Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Dow Stock Market Dow Trend Forecast Current State - 22nd Apr 21
Gold Rebounds Amid Positive Economic Reports - 22nd Apr 21
China's record first quarter fuels strong expansion in 2021 - 22nd Apr 21
Gold Price Next Key Level - 22nd Apr 21
Here's What to Look For When Hiring a Real Estate Agent - 22nd Apr 21
Ethereum EIP 1559 and Raven Coin - 21st Apr 21
Gold, USDX: The Board is Set, the Pieces are Moving - 21st Apr 21
World Economies Need to Find a Lot More COPPER! - 21st Apr 21
DogeCoin CRASH! Time to Start Mining BOODGIE Coin! Crypto Mania 2021 - 21st Apr 21
Pausing Stocks and Gold Fireworks - 21st Apr 21
Precious Metals and Miners Start of New Longer-Term Bullish Trend - P2 - 21st Apr 21
Looking For A Mortgage Broker? Here Is How To Hire One - 21st Apr 21
Amazon AMZN Stock PRIMEDAY SALE! Trend Analysis - 20th Apr 21
Stock Market Sentiment Speaks: You May Not Believe My 2021 Targets - 20th Apr 21
Stock Market Phase Two Projection - 20th Apr 21
Are Precious Metals & Miners Starting A New Longer-Term Bullish Trend? - 20th Apr 21
Inflation: First the Gain, Then the Pain… - 20th Apr 21
8 Stock Market Indicators in 1: Here's the Message of the Panic/Euphoria Model - 19th Apr 21
Gold - You Can Win a Battle, but Still Lose the War - 19th Apr 21
Will Interest Rates Rally Further Push Gold Price Down? - 19th Apr 21
Gold Fireworks Doubt the Official Inflation Story - 19th Apr 21
YuanPay Team Discuss The Process Of Crypto Diversification - 19th Apr 21
Central Banks May Ramp Up Gold Buying - 18th Apr 21
How to Get Rid of Driveway Weeds With Just WATER! 6 Months later NO Weeds, Ultimate Killer! - 18th Apr 21
State of the European Markets - DAX, FTSE, CAC, AEX, SMI, IBEX 35, S&P/MIB, Euro Stoxx 50, RTS - 18th Apr 21
Einvestment Fund: What You Need To Know About Investments - 18th Apr 21
Google Alphabet (GOOG) AI Deep Mind Stock Trend Analysis - 17th Apr 21
Stocks and Bonds Inflationary Slingshot - 17th Apr 21
Best Smartphone Selfie Stick Tripod Review by ATUMTEK Works with Samsung Galaxy and Iphone - 17th Apr 21
How to Give Budgie's First Bath | Easy Budgie Bathing and Water Training with Lettuce - 17th Apr 21
Record-breaking Decrease in New Passenger Vehicle Sale in Europe - 17th Apr 21
US Stocks Climb A “Wall Of Worry” To New Highs - 16th Apr 21
Gold’s Singular Role - 16th Apr 21
See what Anatomy of a Bursting Market Bubble looks like - 16th Apr 21
Many Stock Market Sectors Are Primed For Another Breakout Rally – Are You? - 16th Apr 21
What Skyrocketing US Home Prices Say About Inflation - 16th Apr 21
Still a Bullish Fever in Stocks? - 16th Apr 21
Trying to Buy Coinbase Stock on IPO Day - Institutional Investors Freeze out Retail Investors - 15th Apr 21
Stocks or Gold – Which Is in the Catbird Seat? - 15th Apr 21
Time For A Stock Market Melt-Up - 15th Apr 21
Stocks Bull Market Progression Now Shows Base Metal Strength - 15th Apr 21
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

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