There are several catalysts driving oil prices higher over time. Some are economic, some are geological, and some are none of the above. In the latter category, Nigeria and Saudi Arabia figure prominently in the news of late as poster children for disturbing examples of what awaits the bigger oilfields that occur all too infrequently on the planet for satisfying the increasingly ravenous consuming crowd.
Politics reborn as war on low and stable energy prices is leverage in the global economy for those who, rightly or wrongly, think they have no other means of expression and influence. For consumers, it’s a new tax on an old concept: the cost of doing business.
That cost is vulnerable to upside spikes in the short run, and a slow but steady rise in the long run. For the former, Friday’s attempted but ultimately foiled attack on the Abqaiq oil facility in the Saudi Kingdom was one more wake-up call about the nature of the energy business in the modern era. The site chosen for the attack was hardly a surprise. Abqaiq processes about two-thirds of the 9.5 million barrels a day of Saudi production, home of the world’s largest single source for crude exports.