GLOBAL RESOURCES ANALYSIS


EFFECTS | SUPPLY INTERRUPTIONS


In the western world supply interruptions are not common. But that soon will become a development of the past. By the high prices stocks will become lower and lower. Governmental policies will be more focused on diversifying in types and suppliers of energy, than on in depth strategic stocks of one type of energy. The long term market will more and more be influenced by the short term severely higher priced spot market. As in January 2008, both South Africa and China has severe power interruptions. The first thing governments in times of Peak Oil will do is offer a stand still premium (or just a governmental order) to the major power intensive industries. But if they don't accept that or this isn't enough power interrupts will happen. In South Africa (both a very well developed nation with very strong emerging areas) power shortages are regular part of life and economy. Just Google on power shortages South Africa to see more on this subject. On television may requests to turn of power using devices. Power failures are now 'rationalized' by a city area power cuts rotation scheme. In China there is a severe gasoline shortage, the gasoline use grows there in higher speed oil distribution majors can build gas stations. This results in long rows for every gas station. The new grown foreign oil majors also purchase distribution infrastructures/brands. So is Q8 is owned by Kuwait, Citgo by PdVSA of Venezuela, etc. In times of more demand than supply, these foreign oil majors can decide only to supply their own distribution networks, to gain the distribution profit very easily for own benefit. Any oil major without own -origin nation government bounded- reserves is like a bundle of flowers in a vase: beautiful now, but with build-in short life time.


Author: Gijs Graafland


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