSE:CVX), one of the world’s four largest integrated companies, is now planning to explore for oil in Morocco’s deep waters in a deal that would give it a 75% stake in three concession areas. The oil majors are hardly shaken by recent events in the North African Sahel, including the spectacular hostage crisis last week at a BP-operated gas field in the remote Algerian Sahara.Morocco will not be immune to the Sahel’s growing instability, but the Chevron deal—if it goes through—is an offshore deal, which presents less of a security threat to personnel and operations. Related Article: Why…

  • Oil, Democracy, and Ideas

    The French government came up with a catchy slogan during the 1970s oil embargo imposed by Arab member countries of OPEC in retaliation for the US and Western European support of Israel during the October 1973 Arab-Israeli war. The advertisement that aired nightly after the main evening news gave advise to the people of France on how to conserve oil, which as a result of the ongoing embargo, was in shortage, and the price at the pump had suddenly risen sharply. The typical infomercial, of which there were several different versions, ran about a minute or a minute and a…

  • Geopolitical Impacts of the US Oil & Gas Boom

    Much digital ink has been spilled about the oil and gas boom in the US, the result of ever improving fracking technologies, and whether or not it will lead to energy independence, or even turn the US into an oil exporter. Now a “confidential” report by the German version of the CIA, the Bundesnachrichtendienst (BND), seeped to the surface. It sketched out the boom’s geopolitical consequences. Biggest loser? China.BND reports have conveniently seeped out before. For instance, a “secret” report on how the pending bailout of Cyprus would use German taxpayer money to bail out rich Russians who have deposited…

  • Why This is All Libya's Fault

    A Libyan defense force charged with making sure the nation's oil sector is secured said it was strengthening its lines along the western and southern borders given regional instability. A decision to use force to help ensure the territorial integrity of Mali, to Libya's south, prompted al-Qaida militants to storm a natural gas facility near the Algerian border. Libya's own energy sector is trying to recover from civil war in 2011 and oil production has since rebounded to close to pre-war levels. Libyan oil production was halted during NATO-led conflict, forcing a brief spike in crude oil prices. Should the…

  • Algeria Hostage Crisis - Look to Mali for Answers

    Incident: Islamic militants generally based in Mali launched an attack on Monday/Tuesday on a BP-operated gas field in the neighboring Algerian Sahara desert. They took over 600 hostages from 10 different countries. The bulk of the hostages appear to have been freed by the militants just ahead of an Algerian Special Forces raid, which itself killed some 35 hostages and 15 of the estimated 20 militants. A number of hostages remain unaccounted for, including Americans and Britons. Bottom Line: While this crisis went down over 1,000 kilometers from the Algerian capital, Algiers, and is about Mali—not Algeria—it will reverberate throughout…