The End of Oil
How to play the greatest shift in the energy market for 100 years
In this report you will discover:
- Why the collapse of the oil kings is playing out
- Four little charts of the solar revolution
- Winston Churchill’s greatest gamble is back
- How to play the race for “white diesel”
- The horseless carriage being replaced by the petrol-less car
Dear Fellow Investor,
Oil’s place at the heart of the world economy is over. Empires will fall. And fortunes will be made.
If you’re pressed for time, that’s the three sentence version of what this report is about.
Of course, there’s a lot going on in those few sentences. A huge shift in the energy markets – dominated by oil and oil derivatives for so long – is under way. It is perhaps the greatest shift the energy world has or will see for a century. And it will entirely remake the world as we know it.
Nations that have long relied on oil as their route to wealth and power will, at best, suffer a decline. At worst, collapse altogether.
In fact, early in 2016 I published a somewhat controversial report on the looming threat to oil dependent nations like Saudi Arabia. I called the report “Fall of the House of Saud”. If you didn’t see it, the idea was simple: The House of Saud – rulers of Saudi Arabia – has used the Kingdom’s oil reserves to accrue huge wealth and status. No oil, no power, no House of Saud.
It was a controversial claim – and a risk to publish. After all, Saudi Arabia is still one of the wealthiest nations on the planet, with the financial and political influence to get what it wants. So I’ll admit: I’ve been surprised by how quickly the story has moved from informed speculation to reality.
For instance, at the start of May 2016, the Saudi’s sacked their Oil Minister of 20 years… and even renamed the Oil Ministry itself – replacing it with a new Ministry of Energy, Industry and Mining.
Then Prince Mohammad bin Salman, the man charged with turning the economy round, made the problem rather more explicit.
“We have an addiction to oil. This is dangerous.”
And of course, recent developments have betrayed the Saudi state of panic. They’ve even turned on each other. Bin Salman locked many of his family’s wealthiest and most powerful in the Riyadh Ritz Carlton hotel and demanded they pay up their ill-gotten gains from corruption.
It’s easy to see why tensions are escalating:
DESPERATE: The country is now looking to sell an estimated 5% stake in Saudi Aramco – the state-owned oil company – to raise capital. This would be unthinkable if they saw the current low oil price as a ‘blip’.
BROKE: The country has to pay its contractors in IOUs, because they don’t have enough money to hand.
SHEDDING MONEY: At one point, the country’s foreign reserves were falling by $10bn (£6.9bn) a month. That’s slowed, but the trend is clear.
SHAKY ECONOMY: French bank Societe Generale is betting the country will have to ditch the riyal’s peg to the US dollar – which has been their economic policy since 1986 – to protect the Saudi’s finances. That would cause the oil price to collapse even further.
These moves were unthinkable until the oil price declined by two thirds between 2014 and 2016. It has shown the Gulf state for the economic basket case it really is… totally dependent on crude for its survival.
But – for all the drama – those developments have all been just a taste of what is to come.
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