Tag Archives: stratfor

Stratfor: how the Iran deal will change the long-term price of oil

Summary: Oil is the most politically and economically sensitive mineral; all lines cross in the oil markets. Here Stratfor discusses how the Iran deal will affect oil prices, which will affect everybody.

Stratfor

How the Iran Deal Will Affect Oil Markets in the Long Term
Stratfor, 17 July 2015

Forecast

  • Iran will offer joint venture contracts to attract international energy companies, which will give the country some advantage over Persian Gulf producers.
  • Tehran will need more than five years to achieve its goal of producing 6 million barrels per day.
  • Legal requirements imposed on foreign firms in Iran will still make operating in the country less cost-effective.

Analysis

Iran was once one of the world’s largest exporters of oil. But ever since Western powers imposed sanctions on the country, a shortage of foreign investment has crippled what is now a corrupt and mismanaged energy sector.

With the announcement of a nuclear deal with the West, and the prospect of some sanctions relief within a year, Iran is now looking to revitalize its oil and gas industry. Tehran wants to increase its oil production from its current level of about 3 million barrels per day to 4 million barrels per day within six months of sanctions removal. And its longer-term goal is even more ambitious: By 2020, Tehran hopes to raise its production levels even higher than they were prior to the sanctions — roughly 6 million barrels per day.

Iran will likely need much more time to achieve that level of production. To develop new oil fields and new technology, Tehran needs access to more than $100 billion of investment — funds that the government is hoping to get from foreign investment. And while relaxed sanctions may open the country up to more outside funding, Iran also needs international oil companies to actually set up operations on Iranian soil. This could be a challenge; burdensome regulations have historically made it difficult for energy firms to operate in Iran despite the country’s ample reserves.

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Stratfor: what the Iran deal means for oil prices

Summary: Here Stratfor discusses one of the big economic and geopolitical questions about the Iran deal, much more important the deal’s effect on Iran’s conjectural nuclear program (30 years of a nuke coming really soon). Low prices have depressed the economies of key nations such as Russia and the Gulf States (plus oil-producing areas of the US). If new oil from southern Iraq and Iran depresses oil prices even more we might see some shocks of a kind unimaginable in the heady days of $100 oil.

Stratfor

How the Iran Deal Will Affect Oil Markets in the Short Term
Stratfor, 16 July 2015

The nuclear agreement between Iran and six world powers will naturally have consequences for global oil markets as Iran, the world’s third-largest oil producer before the Iranian Revolution, eventually exports more oil. Prior to the implementation of sanctions in 2012, Iran was a major crude oil and condensate exporter to Asia, Europe and others — in fact, exports totaled 2.6 million barrels per day in 2011. Today, that figure has fallen by almost 600,000 bpd to Europe and another 600,000 bpd to Asia. Iranian exports now hover closer to 1.4 million bpd, 1 million bpd of which is crude oil.

The July 14 deal paves the way for sanctions to be relaxed by early 2016, enabling anyone to buy oil from Iran. While Iran maintains that it can increase oil production by 500,000 to 600,000 bpd within one month of the removal of sanctions and increase exports to 2.5 million bpd within three months, Stratfor sees these figures as overly optimistic. Iran does, however, have at least 35 million barrels of crude oil and condensate in storage that it could use to increase exports in the interim before its oil production rises again. 2016, consequently, will likely be another year where a healthy oil supply tamps down any oil price recovery.

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Stratfor: ISIS & the rise of Warlord Entrepreneurs

Summary: This analysis by Stratfor discusses the adoption of modern business methods by insurgents, something long discussed here. It’s progress that mainstream geopolitical analysts are finding more analytically useful perspectives on jihadists rather than the usual hackneyed labels. It’s learning, that if continued might make us a threat to them.  {1st of 2 posts today.}

Stratfor

The Rise of Warlord Entrepreneurs

By Jay Ogilvy at Stratfor, 24 June 2015

As the Islamic State digs in after its conquest of Ramadi, U.S. President Barack Obama has been candid about his lack of a strategy to deal with the group, in part because he is waiting for commitments from the Iraqi government, but in part because the Islamic State is poorly understood. We know it is “nimble,” “aggressive” and “opportunistic.” But there is much about it we don’t know.

