{"id":28067,"date":"2017-11-17T06:51:04","date_gmt":"2017-11-17T11:51:04","guid":{"rendered":"http:\/\/olduvai.ca\/?p=28067"},"modified":"2017-11-17T06:51:09","modified_gmt":"2017-11-17T11:51:09","slug":"oil-prices-could-double-if-middle-east-conflict-escalates","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=28067","title":{"rendered":"Oil Prices Could Double If Middle East Conflict Escalates"},"content":{"rendered":"

Oil Prices Could Double If Middle East Conflict Escalates<\/a><\/h3>\n\"Oil\"<\/picture>\n
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Barrel traders recently pushed the price of West Texas Intermediate (WTI) oil above $US 55; the first time in over two years.<\/p>\n

Scarcity doesn\u2019t really justify the upward price movement. There isn\u2019t a shortage of oil in the world. But there could be, in the worst case, if missiles start flying between two of the world\u2019s largest oil players: Saudi Arabia and Iran.<\/p>\n

Maybe it won\u2019t happen. But maybe it will. And that\u2019s what the \u201cgeopolitical risk premium\u201d is all about. It\u2019s an anxiety surcharge that\u2019s tacked onto every barrel of oil, in fear of supply disruption on a moment\u2019s notice. And the fear is back.<\/p>\n

After three years of naivety we\u2019re back to acknowledging the known unknowns of the Middle East, the uncertainties that strap a 10-to-20 percent premium on the price of a barrel.<\/p>\n

Paying a risk premium for oil is nothing new. It\u2019s been around for decades and has gone up and down with the hostility thermometer of the Middle East.<\/p>\n

Unusually, the pricing of risk dropped to\u00a0zero<\/em>\u00a0around 2015. Three main reasons prompted a sense of world peace: the promise of the Iranian nuclear deal; a feeling that booming oilfields in Texas could offset any disruption; and a growing surplus of oil inventories in storage tanks around the world.<\/p>\n

Of late, the notion of oil obsolescence has also perpetuated a feeling of nonchalance. \u201cWho cares about the Middle East and their oil?\u201d has been a question driven by the utopian narrative: \u201cI\u2019m not worried, everyone will be driving electric cars in a few years anyway.\u201d<\/p>\n

But it\u2019s all been a false sense of security.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Oil Prices Could Double If Middle East Conflict Escalates Barrel traders recently pushed the price of West Texas Intermediate (WTI) oil above $US 55; the first time in over two years. Scarcity doesn\u2019t really justify the upward price movement. There isn\u2019t a shortage of oil in the world. But there could be, in the worst […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3,5],"tags":[522,592,5332,16958],"class_list":["post-28067","post","type-post","status-publish","format-standard","hentry","category-energy-2","category-geopolitics","tag-middle-east","tag-oil-price","tag-oilprice-com","tag-peter-tertzakian"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28067","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=28067"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28067\/revisions"}],"predecessor-version":[{"id":28068,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28067\/revisions\/28068"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=28067"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=28067"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=28067"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}