In Davos, George Soros and Hermitage Capital’s Bill Browder is talking about great uncertainties which could make huge impact on the oil price in the not so distant future. Bill Browder’s scenarios worst case is $263/barrel. Read an the article about this in Fortune. There are a number of uncertainties mentioned in the article.
- Iran is on collision course with the West – Iran could declare an oil embargo on the west (Soros + Browder)
- Putin shows that he can be troublemaker when he shuts of the natural gas supply to Ukraine (Soros)
- The possibility of the fall of House of Saud (Browder)
- Oil embargo by Hugo Chavez (Browder)
- Civil war in Nigeria (Browder)
- Unrest and violence in Algeria (Browder)
- Major attacks on infrastructure by the insurgency in Iraq (Browder)
These are definitely real and possible threats. Unfortunately Browder doesn’t take into account the possible interrelation between these seemingly different possible events. One of these could trigger the other in a chain, which could create much more chaos than of they nicely go off one by one, separated from each other.
I think there are some more large scale changes and underlying issues that also must be regarded as well. What about the change in values and attitudes among the muslim population? Could it be so that the reason for Hamas being in charge in Palestine is that a larger part of the population have become more aware and determined to stand up for their rights?
Another example is that since some time there is a diplomatic conflict between the Muslim world and Denmark because of publication of caricature pictures of Muhammad in the Danish newspaper Jyllands-posten. Read about the conflict at Al-Jazeera’s news site. There is a now a widespread and growing boycott of e.g. Arla’s products (a Scandinavian company selling dairy products) and today a group in Gaza (al-Aqsa martyrs) urge the Danish (and Swedish) people living there to leave the area within 72 hours. Leaders of the Muslim world is now urging UN to ban attacks on religion like the ones in the Danish newspaper.
The problem is that according to the laws freedom of speech, the Danish government say they cannot act. The right to publish almost whatever they like (e.g. caricatures of Muhammed) is protected by the constitution.
It seems to me that this particular conflict (which is almost common in its kind) is getting more serious consequences than before. I can’t see what is happening in e.g. Saudi Arabia, but it sounds like the boycott is going on on all levels, and not just at the top. And if even a lot of people at the grass root level feel the need to show their opinion in this case, the conflict may be broader than it appeared in the beginning.
If there are broad value changes this in itself is a huge underlying uncertainty how it will play out and could argue for a more connections between seemingly disparate events.
In Global Guerillas blog John Robb talks about how different terrorist groups are using the same tactics today. They seem to learn from each other and in Nigeria we can now see the same tactics being successfully used in Iraq during the last year. Terrorism seems to have changed into a strategy of systems distruption which seems much more effective. The problem is that in a society reliant on a working infrastructure, we are extremely vulnarable to small disturbances. Different groups rather quickly copy each others strategies, which increase the pace on their march towards finding the weak spots in our society.
This uncertainty is about the increased learning capabaility due to the faster spreading of ideas i.e. the open source approach to strategy and tactics among terrorist and activist groups. Especially since the trend seems to be heading for infrastructural disturbance.
There are of course more uncertainties, but I wonder what Browders scenarios had resulted in if he had taken just these two into account? $400/barrel?