If you Google “books on the Islamic State,” you might be surprised at how many have jumped off the press in the past year, a phenomenon all the more remarkable given how little we actually know about the group. One book you will not see among your search results, since it does not have “Islamic State” in its title, is the recently published Warlords, Inc: Black Markets, Broken States, and the Rise of the Warlord Entrepreneur, edited by Noah Raford and Andrew Trabulsi. It is an anthology and therefore unlikely to be widely noticed, but I would like to draw on the insights of a few of its authors.

Together with Philip Bobbitt’s analysis of the nation-state’s decline and the market state’s rise, Warlords, Inc. provides geopolitical context for understanding the rise of the Islamic State. Though their prescriptions differ, Bobbitt and several Warlords, Inc. authors define the edges of a white space that the Islamic State is trying to fill by referring to the group’s geopolitical context. By looking at what’s outside the outline rather than what’s inside it, they may be giving us a more accurate picture of the Islamic State than those who claim to be peering directly into the group’s dark and secretive interior.

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STRATFOR gives A New Way to Think About Mexican Organized Crime

Summary: Stratfor looks at events in our southern partner, whose dynamics we ignore but might have a decisive effect on 21st century America. Trade, crime, immigration — Mexico is a central player in all of these, yet we pay more attention to events in Yemen. It’s another example of our cloudy vision, a weakness that can negate even the greatest power.   {2nd of 2 posts today.}

“What nation poses the greatest threat to the sovereignty of the US?”
“Mexico.”
— Q&A following briefing by Martin van Creveld to a US intelligence agency. Twenty years ago they were incredulous. Now it seems more realistic.

Stratfor

A New Way to Think About Mexican Organized Crime

By Tristan Reed at Stratfor, 15 January 2015

Decentralized but more powerful

Since the emergence of the Guadalajara cartel in the 1980s as one of the country’s largest drug trafficking organizations, Mexican organized crime has continued to expand its reach up and down the global supply chains of illicit drugs.

Under the Guadalajara cartel and its contemporaries, such as the Gulf cartel, led by Juan Garcia Abrego, a relatively small number of crime bosses controlled Mexico’s terrestrial illicit supply chains. Crime bosses such as Miguel Angel “El Padrino” Felix Gallardo, the leader of the Guadalajara cartel, oversaw the bulk of the trafficking operations necessary to push drugs into the United States and received large portions of the revenue generated. By the same token, this facilitated law enforcement’s ability to disrupt entire supply chains with a single arrest. Such highly centralized structures ultimately proved unsustainable under consistent and aggressive law enforcement pressure. Thus, as Mexican organized crime has expanded its control over greater shares of the global drug trade, it has simultaneously become more decentralized, as exemplified by an increasing number of organizational splits.

Indeed, the arrest of Felix Gallardo in 1989 and of colleagues such as Rafael Caro Quintero and Ernesto Fonseca Carrillo a few years prior led to the breakdown of the Guadalajara cartel by 1990. Thanks to geographic factors, however, Mexican organized crime was destined to increasingly dominate the global illicit drug trade, soon even eclipsing the role Colombian drug traffickers played in supplying cocaine to the huge and highly lucrative retail markets in the United States.

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Stratfor: The Islamic State’s Pretense of Strength in Yemen

Summary:  Today Stratfor provides another bulletin the front (one of the many fronts) in our mad global war on groups we don’t like (excerpt when they’re allies, or we accidentally put them into power).   {2nd of 2 posts today.}

Stratfor

The Islamic State’s Pretense of Strength in Yemen

Stratfor, 18 June 2015

The Islamic State launched multiple suicide bombings in Sanaa aimed at Houthi rebels’ political headquarters and two mosques June 17, the eve of Ramadan. According to the Yemeni Health Ministry, the attacks killed at least four people and wounded at least 50 more.

It was the Islamic State’s fourth attack against mosques in Sanaa. The first and most deadly occurred March 20, when suicide bombers killed over 140 people in the bombing of two mosques during midday Friday prayers. Because al Qaeda has eschewed assaults on places of worship, the attack was unexpected and Islamic State suicide bombers were able to easily sneak into the mosques.

