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Geopolitics

  • Does Russia Have Anything to Fear from Chavez's Failing Health?

    Incident: Russia makes moves to deepen its energy cooperation with Venezuela, with Rosneft announcing a planned $10 billion investment in offshore oil and natural projects and the creation of a joint venture to purchase Russian oil drills. In total the two sides plan to invest $47 billion over the next six years. Other Russian companies will invest an estimated $7 billion in these same projects, and Rosneft expects a second investment phase to see it contribute an additional $16 billion. Bottom Line: This deal, according to Venezuela’s energy minister, should boost production from the state oil company to 1.12 million…

  • Could we See a Revolt in Azerbaijan?

    Incident: Azerbaijan is experiencing an unusual amount of unrest as protesters take a stance against corruption and challenge the authority of Azerbaijani strongman Ilham Aliyev, who has responded with a brute force that is likely to backfire and trigger a stronger protest momentum. Bottom Line: A series of protests that turned violent in some areas and triggered a social-media-inspired solidarity response in Baku are first and foremost about corruption in a country whose immense oil riches have failed to trickle down to the general population. With presidential elections set for October 2013, Azerbaijan should be monitored for increasing signs of…

  • Iran on the Offensive

    Until now, the Arab oil producing countries of the Persian Gulf, also called the Arabian Gulf, or to those seeking political neutrality, simply the Gulf, looked at their Persian neighbour with suspicion and trepidation. The fear came from mainly the military superiority that Iran wields over the Gulf, Persian or Arabian, depending on how you prefer to call it. The reasons behind the animosity between Arabs and Persians are numerous. There is the historic schism of culture, language, tribal, territorial but also religious. For the most part the Arabs are Sunni and the Iranians are Shia. Yet, although being a religious…

  • Exxon, BP Straddle Front Line in Iraq-Kurd Oil War

    BP Plc (NYSE: BP) and Exxon Mobil Corp. (NYSE: XOM) are caught on opposite sides of the front line of the oil war between the Iraqi central government and the Iraqi Kurds, with Baghdad talks with BP over a deal in disputed Kirkuk and warns Exxon about working with the Kurds.On 28 January, the Iraqi Oil Minister Abdul Kareem al-Luaibi again threatened to cancel Exxon’s contract in the massive West Qurna-1 oil field in southern Iraq if it refuses to stop dealing separately with the Kurds in Northern Iraq.  “We can’t allow Exxon to step over the constitution. It can’t…

  • 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…