Ashley, we are looking at 2019 trends putting together several videos. We want to talk to you about international geopolitics. You were able to pinpoint two major areas of trends you saw throughout the year.
So this has actually been the first exciting year in a little while. One thing we've seen is just a wave of global protests and these protests have actually led to changes. We started the year with the yellow vest protest in France and the fuel tax that they were against did, in fact, get taken off the table. Now we’ve seen several leaders get deposed in Africa and Latin America. We actually even have a protest ongoing in Chile, which is a normal stalwart of stability. In line with that, we've seen a bit of a movement away from these pro-Democratic leaders towards more socialist and populist leaders. A trend to watch for next year, Argentina has re-elected Peronists into power so what does this mean for the fiscal reforms that were happening the tax changes that were underway and what's that going to mean for the Shale environment in that country specifically. These protests have really been a little bit out of nowhere and they've been effective which means they're most likely to continue through next year as well.
A lot has changed or been up-and-down since 2014. What is the next trend you have identified?
This is the first year where there's been a geopolitical price premium in oil and it's almost funny to say that you know since 2014 or early 2015 when oversupply oversupply oversupply became the fear you never saw price fluctuations on geopolitical issues. Now keep in mind, it took several successive attacks in the Strait of Hormuz before we saw a price spike but it did occur and it did stay there for some time. So clearly markets are heading into 2020 just a little more cognizant of those regional risks,, more aware of what's going on. This is especially important for India and China. They’re major crude importers. They're continuing to grow next year and they're starting to think what on the ground investments should we be making. So, is China going to keep building crude stocks to avoid a disruption? Are they going to invest in new pipelines or even just shift suppliers away from the Middle East even more than they already have been?
A lot of dramatic happenings throughout the year and we know that you follow our oil markets. in a lot of that Ashley. There are a lot of resources that Stratas Advisors has as well throughout the year and preparing for 2020.
It is definitely going to be an exciting 2020. With these new OPEC cuts, I think we'll be a little bit more in balance. Obviously demand is still a concern and I think if you're looking at the three-year picture, we want to know what are these new economic policies in place in Latin America and in Southeast Asia to a degree. Since that's where the future demand growth is going to come from.
Top articles on geopolitics in 2019:
- China November Crude Oil Imports Hit Record High As Refiners Race To Use Up Quotas
- Iran Outlines Budget To Resist US Sanctions As Oil Exports Plunge
- Saudi Delivers Deeper Cuts As OPEC+ Oil Producers Back New Pact
- OPEC, Allies Stumble Toward Deeper Cuts
- Geopolitical Issues Impact Global Energy Markets
- Oil Falls As US Rights Bill Fuels Tensions With China
- Oil Prices Gain As Market Awaits Signals On US-China Trade Talks
Excess supply has sparked a fresh dilemma among U.S. drillers, which are being asked to cut oil production as storage space fills up.
Not all in the industry are in favor of the Trump administration’s rollback, and the expected litigation will put operators into limbo again.
The administration and fossil fuel industry representatives insist that lands and animals will continue to be protected but opponents remain unconvinced.