Energy Exclusive: The US Has Declared War on Brics Oil

One Year Later and Nothing Will Ever Be the Same in Oil Again. The US is Building a Wall Between the EU and non-western oil. The West seeks to economically isolate BRICS nations

Background: Global Changes Hit Oil

Last year showed the importance of Geopolitics as molder of economic relationships. Upsetting the geopolitical balance, as done by four major events this past couple years, the trickle-down effect slowly but very predictably must work its way through the system.  [EDIT- is it did in the 1970s inflation before. So it is happening again]

Those four recent events in chronological order were: The Pandemic (revealing fragile supply-chains), the Ukraine/Russian war (started deglobalization), Western sanctions ( hastened the ROW’s desire to exit USD), and Zoltan’s ensuing commodity collateral crisis (a by product of rising mercantilist-protectionist policies).

Very recently an observation Zoltan had at the structural level was now hitting up in BOA’s astute strategist Michael Hartnett's macro analysis.

That note  entitled Weekly Part 1: Echoing Pozsar, Hartnett says "War is Inflationary" started with the following:

The concepts Zoltan Pozsar wrote that GoldFix shared over the last year are now filtering from the Big Structural Picture (Zoltan’s domain) to the Macro level (Hartnett’s expertise)

In short: What was theoretical, is manifesting in the real world now and headed to a gas pump near you

The rest of that post described a new top-down model for incorporating the changes we are all feeling now into the existing models used. .

This Sunday, Brynne Kelly did her weekly newsletter on Oil and shared it with us. While the events discussed had no immediately discernable impact on oil prices; a definite pattern presented itself along the lines of big picture-stuff filtering down to economic policy.  
Enjoy: Brynne and Vince

Oil: One Year Later and Nothing Will Ever Be the Same

By Brynne Kelly and VBL

The week did not have any particular event fireworks compared to the last 8 months or even the last 8 weeks. But there were some very real, very important changes worth noting last week. These will effect the way we do business going forward and may affect price (or spreads) overnight as these things can do sometimes.

1. Suez Canal Surcharge Increases- makes Dubai less competitive

2. WTI Invades Brent- makes US a bigger supplier

3. EIA Bearish Report Questioned- makes global prices drop

4. Futures Structure - shows global inflation is baking in

We are definitely seeing the longer term effects of the world-split and anniversary of the Ukraine/Russian war manifest in practices, policies, and inflation-risk on a more permanent basis. Here are a few of them…

Bonus: 5 new energy reports from GS, BOA, and more