In response to the March attacks, authorities increased security at religious buildings, making it more difficult for militants to carry bombs or weapons into places of worship. To evade security, the Islamic State has adjusted its tactics and started planning more complex attacks. On May 22, the group sent a suicide bomber into a mosque with explosives hidden inside his sandals. Once detonated, the bomb resulted in 13 injuries but no deaths because of the small amount of explosives. Security officers at a mosque thwarted another would-be bombing on May 29 when they detained another Islamic State suicide bomber with explosives in his shoes.

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Stratfor asks Why al Qaeda survives the assassination of its leaders?

Summary: Stratfor gives an answer to an oddity of US geopolitical strategy. We have killed so many enemy leaders, yet the flames of fundamentalist Islam continue to spread. See the links at the end for other explanations. But the answers matter not, as our foreign wars run beyond beyond logic — and beyond our control.  {2nd of 2 posts today.}

Stratfor

Why Ideologies Outlive Ideologues

By Scott Stewart at Stratfor, 18 June 2015

“Killing ideologies is harder than killing people.” Last week I made this statement when I was writing about how the al Qaeda form — or brand — of jihadism should not be written off as dead. It is quite possible that the al Qaeda brand of jihadism could even outlast that of its competitor for jihadist hearts and minds: the Islamic State.

The following points are among the several I made to support this argument: Al Qaeda in the Arabian Peninsula (AQAP) has been able to gain considerable strength in Yemen’s current chaos, and high-profile Sahel-based jihadist Mokhtar Belmokhtar recently denied that he had sworn loyalty to the Islamic State.

However, these particular considerations seemed to dissolve this week when Libyan government officials announced that Belmokhtar had been killed by a U.S. airstrike June 14 and when Yemeni sources noted that the leader of AQAP, Nasir al-Wahayshi, had been killed by a U.S. airstrike June 9.

The death of Belmokhtar has not been confirmed. Jihadists associated with the Libyan militant group Ansar al-Sharia, which was reportedly involved in the attack on a U.S. diplomatic facility in Benghazi in 2012, provided a list of those killed in the airstrike in Libya that did not include Belmokhtar. It appears that Belmokhtar may once again have escaped an attack that was reported to have taken his life.

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Stratfor: A high stakes cage match – Nationalism vs. the European Union

Summary:  The European Union appears to be starting its long-predicted endgame, when its  design flaws create insolvable crises. This analysis by Stratfor goes to the heart of the EU, describing the forces that seem likely to halt or reverse the 65 year-long march to unification. They make a bold prediction which, if correct, will change the course of 21st C geopolitics. {2nd of 2 posts today.}

Stratfor

How Nationalism Undermines the European Union

Stratfor, 29 May 2015

Forecast

  • The loss of economic prosperity has hurt European integration efforts. Member states will now push to devolve power from the European Union to the national level.
  • Nationalist and anti-establishment parties in member states will undermine fundamental EU policy.
  • EU institutions will be able to manage this trend in the short term, but the economy will force Brussels to reshape the European Union.
  • Over time, nationalism will trump European integration and governments will repatriate power for the first time in EU history, leading to the collapse of the union.

On May 29, 2005, French voters rejected a proposed European Constitution in a nationwide referendum. A week later, the Dutch followed suit. This clear rejection of greater European integration was an iconic moment in the history of the European Union. Although it came in the form of a nation-state constitution, the European Constitution would primarily have collated all previous EU treaties into a single document. This symbolic act, plus the granting of more legislative powers to Brussels, would have been a major step toward a unified Europe formulated in the wake of World War II.

A decade since the Dutch and French referendums, the European project is in its deepest crisis. The economic turmoil that began in 2009 and produced the eurozone crisis has awakened nationalist instincts that undermine pan-Europeanism. These centrifugal forces have always been present and, historically, led some members to opt out of certain initiatives. The key difference in 2015, however, is that nations will choose to backpedal on integration — a first in EU history.

Integration and Sovereignty

The contest between nationalism and pan-Europeanism has been at the core of the European Union since it was first formulated in Rome in 1957. The union is an attempt to create a transnational entity out of a group of nation-states defined by different economies and political traditions, divided by a history of conflict. To unify these states, the European Union promised peace and economic prosperity. The resulting organization was a hybrid between a unified pan-European entity and a community of sovereign nation-states. In the ensuing decades, these competing visions have continued to clash, with nationalism succeeding several times in slowing the integration process.

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