Those who remember the 1970s can attest that unrelated foreign governments poking their paddles into political matters they do not understand and that are taking place thousands of miles away from their comfortable offices frequently end up destroying the lives of their own citizens rather than resolving any turmoils that are none of their business.
The United States chose a side in the early 1970s Yom Kippur War in the Middle East, and as a result, the Arab League countries, who provided the bulk of oil to the United States at the time, opted to react with a trade embargo.
As a consequence, fuel restrictions, very high energy costs, and a 55mph speed limit were imposed.
Today, things are likely to become a lot worse for a much less serious time of political turmoil.
It seems that the present situation is poised to destabilize the inhabitants of Europe and America, while boosting Russia and its allies.
The huge exodus of multinational corporations from important global markets has resulted in supply shortages and logistical problems.
It is critical to examine the basic bones and structure of any local economy. The majority of Western economies are focused on tertiary services and are net consumers rather than producers, while Russia has a non-diversified, raw materials-based economy and is a significant supplier of oil and gas to the rest of the world.
Yesterday, the more astute observers in the banking and electronic trading sectors calculated very clearly that if Russia now sells only 30% of its annual production of natural gas and oil, its energy producing industry, which is the largest in the world, would generate 100% of the revenues that it would have generated if it had sold 100% of its annual production before all of these sanctions were imposed.
In layman's terms, this implies that Russia may now sell one-third of its gas and oil for the price it would have received for the whole amount.
Who is the true victor in this situation? Not the customer. Many UK people will soon be lining up to fill up their vehicle with petrol for £250 per tank, or figure out how to heat their house without spending £1000 per month. As a result, the market has become inflationary.
Looking at it another way, it is the Western countries who have turned on their own people over the last two years.
Gas costs in the United Kingdom alone have risen from an average of 55p per therm to 700p per therm for many private customers.
Crispin Odey, a well-known investor who has previously mastered tumultuous markets, has increased his returns by 30% in the last two weeks as a consequence of the market upheaval.
Mr. Odey correctly said that the UK is just in the early stages of an "energy crisis," and that prices would rise higher, plunging the Western world into a devastating recession.
Following the lockdowns of 2020 and 2021, this is the next step in the program.
We all saw the G7 leaders gathering in Glasgow last year in the name of the 'climate,' and the ESG roll-out began among many corporations.
Oil and gas are clearly commodities that are in more demand than ever before, and in India and China, they are being imported and consumed at such a pace that the black stuff cannot be refined fast enough to reach its buyers. It's business as usual in India and China.
Russian oil companies will just sell their now exorbitantly priced oil to China and India, both of which will continue to produce, expand, and run their massive economies with zeal.
As a result, oil and gas are the commodities to keep an eye on. Things called 'naughty pleasures' are often highly valued.
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