Insider

Anton Watman/Shutterstock

The Oil Threat

Why a debilitating price spike is 2 or less years away
Friday, November 10, 2017, 6:57 PM
Enroll NowFor enrolled members only. Enroll or Sign in to read the full article.

Executive Summary

  • China's imminent peak in oil production
  • The final key player in this story: Russia
  • How to prepare before oil becomes a LOT more expensive
  • What to prepare for? Higher prices (for everything real), lower prices (for everything paper), and more wars...

If you have not yet read Part 1: If The Saudi Arabia Situation Doesn't Worry You, You're Not Paying Attention available free to all readers, please click here to read it first.

China’s Impending Oil Peak

The motivations of China are completely obvious here.  China is eager to forge better relations with any country from which it can import oil and KSA is right at the top of that list.

A truly startling (to me) report from the China University of Petroleum put all of this in proper context and urgency came out earlier this year (2017) which announced that after conducting a wide-ranging study that China faces an imminent peak in oil output (from both conventional and unconventional sources) as early as 2018.

This is really big news.   The implications for global geopolitics, financial stability, and literally anything you consider personally important are huge.

China faces looming energy crisis, warns state-funded study

Oct 5, 2017

Nafeez Ahmed

A new scientific study led by the China University of Petroleum in Beijing, funded by the Chinese government, concludes that China is about to experience a peak in its total oil production as early as next year.

Without finding an alternative source of “new abundant energy resources”, the study warns, the 2018 peak in China’s combined conventional and unconventional oil will undermine continuing economic growth and “challenge the sustainable development of Chinese society.”

This also has major implications for the prospect of a 2018 oil squeeze — as China scales its domestic oil peak, rising demand will impact world oil markets in a way most forecasters aren’t anticipating, contributing to a potential supply squeeze. That could happen in 2018 proper, or in the early years that follow.

There are various scenarios that follow from here  — China could: shift to reducing its massive demand for energy, a tall order in itself given population growth projections and rising consumption; accelerate a renewable energy transition; or militarise the South China Sea for more deepwater oil and gas.

Right now, China appears to be incoherently pursuing all three strategies, with varying rates of success. But one thing is clear — China’s decisions on how it addresses its coming post-peak future will impact regional and global political and energy security for the foreseeable future.

(Source)

The author of the article, Nafeez Ahmed (who we’ve interviewed before and admire greatly - he's one of the really good ones out there), left out one other option on China’s scenario table, which was to forge stronger relationships with the world’s two key oil exporters – Saudi Arabia and Russia.   That scenario is now a reality and already well underway. 

Here’s the mind-blowing chart that the study produced.  It literally tells the...

 

Enroll Now
Or Sign In with your enrolled account.
Endorsed Financial Adviser Endorsed Financial Adviser

Looking for a financial adviser who sees the world through a similar lens as we do? Free consultation available.

Learn More »
Read Our New Book "Prosper!"Read Our New Book

Prosper! is a "how to" guide for living well no matter what the future brings.

Learn More »

 

Related content

13 Comments on The Oil Threat

Enroll now or Sign In to read all member comments.