Like Saudi Arabia Banning Oil Exports – OWTW

🇰🇿  IT DIDN’T TAKE LONG

It was just last week when we commented on the social unrest over in Kazakhstan and said that Russia wouldn’t be the only major player to jump into the fray:

China just spent nearly $28 billion securing those commodities (mostly oil and gas but also uranium) in Kazakhstan. Our guess is we’ll soon see China stepping in to protect their interest.

Sure enough, that’s exactly what happened a few days ago:

From the article:

China is willing to increase “law enforcement and security” cooperation with neighbouring Kazakhstan and help oppose interference by “external forces”, China’s foreign minister said on Monday, after violent protests in the Central Asian country.

Wang Yi, who is also a state councillor, made the comments in a call to Kazakhstan’s foreign minister Mukhtar Tileuberdi, according to the Chinese foreign ministry.

At the risk of sounding like a broken record, it bears repeating… Without energy security, you don’t have any political security. And China appears to be well aware of that.

🛢️  LIKE SAUDI ARABIA BANNING OIL EXPORTS

Speaking of energy security…

Imagine Saudi Arabia banning oil exports. Well, something very much like it has just happened.

In fact, we would argue this is even worse than the Saudis banning oil exports. Why? Well, oil exports of the “head choppers” amount to 17% of global crude supply, which is a lot… but consider this:

Energy (in)security is going to be one of the dominant themes for 2022… and beyond.

On that note, our friends over at Resource Insider put together a free report on a fascinating way to profit from this trend — a fast-growing market that’s projected to expand 33,233%. Click here to get more details.

🤷  ALL THINGS TRANSITORY…

Feels like a lifetime ago, when — back in February 2020 — we started warning that lockdowns will bring about inflation and shortages. Fast forward to today, and this pesky stuff is now part of our daily lives. We recently set up a dedicated inflation channel in our Insider private forum, where members can share their own experiences with all things “transitory”.

Insider member Leo sent in this from a popular hu​​mmus spot in the San Francisco Bay Area:

🤔  MAYO WITH PURPOSE?

Longtime readers will undoubtedly be familiar with Western energy companies going increasingly “woke”. Almost every week, we hear of Shell, BP, or other Western oil and gas majors caving to the pressure of the woke mob and exiting a project or dumping assets to “reduce carbon footprint”.

Make no mistake, though. It’s not like other companies are immune to this virtue-signaling hysteria. This week, British fund manager Terry Smith blasted consumer goods giant Unilever for “losing the plot”:

Smith, a veteran stockpicker who runs the £28.9bn flagship Fundsmith Equity Fund, wrote: “Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business.”

He said that while “the most obvious manifestation of this is the public spat it has become embroiled in over the refusal to supply Ben & Jerry’s ice cream in the West Bank . . . there are far more ludicrous examples which illustrate the problem”.

Smith added: “A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot. The Hellmann’s brand has existed since 1913 so we would guess that by now consumers have figured out its purpose (spoiler alert — salads and sandwiches).

As we previously commented in one of the Insider Weekly issues:

This ESG narrative has become a religion. How do you break a religion/belief? Well, something big has to happen. Very big! It is said that “everyone is a greenie until it hurts their pockets.” We suspect that a major energy/inflationary crisis (the likes of which hasn’t been seen in a few generations) needs to ravage the planet before the ESG theme is drawn into question by investors.

Today, we’re even more convinced of it.

💡  IT’S ALL ABOUT PERSPECTIVE

If nothing else, perspective keeps you grounded. We thought it would be appropriate to close today’s email with the following thought we shared with Insider members the other day (author unknown):

Imagine you were born in 1900. When you’re 14 World War I begins and ends at 18 years old with 22 million dead. Shortly after, a global pandemic Flu called ‘Spanish’ kills 50 million people. You come out alive and free. You are 20 years old. Then, at 29, you survive the global economic crisis that started with the collapse of the New York Stock Exchange, causing Inflation, Unemployment, and Hunger. At 33, the nazis come to power. You turn 39 when World War II starts and ends at 45 During the Holocaust (Holocaust), 6 million Jews die. There will be over 60 million deaths in total. When you’re 52, the Korean War begins. At age 64, the Vietnam War begins and ends at age 75 A boy born in 1985 thinks his grandparents have no idea how difficult life is, but they have survived several wars and disasters. A boy born in 1995 and now 25 years old thinks it’s the end of the world when his Amazon package takes over three days to arrive or when he doesn’t get more than 15 likes for their photo posted on Facebook or Instagram. In 2020, many of us live comfortably, have access to different sources of home entertainment, and often have more than we need. None of this existed before. But we survived far more disastrous circumstances and never lost the joy of living.

Have a great weekend!

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