Middle east oil geopolitics, page-4

Eshmun,
Good topic.
The world has gone exponential. We are getting into territory where we have not been before. Before the internet etc things just played out slowly. Now we have an exponential situation that is fast growing out of hand.

Libya, a beautiful well run country exporting 1.5 mbpd. Rather than kill Gaddaffi the USA should have made it another USA state. Or better still a United Nations State. As Hillary blithely commented "I came , I saw, He died ." How pathetic Cameron and Hillary were. They left a mess. The United Nations should go in there and run it like a Government. Everyone would prosper and the scourge of ISIS would be curtailed. ...exports are now down to 200,000 mbpd. The UN have to sort this out.

Iraq,
When the USA invaded not many in congress knew the difference between a Shiite or a Sunni. George Bush Senior had the chance to really put it right but blew it . And than his little son came in and really blew it. Now Iraq is in a quagmire and whilst they have somehow increased their production, recent reports point to big trouble brewing in the South. What the UN should be doing is blocking all the roads to Mosul until they surrender. Pretty easy really and no one needs to die. Pro West

Iran,
Capable of much higher production. But will they West invest? As long as they say the Holocaust was make believe then I don't trust them. If I was Kerry I would make them publicly detract that before any negotiations. But they will put another 300,000 bbls per day into the market. Pro Russia.

Syria
What a mess. Pro Russia, Iran.

Turkey,
Getting beligerent.
Have done a deal with Qatar to reinforce things. Pro West

I could go on but really we have huge tension in the Middle East. Yemen fired 6 missiles into Saudi Arabia before Christmas . Luckily they were intercepted. Otherwise oil would be at $200 plus. I am not joking. The world runs on oil and if supply stops you had better go straight to you supermarket and stock up. Did you know that Australia only has about 35 days petroleum storage? You are meant to have 90 days. Turnbull needs to be questioned on this urgently. Because you could listen to world crippling oil news tomorrow morning. The Aussie Govt would immediately incentivize oil production. They could face a very big crisis. NZ could probably fight it but I remember being a BP Rep in Whangarei back in 1973. I had to tell the brickworks to reduce their oil consumption by 33%. I think Tui and Kupe might save the day.

This is the first time for yonks that oil investment has gone negative for 2 years. Over $250 Billion has been cancelled. This is going to come back and bite the world hard. I almost chuckle when I hear that China's growth is slowing. China's oil consumption was up 8% last year and their ( and India's ) consumption per capita is surging. Give me a break.

North Sea is declining rapidly and UK shale will never eventuate. Not enough police.

Brazil is a corruptive nightmare and those fantastic salt wells are way too costly. As I have said before. The world only has so much oil. It is a finite resource. As the price goes up then we will find ways to extract more through better technology and this high price will encourage the development of alternative fuels. But these alternatives are not yet fully developed to cope with the oil crisis in 2018/19. Shale oil will be dead by then. A couple of years at$ 40,50 60 will have left a rusty mess. And a financial disaster similar to the housing crisis. Shale is a ponzi that is about to explode in the face of America. Just like the shale gas. Another ponzi. USA shale gas is now falling because it is only economic at $6. So much for gas exports. How can you export a $6 product to Asia when the selling price is $7. Gas and oil prices must rise.The Saudi's will determine that.

In Summary, and thanks Eshmun for the opportunity, the Middle East is in a turmoil and when cornered rats fight back. Get hold of Turnbull and tell him to get ready.

BTW, SXY is well poised in all of this.

ps The Middle East is starting to be split down the middle. West on the West and Anti Israel on the right. It is not good. I don't know whether to applaud Obama or not.

The world can't afford $110 oil and it can't afford $30. But it needs it. And the capex cuts are very deep. Expect the unexpected.