Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

The Energy Trouble Center Nobody’s Talking About (Yet)

Commodities / Energy Resources Apr 08, 2015 - 09:44 AM GMT

By: Money_Morning

Commodities

Dr. Kent Moors writes: I’d been looking forward to delivering the keynote address at a conference in its capital city, Manama. But now the government has cancelled my appearance, and the U.S. Department of State has even seconded the conclusion.

What’s keeping me out of Bahrain, a wealthy, tiny island country in the Persian Gulf? The threat of Sunni-Shiite violence, which is spreading throughout the Middle East and North Africa. There’s no sign that it’s slowing down.


But Bahrain isn’t the only country with troubles pushing oil prices higher. In fact, this instability is threatening one of the world’s oldest oil-producing nations. Although it’s off the radar for most Westerners, trouble in this little country could have a sharp impact on your energy investments.

My contacts there tell me that this could get nasty… fast.

“Arab Spring II” Is Heating Up

First, let’s examine the three well-known “global hotspots” pressuring the oil price upward.

Two years ago, during the so-called “Arab Spring,” Bahrain provided the only example of Sunni versus Shiite violence. Bahrain has a Shiite majority population and a Sunni minority governing family. The island nation is connected to Saudi Arabia by a causeway… and is just north of major U.S. operational bases in Qatar.

With such a strategic location, Saudi Arabia stepped in to curb the 2013 violence in Bahrain. It sent its army and police force over the causeway to occupy Manama.

But now anti-regime protests in Bahrain are on the rise again. And elsewhere in the Muslim world, “Arab Spring II” is heating up and dragging oil prices along with it.

Yemen continues to unravel, with Shiite rebels there establishing alliances with rebels in the Horn of Africa, just across the Mandab Strait.

The Mandab Strait connects the Gulf of Aden with the southernmost part of the Red Sea. It is a lynchpin in sea traffic north. And trouble there would put pressure on a main Saudi crude export facility further up the coast at Yanbu. Some 5 million barrels a day flow through Saudi Arabia’s largest pipeline (the East-West Pipeline) to that port.

There’s disturbing information also leaking from Saudi Arabia’s Eastern Province, home to most of the country’s 8-billion-barrel-per-day oil production. It is also the only Shiite majority area in Saudi Arabia. The new Saudi King Salman is blaming Shiite groups from neighboring Iran for directly fomenting unrest in the region, forming a pincher action of domestic instability in the east and Yemen to the south.

The New Energy “Trouble Center”

But there’s a new “trouble center” with more direct implications for both crude oil and natural gas exports.

Sectarian unrest is creeping into Azerbaijan, a vital oil and natural gas supplier to international markets. The nation currently holds an estimated 7 billion barrels of proven crude oil reserves. Should this small nation show signs of instability, it could have a quick and sharp impact on global energy market prices.

As veteran readers of OEI well know, I am in Baku frequently for a variety of consulting and policy purposes. Baku, once called the “Black City” for being literally covered in oil, is the capital of Azerbaijan. It’s the origin of the Baku-Tbilisi-Ceyhan Pipeline, which carries natural gas to a terminal in the Mediterranean. And it’s also the target for new natural gas pipeline initiatives that aim to lessen European dependence on Russian export. Truly, this little-known country is becoming a focal point for the energy industry.

While Azerbaijan has a Shiite majority population, it has not previously been prone to sectarian unrest. That’s now changing with parliament elections coming later this year.

The opposition to President Ilham Aliyev is growing, as are the more punitive responses from the government. Recent low oil prices have hampered Aliyev’s ability to stem inflation, offset unemployment, or use the State Oil Fund (SOFAR) to meet social needs, sparking anti-regime demonstrations. But under the guise of human rights concerns, some of the political opposition more closely resembles a Shiite sectarian movement headed by radical imams of some public impact.

In addition, Azerbaijan also used to be the northwestern province of Iran. A reinvigorated Iran (following the apparent “agreement” with the 5+1 on nuclear aspirations – details TBA) reunited with Azeri Shiites would fundamentally change the entire Caspian region and its export potential.

Feeling the Domino Effect

In classic knock-on fashion, this would put greater pressure on Kazakhstan, which lies on the northeastern border of the Caspian Sea. The Kazakh oil/gas production picture has been languishing due to drooping prices, and unrest is slowly building. This is not currently a Sunni-Shiite problem. But Kazakhstan is feeling the domino effect from “Arab Spring II” nonetheless.

As the sectarian problem expands in the Middle East and North Africa and spills into the region of the Caspian Sea, the impact on oil reliability prospects will increase. Look to see upward pressure on oil prices throughout the summer.

Being able to understand these geopolitical wildcards remains a crucial element to navigating through energy investments. I’ll use my international contacts and boots-on-the-ground experience to keep you abreast of any new developments.

Source :http://oilandenergyinvestor.com/2015/04/the-energy-trouble-center-nobodys-talking-about-yet/

Money Morning/The Money Map Report

©2015 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules