The World Cup has begun. You’ll find yourself utterly mystified by my coverage over the next few weeks.
As a German by birth, Brit by citizenship, Australian by choice and Japanese by something called a “family register”, I have decent odds of winning some way or another.
You might think it’s a bit of a sham to support so many teams. But having consistently been on the wrong side of several famous clashes between England and Germany over the years, no matter which side I chose, I’ve learned to remain neutral between my various options. As well as diversifying into other nations.
The best thing about the World Cup is always the political backdrop. I understood this from a young age thanks to English and German parents.
These days, my understanding of politics has a broader scope. And it’s made me realise that the most important fields of this World Cup are the Russian oil fields. The opening game proved it.
The Russian football side tore apart the Saudi side in a 5-0 victory. Vladimir Putin was seen smugly shrugging from his box when Saudi Prince Mohammed bin Salman leaned over to accuse him of somehow masterminding the whole thing. The FIFA president was strategically sat between them.
I can’t imagine the furore if the Russians had been playing the US or English team. There’d be all sorts of accusations followed up by sanctions and diplomats being expelled.
Instead of having a tantrum over the football, the Saudis and Russians decided to have an oil summit.
The most important price in the world
With trouble in Iran and Venezuela disrupting supplies, the two major oil exporters are keen to cooperate off the field… in the oil fields.
Russia is still quite new to the Opec cartel. The Saudis and Russians are unlikely allies given a rough history.
Under discussion at the oil summit was how much to increase oil output by given the recent price spike. Oil is up 50% over the last 12 months, stoking inflation fears and causing trouble for oil importers.
USD oil price over the last 12 months
Source: Business Insider
You can never overestimate the importance of energy markets to everything else. Past oil crises prove the point. Oil shortages and price spikes have a huge impact. Get on the right side of these events and you can make big money.
But what makes oil and gas so interesting is their political power. For some reason, the world’s key oil exporters are a ramshackle bunch located in dangerous parts of the world. They like to use their control of the market to exert political pressure.
All this creates profit opportunities if you’re in the know. But the energy world is a world apart from other markets. You need to do your company research and understand all sorts of complex science and geopolitics.
That’s why our publisher Nick O’Connor has hired the best man for the job. James Allen has been managing an energy market bureau in New York for the last five years. Now he’s writing Exponential Energy Fortunes for you. Take a look at the extraordinary opportunity he’s already found.
By far the best opportunities in the energy space come from finding small players who are about to be gobbled up by, or partnered with, the big players. That’s where you can see truly monumental gains. Like turning £50 into more than £5,000.
Will the Germans rule in Russia?
The most fascinating geopolitical energy story right now is that of Nord Stream 2. The new pipeline would carry between 70% and 80% of Russian gas exports through the Baltic Sea to Germany.
The Swedish government just gave its approval for the project to pass through its waters, despite strong misgivings.
The big issue is that the new pipeline bypasses the traditional transit states of Ukraine, Belarus, Poland and others. Instead, the gas travels through the territorial waters of several other countries. This robs many nations of enormous tax revenue needed to keep their fiscal positions stable. It also leaves them politically isolated because central Europe would no longer rely on their security for the gas to flow.
Meanwhile, Europe’s reliance on Russian gas will only increase if the project is finished and goes operational. That could be a flat-out violation of EU law, if not just policy. It’s easy to see why the European politicians are worried. Imagine railing against Russia when your citizens need Russian gas to keep warm in winter.
Another political issue that springs from all this is the unintended impact of the US’ sanctions on Russia. They’ve already affected the Nord Stream 2 project on the Russian end.
If the Germans end up doing gas business with companies targeted by the US, then the Germans themselves could find themselves a target of US sanctions. Wouldn’t that be an interesting twist to the trade war? Just the sort of legal and righteous high ground that Donald Trump enjoys taking.
The trouble here is that every nation is meddling in every other nation’s affairs. And thanks to the inter-reliant nature of energy markets, it always comes back to bite.
A world without oil and gas
What would the world look like without all this drama over oil and gas resources? The World Cup would be less interesting, that’s for sure.
But perhaps the question isn’t just a hypothetical. Technology is turning the energy world upside down right now. And fast.
That’s the point of James’ new report at Exponential Energy Fortunes. He’s discovered an energy company which has the potential for something called scalability.
Musicians are the best example of scalability. A few generations ago, a huge amount of musicians had a steady job. Anyone who wanted to hear music had to hire a musician.
Today, we can all listen to Robin Williams make a mess of his repertoire at the World Cup opening ceremony at the same time. He would’ve raked in the cash, because so many people around the world were able to listen to just him at the same time. Music has become scalable – you can sell the same song to everyone. Especially thanks to the internet.
Energy used to be out of the reach of scalability. You can’t sell the same piece of oil to everyone. At least, you can’t deliver it.
But James’ discovery suggests that scalability is about to break into the energy market in a particular way. It’s no wonder he’s predicting mind-boggling gains.
Click here to discover what’s about to happen.
Until next time,
Nick Hubble
Capital & Conflict
Category: Geopolitics