JOURNAL: The Great Game

A great game worth tens of billions of dollars in profits is now in motion ("a Soros moment" in hedge fund parlance).  The key to the pay-off:  predict when, where, and how global guerrillas will strike next. 

The game is derived from the lesson of Iraq: that a small disruption effort by a handful of guerrillas can radically move global oil prices.  Estimates of its sustained impact are as high as $15-20 a barrel due to a lack of excess capacity in the system to make up for the short-fall from Iraq. 

Who wants to be the next Soros?  All it takes is insight into how global guerrillas operate...

Comments

[Ronnie Horesh]

Better would be to use market incentives to reduce conflict, not just to speculate on where it's going to occur. You might be interested in my Conflict Reduction Bonds idea: http://socialgoals.com/wpbsshort.html

[Osama_been_forgotten]

Better would be to use market incentives to reduce conflict, not just to speculate on where it's going to occur.

If there were anything resembling a "free market" in the oil business, I'd concur. But there isn't. There is Opec. (and, I suspect, collusion between the oligarchy of large multinational conglomerates).

So who's going to be the next Soros? Guess who's not running for President in '08, cuz he's going to be too busy pillaging all the government money he just flooded the private sector with.

[Freedonia]

One of the the sea water injection lines into Ghawar gets blown before the end of the summer. That might cause more than a $15-20 increase, however.

[Cardenio]

What's happening with the big gas pipeline project from the Caspian Basin ? That's probably where a lot of action is.

[John Robb]

The current price of oil is function of Iraq's oil system disruption (a loss of 1-2 m barrels a day from prewar production). It has deprived the market of a production buffer at a time when Chinese demand is booming. We are now in a capacity constrained inelastic market. Any additional disruption will result in severe price movement.