Folks, we are in serious business! Not because off the back of...

Folks, we are in serious business! Not because off the back of the 12.79% increase in today's share price but thanks to sweet Mr Trump, OPEC and Russia cohesively working wonders for our little red ant! Global oil supplies were already getting tight before Trump vowed on Tuesday to exit the Iran nuclear deal and impose "powerful" sanctions on the OPEC nation. Iran is the world's 5th biggest oil producer.

Joint production curbs by Opec and Russia have cleared the four-year glut of oil. There is no longer an ample safety buffer against supply shocks. The geopolitical "premium" on prices has returned.

The Maduro (President) regime in Venezuela is entering its last agonies, and the country's oil industry is imploding. Venezuela's oil production has fallen by nearly 600,000 b/d from a year ago due to chronic mismanagement" inside the country. North America has run into an infrastructure crunch. There are not yet enough pipelines to keep pace with shale oil output from the Permian Basin of west Texas, and it is much the same story in the Alberta tar sands.

The prospect of losing several hundred thousand barrels a day of Iranian oil exports would not have mattered much a year ago. It certainly matters now.

'Oil price shock is looming'

It is the confluence of simmering political crises in so many places that has driven Brent crude to $US77 a barrel, up 60 per cent since last June.

"We believe an oil price shock is looming as early as 2019 as several elements combine to form a 'perfect storm'," said Westbeck Capital. It predicts $US100 crude in short order, with $US150 coming into sight as the world faces a crunch all too reminiscent of July 2008. The fund warns that the investment collapse since 2014 is about to deliver its sting. Declining fields are not being replaced. Output from conventional projects has until now been rising but will fall precipitously by 1.5 million barrels a day next year. By then global spare capacity will be down to a lethally thin 1 per cent. US shale cannot plug the gap.

"The mantra after 2014 of lower for longer has lulled oil analysts into a torpor," Westbeck said. Needless to say, a spike to $US150 would precipitate a global recession.

Lets reminisce about the boom times when oil pretty much stayed above $100 a barrel between 2011-2014, reaping 107.3mt worth of new project FIDs.

Luck, that has evaded us for what seems like an eternity, has now tapped us on the shoulder! The macro environment is going from strength to strength.

I can see clearly now the rain has gone... Its going to be a bright (bright), bright (bright) sunshiny day!