Geopolitical and Political Risks make their strong comeback to global oil and gas markets

[jose chalhoub + 388]

The last recent weeks we have seen how political and geopolitical events have influenced in one way or the other the oil markets, be them the ongoing clashes in Yemen, the continuous shutdown of ports in Libya, the tweeting against OPEC by President Trump, the high expectancies regarding mexican and colombian oil industries facing the arrival of the left in Mexico of Lopez Obrador and uncertainties over the status of the left in Colombia if Petro does not win presidency but how will he capitalise his political base in the coming months, and also the issues regarding Iran and North Korea, and the uncertainties regarding OPEC and Russia over the cut deal, along with the already tiresome situation in Venezuela and its oil future, close to entire collapse due to the political crisis. Even if these previously mentioned issues have not been reflected heavily in oil prices, we might expect them to be in the long run in the global oil landscape for months to come. 

[Seleskya + 50]

yes, but mostly on the futures trading side of this equation, I think. Yemen won't fundamentally change anything unless it sparks off a wider regional war, which is where it seems to be headed. I think it pits Saudi Arabia and UAE against each other a bit (and they're also sparring over Somalia and another port). 

[TraderTate + 186]

check out BlackRock's new geopolitical risk index: 

 

[jose chalhoub + 388]

thannks folks, for participating in the discussion and also for the information about blackrock. Well yes i do agree also about the relative little importance of Yemen in global oil markets and production but i take it considering the repeated attacks against the Ma'rib pipeline and also the latent threats regarding saudi oil facilities because of attacks from the houthi rebels in yemeni soil. But not for yemeni production whatsoever. Overall the Middle East has always been a nest of political risks for oil markets in general in my view. 

[TraderTate + 186]

how much do you think markets have become immune to geopolitical risk originating in the Middle East (even when it's real)?

[Rodent + 1,424]

I think the market is growing more immune, but geopolitical risks keep the volitility in the market, which means some traders somewhere are making money. 

For the Black Rock chart, I'm not sure "North Korea tensions" is an apt summary of the geopolitical goings on. 

[ronwagn + 6,290]

The abundance of oil and natural gas finds and the great increases due to fracking and horizontal drilling have greatly reduced geopolitical crises. The threat of future wars due to energy needs is gradually decreasing. As more nations have the ability to use new technologies the geopolitical risks should nearly vanish. Renewables will play an increasing role but it will be of the most value in those areas that have few other resources.