Balancing the oil market between traditional and new regulatory political risk

ANALYSIS of markets, energy markets no less than others, often begins with a look at the fundamentals. In energy markets these analyses tend to change, move and require constant updating. International politics, on the other hand, while widely regarded as chronically fickle, have rarely required a deeper analysis of its fundamentals. The fundamentals of the global economy and politics have, for many decades, proved to be fairly stable. Yet for several years it has become widely appreciated that global politics are becoming increasingly unstable and that the values and conventions steering international relations in the past decades are under pressure. One can argue about the key causes, but one way of looking at it is that the set of main actors and their internal weighing has changed, making some feel constricted by the old space allocated to them within the system. Others have shrunk and look for new means through which to attain their goals. This all leaves us with a global system in which competition and aggressive positioning is playing an increasingly important role. Nowhere has that been as clear as in the Middle East, where the US’ efforts to pivot away over the past...