Oil & Energy Investor by Dr. Kent Moors

The Situation Room: The Aramco IPO Finally Takes Off

by | published December 9th, 2019

Welcome back from the weekend, Oil & Energy Investors.

It’s gearing up to be a busy week, what with recent geopolitical events, and my travel schedule. I’ll be heading up to Baltimore this week to meet with my team to discuss some exciting new developments for you.

Beyond that, my analysis this week will span the globe, from Saudi Arabia to the UK, and all with significant potential impacts on the oil and energy markets.

Below are my top two focus points for this week.

So, let’s take a look…

The Strange Way Trump’s Metal Tariffs Will Hit Oil Profits

by | published December 6th, 2019

Years ago, during an assignment in which I had some responsibility for structuring and applying economic initiatives as an element of coordinated U.S. policy, we started using a particular phrase: “asymmetric sanctions.”

This referred to elements of economic warfare that have a disproportionate impact.

Simply put, “asymmetric sanctions” reflected the ability of the U.S. to inflict heavier damage on an opponent than it as likely to experience in response. In that sense, it shared several common elements with broader asymmetric conflicts where the outcomes were not experienced at the same level on both sides, or tended to have a larger result than what was committed to achieve it.

Usually, “asymmetric” would be used when discussing terrorist attacks where a single attacker could inflict multiple casualties, or the fear that the next suicide bomber would result in dramatic changes in lifestyle.

But when it came to economic applications, it was usually a binary view: a sanctions regimen would inflict more damage than it would produce in response from the target.

Of course, the corollary problem was that practitioners would almost always believe the sanctions would produce a greater result than what happened. There has been no conflict decided by economic sanctions. These are tools to be used with others, not stand-alone weapons.

After all, if a total oil embargo against Japan could not prevent World War II (and probably hastened Tokyo’s move south into Indochina), all others must be looked at more realistically.

Fast forward to today and we begin to see more pronounced consequences.

Take the current example of supposedly asymmetric sanctions