This is a first for Economisms, someone else doing the work. I have been lazy writing because my view that rates, oil and stocks will head higher. Recession is unlikely until late 2020 or into 2021. Its hard to come up with new ways to repeat the same view.
The guest post is from my buddy Alex. Although, I agree with him often and probably do here, the views are his and his only. If you want to tell him hes awesome or that he is out to lunch I will happily forward it on.
The only safe outcome for Libya and Libya’s contribution to the international oil market is for Tripoli to fall to General Haftar.
The absence of any Tripoli based central government control of the oil producing regions of Libya, far from the capital, led to an opportunity for general Haftar to expand his influence by creating and maintaining stability in those areas. The whole country is dependant on those oil producing regions for its foreign income and relies on general Haftar to keep the oil flowing. Once General Haftar attacked Tripoli he effectively lit the bridge on fire behind him and more importantly behind the whole country. If Haftar is defeated in Tripoli and his military capabilities are reduced enough or eliminated then the stabilizing force on the oil producing regions will also likely disappear, creating a vacuum which will be filled by much less pleasant characters waiting for an opportunity to seize control.
Many people seemed surprised when Trump tweeted out his support for general Haftar, I however was not. Any opposition to Haftar is effectively an opposition to about a million barrels a day of production, production Trump will be relying on when he imposes sanctions on Iran.
Watch Libya carefully, if Haftar loses then the likely consequence will be attacks by rebel groups on oil installations and a subsequent drop in production or at least a meaningful risk premium on whatever production is maintained.
Alex is an energy industry technical expert with experience in most areas of oil and gas upstream operations and a keen interest in oil market analysis. A civil engineer by education and a driller by passion, always on the look out for grey and black swans in the energy market. The views expressed in any of Alex’s articles reflect the sentiment of his current portfolio.
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