Interview: The Geopolitics of Commodities with Scott Smitson on The Lykeion Channel.
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Interview: The Geopolitics of Commodities with Scott Smitson on The Lykeion Channel.
I interviewed Scott Smitson several months ago on Episode 3 of KAOS Theory; Scott and I return to discuss the Geopolitics of Oil and LNG. Thanks to Lykeion for hosting.
It was a pleasure speaking again with Scott Smitson, with whom I had the pleasure of interviewing in Episode 3 of KAOS Theory. I met Scott at West Point back in February, where we each presented our respective papers.
We turn the tables now, as Scott interviewed me on my Macro and Geopolitical views on Oil. We also talked about a recent article Scott wrote about the Geopolitics of LNG. This talk was recorded on 11/16/23.
YouTube:
Show Notes:
Scott asked me to set the table on my nuanced views of Oil: Long-Term Bullish but Short-Term Bearish.
I referenced a recent piece about these nuanced views as well as on what I call the Supply/Demand Singularity here:
We talked about the fragility of the current OPEC+ setup given KSA’s unilateral cuts as well as the perverse impact of Supply Cuts keeping the Fed more vigilant despite being also Demand Restrictive at the same time:
I referenced the “Four Horseman of US Economic Resilience” that will likely cause the Fed to remain more restrictive than RoW and therefore weigh upon Oil, which is a GLOBAL commodity:
We talked about the importance of the USD’s role in Oil trade, and Scott referenced my BRICS piece which counters the De-Dollarization talk:
I also referenced my West Point paper which details the underlying NATIONAL POWER drivers for TRUST in the USD:
I compared Sovereign Restructurings with Corporate Restructurings and emphasized why BOTH sides of the National Balance Sheet need to be considered when one talks about Endgames:
We talked about my Amazon Credit Analogy for why recent headlines of KSA accepting CNY are just political posturing:
On the various pressures for PBOC to devalue CNY and the “Scylla/Charybdis” Dilemma it faces:
Why the current Geopolitical setup is NOTHING LIKE 1973 — we talked about the lack of Exit Strategy for KSA’s unilateral cuts as a reason why I think Geopolitical Risks to Oil are actually to the DOWNSIDE this time.
Don’t forget about the Oil Market Share War during COVID.
Market Share Wars occur due to the OPEC+ identity, Revenues = Price x Volume:
We then talked about LNG and Scott’s recent article on Lykeion, entitled “Geopolitical Risks to the European Gas and LNG Market”:
https://www.thelykeion.com/geopolitical-risks-to-the-european-gas-and-lng-market/
We talked about how the only real way to sanction Oil was through BLOCKADES and how the porosity of sanctions was likely intentional:
We talked about how Mother Nature and LNG saved Europe last winter from its Russian Gas Dependency but how this might be teaching them a bad lesson:
We touched briefly on some of the inconsistent Energy Policies we have here that negatively impact our National Security:
It’s frustrating to see us shoot ourselves in the foot from a policy standpoint when we are naturally long Natural Resources, because that advantage won’t last forever.
I’ve said loudly and often why the US Shale Miracle won’t easily be replicated elsewhere. It’s actually one of the reasons why I remain Long-Term BULLISH on Oil:
We literally could have talked for hours and hours on these important topics.
Maybe this was just the first of many segments!
Please enjoy the interview I did with Scott on his area of expertise: Alliance Management in the IndoPac. Lykeion called this the “Podcast of the Year”:
