Tag Archives: Iran

Oil Geopolitics and Iran

There has been much fuss lately as to the huge impact a deal with Iran will have on oil prices globally.

I personally see the near-term impact on oil markets likely to be far less significant than most oil analysts predict, despite Iran’s large natural gas and oil reserves.

The bottom line is that a deal with Iran would likely add only about 500,000 barrels/day to the 90-million-barrel daily oil market over the next 12 months. This would be a non-trivial amount, but clearly not a “game changer”.

The baseline is for prices to return to about $70 for a barrel of Brent Crude in 2016. Additional supply from Iran would knock roughly $5/barrel off expectations – or less than one quarter of a standard deviation. Said another way, additional Iranian output could move prices lower, but many other factors, such as changes in global GDP or the return of Libyan oil, could prove more meaningful over the next year. What’s more, recent trading suggests the market has already priced in much of this risk.

Over the longer term, I believe an increase in Iranian output could be for sure significant. With investment and time, Iran could meet a greater share of global demand for oil and liquefied natural gas (LNG). It also could ship natural gas to Europe via pipeline, challenging Russia’s dominance.

The details of the contracts Iran signs with international oil companies will be telling. Depending on the terms offered to Western companies, other oil producing nations – Iraq, in particular – could feel the pressure. Increased competition for investment would be a material signal that lower prices will endure longer.

I still though believe that the key factor in the global geopolitical game of oil will be China not Iran.

China is today the second largest importer of oil in the world and its appetite for oil is all but insatiable, growing at 8 percent a year. They decided to go with cars instead of sticking with mass transit. Plus, factories that produce cars can easily be converted to military needs. I believe within twenty years they’ll have more cars than the U.S. and that same year they’ll be importing just as much oil as we do. So here’s the deal. They don’t have it. Want to guess where they get it from? Iran. They signed a deal saying if Iran would give them lots of oil, China in return would block any American effort to get the United Nations Security Council to do anything significant about its nuclear program. They’ve been doing a lot of deals with each other ever since. Oh yeah, these two countries are very cozy indeed. Anyway, China gets most of its oil from Iran. And they don’t just need oil—they need “cheap oil” because they sell the least expensive gasoline in the world. I think that’s to keep everybody happy driving all those new cars.

Bottom Line: Iran’s agreement with major world powers to curtail its nuclear program in exchange for the lifting of economic sanctions opens up the world’s fourth-largest oil reserves, second-largest natural gas reserves and an 80 million population to multinationals. But the strict, decades-old U.S. restrictions on doing business with Tehran, which predate the nuclear crisis and relate to other concerns such as terrorism support and human rights abuses, will remain in place.

What will be particularly difficult for American companies is if they are the only ones that are prohibited whereas the rest of the world will be trading. Problematic because every time you’re at a disadvantage relative to your foreign counterparts, you lose market share.

Want to crush ISIS?

I personally believe ISIS will never become a serious and credible state in the world.

 

They have made it clear that they don’t care much for international diplomacy or law  and that only Sharia can be used to govern their new state.

 

A fanatical force like this does well at first; they carry out brutal acts, capture swathes of land, steal, murder, rape, perform forced conversions to Islam and run a well oiled recruiting machine but this can only last for a while because sooner or later their resources are depleted and the circus over.

 

So you wanna crush ISIS? Better act fast and swift… Here’s a short list of their Achilles’ heal.

 

1. ISIS is militarily overextended and hopelessly ineffective against a trained and well equipped army. Although they’re led by a few savage Chechen’s and some Arab militants who answer to a mysterious bearded man who calls himself “Abu Bakr Al-Bagdadi”, it will take only one crushing defeat to completely demoralize their forces, who so far have only shown their prowess in gunning down heretics (Shia, Ezidi, Christians and some ethnic Turkmen), beheading children and foreigners and stealing some old military equipment left behind by the US and Russia.

 

For More: Want to crush ISIS?

 

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Iran is No Peace Partner

Everyone today would love to see a deal with Iran, but let’s face reality folks. Iran is no peace partner and no ally to the West and will never be as long as the mullahs are in power.

 
It is a fact that no matter how much the Iranian propagandists try to sell Iran as a country with a very vibrant society, eager to embrace the West, Iran’s record of press freedom and human rights is dismal and its sponsoring of terrorists the world over – starting with Hezbollah – is second to none.

 
Just take a close look at Supreme Leader Ali Khamenei when delivering speeches in front of hyped-up citizens pumping their fists in the air and chanting “death to America.” and see for yourself. Or take a closer look at other Iranian leaders boasting about how Tehran “controls four Arab capitals …or go and listen to the Iranian top protégé Hezbollah Secretary General Sayyed Hassan Nasrallah, continuing to launch vitriol against Saudi Arabia, Turkey and other sovereign nations. Complete lunatics on the loose.

 

For More: Iran is No Peace Partner

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About Iran’s Most Lethal Weapon

If one had to define Iran’s most lethal weapon today, I would say it’s not a piece of machinery but the “mastermind” behind it all. An operative by the name of Qassem Suleimani; the commander of Iran’s Quds Force — the foreign branch of the Iranian Revolutionary Guards.

 
Due to the nature of his position, Suleimani’s operations have been of course clandestine; so it’s often impossible to know for sure whether he and his Quds Force have been involved. But after one look at the circumstantial evidence, patterns begin to emerge.

 
Here are a some of key operations that Suleimani has been tied to over the last twenty years.

 

1. The 2005 Assassination of former Lebanese prime minister Rafic Hariri

On February 14th, 2005, Rafic Hariri, a former prime minister of Lebanon and one of the leaders of the country’s Sunni community, was assassinated when more than 2,000 pounds of TNT detonated by his motorcade in Beirut, killing him and 21 others.

 

For More: About Iran’s Most Lethal Weapon

The Challenges and Opportunities in Turkey

Challenges and Opportunities Turkey

Challenges and Opportunities Turkey

Turkey is today at the center of the world with on one side Russia, on another side the Gulf countries, and on the other side the Central East Asian countries., it is without a doubt turning into a tourist and financial and investment center in the region second to none.

Having bounced back from its own profound financial crises in 1994 and 2000, Turkey is indeed well prepared today to ride out the current global economic storm.

With the bank’s capital adequacy ratios at more than 17% — it is clear that Turkish banks are today very liquid and stable, even despite the adverse global market conditions we are facing.

Because of the country’s political stability since 2003, its financial market stability, and the liquidity of its banks, investors are today flocking to Turkey to invest in there.

In the last 30 years for example, and up to 2003, Turkey had only $5 billion or $6 billion in foreign direct investments. Since 2003, the country have had more than $15 billion to $20 billion in direct investments as equity.

Read More: Opportunities in Turkey

Thank you

Ziad K Abdelnour

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