Dan Hassey: The world’s three major geopolitical hotspots — Russia, the Middle East and China — have one common thread: energy. Today we’ll consider what it means.
Hotspots: Russia & the Middle East
The table below lists the world’s largest energy producers in 2011 and 2012.
The countries in red are perpetual hotspots. They include Russia and several Middle Eastern countries.
- The Middle East has been in conflict for thousands of years. Most world economic powers are involved in the Middle East because of the region’s huge, easily tapped energy reserves.
- Iran, Iraq, Syria and Libya are currently the most-unstable Middle East energy producers.
- The Russia-Ukraine crisis is currently on the minds of many energy investors and analysts.
Notice the production difference between Russia and Iran. If we lost both producers due to economic sanctions or any other reason, prices would skyrocket … and the global economy would probably fall into a recession.
The world can probably cope without Iranian oil because other producers could make up the difference. Replacing Russian oil would be much harder.
This is why Europe and Russia’s other trading partners are reluctant to apply tougher sanctions over the Ukraine matter.