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How The Coming Oil Shock Will Impact Absolutely Everything

Price spikes, supply crunches, and recession everywhere
Friday, July 6, 2018, 7:44 PM

Executive Summary

  • The Inevitable Supply Crunch
  • Why The Central Planners Are Making This Worse
  • Why The US Shale Industry Will Implode (And Soon)
  • The Growing Geopolitical Risks To Oil Supply
  • The Shock Felt Round The World

If you have not yet read Part 1: Why The Coming Oil Crunch Will Shock The World available free to all readers, please click here to read it first.

As I’ve written extensively in the past, there are four entire years of missing upstream oil and gas investment (2014—2017) that will lead to an equivalent period of missing oil and gas supply sometime in the future. With the usual 5-7-year lag between discovery and production, my time frame for that was somewhere between the end of 2018 and 2022.

When -- not if -- that supply shock hits, there is no amount of fresh investment money that can rapidly bring new supply on line. Doing so just takes time -- measured in quarters or years:

As we enter into the second half of 2018, the supply/demand balance has already tipped into a slight deficit. I am clearly predicting that:

  1. this supply imbalance will only get worse, and that
  2. oil prices will have to rise to compensate.

The only development that could possibly prevent this from happening would be a rip-roaring recession, as only economic decline has proven to be able to reduce demand by as much as will needed to avoid this supply crunch.

As we can see from the below chart, the world has been... » Read more

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If The Saudi Arabia Situation Doesn't Worry You, You're Not Paying Attention

A key geopolitical axis is swiftly shifting
Friday, November 10, 2017, 7:57 PM

While turbulent during the best of times, gigantic waves of change are now sweeping across the Middle East. The magnitude is such that the impact on the global price of oil, as well as world markets, is likely to be enormous.

A dramatic geo-political realignment by Saudi Arabia is in full swing this month. It’s upending many decades of established strategic relationships among the world's superpowers and, in particular, is throwing the Middle East into turmoil. So much is currently in flux, especially in Saudi Arabia, that nearly anything can happen next. Which is precisely why this volatile situation should command our focused attention at this time. » Read more

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We Risk Being Collateral Damage In The Neocon Lust For War

So much so that I've upped my personal preparations
Friday, October 28, 2016, 9:40 PM

Among the many conflicts that are boiling over, the one that concerns me the most -- by far -- is the West's very intentional efforts to demonize Putin specifically, and Russia generally.

Blatantly obvious propaganda is being used, most heavily by the very same (and unrepentant) main stream media outlets that were used the last time around -- when we ended up commencing a 'pre-emptive' war based on ginned-up intelligence that turned out to be wholly false. We owe it to ourselves not be so easily led this time around. » Read more

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Making The World A More Dangerous Place

US foreign policy at work
Friday, November 6, 2015, 9:06 PM

Without any doubt, the Middle East has been a very long-simmering region of violent religious and tribal enmity.

In that regard, perhaps today is no different than 1,000 years ago. But given the importance of the remaining oil in the Middle East to the next 20 years of global economic health, the violence and chaos seen there recently is hugely important to the entire world. » Read more

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The End of Dollar Dominance?

Loss of reserve currency no longer an idle threat
Monday, August 11, 2014, 7:24 PM

Dollar Daze

One thing that is absolutely crystal clear at this point is that Putin and Russia consider the US and its dollar hegemony to be a parasitic anachronism that no longer serves anybody besides the US.  Putin has made many direct comments to that effect and then followed them up with concrete deals struck in ways that bypass the dollar entirely.

Here's what he said back in 2011, well before any of the recent action started: » Read more