Press review 27-07-2014 - Canary in the Gold mine

"An image worth a thousand words". They really exist, coming by now and then, usually in the form of a graph. This week I stumbled upon one of such images, that greatly explains what is happening with the resource industries today. I often point to gold as an example of a depleting resource, throughout the last decade its price increased five fold, but extraction rates hardly moved. But most importantly, during the same period, discoveries of new high grade deposits fell down to almost nothing.

Press review 19-07-2014 - Raging wars

There are moments like this, when war seems to burst everywhere at the same time. Afghanistan, Iraq, Syria, Gaza, Libya, Ukraine, all filled up front pages throughout the week; and these are just the conflicts the media picks up, there is plenty of other gory stuff going on in Africa, for instance. Tension mounts in a world that is definitely going through a period of re-distribution of power and influence.

In Ukraine the conflict deepened significantly with the killing of hundreds of foreign civilians. The western media blames it on the russophone separatists, while the Russian media blames it on the Ukrainian army. As Aeschylus long ago wrote, "truth is the first casualty of war". Along the way, adequate supplies of gas to Europe the coming winter seem ever more menaced.

Apart from Ukraine, Iraq remains the most threatening case to our energy predicament. The picture is starting to look really bleak for the Baghdad government. Lacking foreign intervention a victory in this war seems a remote possibility.

Press review 12-07-2014 - Peak Oil in Russia

This week no energy relevant developments came out of Iraq. The Islamic State seems to be still consolidating its territories, facing scant opposition from the Baghdad government. But the spectacular advances seem to be done with, at least for now. Few western media outlets are able to properly report the situation, with gory news now focusing on Israel and Gaza.

The news meat-grinder has recently been profuse in news regarding the breakaway of the BRICS from the IMF and other OECD controlled institutions. This was a setting trend but that has been accelerated by the backlash of the US spying programme and, more importantly, by the intervention of NATO in Ukraine.

In the midst of all this comes almost unnoticed what is probably the most important energy news of 2014: Petroleum extraction in Russia has definitely peaked. Russian authorities are openly bracing for the ensuing decline in exports and revenues. This was one of the points I recently raised supporting the hypothesis of a return to price volatility.

Press review 04-07-2014 - Waiting for the impact

The flow of news out of Iraq is slowly drying out. The foreign media has access to the Kurdish region, Baghdad and little else. From the newly occupied territories the jihadists are themselves the only reporters available, with gory contents regularly feed to the internet. The Baghdad government launched a counter-offensive last weekend, and although it has failed to gain any relevant territory, it seems to have halted, or at least delayed, the advance of the Islamic State (formerly known as ISIL).

Where will it all end? Can the jihadists content themselves with the Sunni territories or will they seek further expansion? Their organisation and capacities do not cease to surprise, how far can they really go?

So far their methods and efficacy have alarmed everyone else in the region, even Sunni majority states such as Saudi Arabia. For us living here in the so called West, life seems to go on exactly as before, but in fact the world has become a different place the past few weeks.