The IEA expects global energy demand to rise 36 per cent between 2009 and 2035. Ken James / Bloomberg
The IEA expects global energy demand to rise 36 per cent between 2009 and 2035. Ken James / Bloomberg

A Roman scholar puts oil prices in perspective



A simple answer to the question which way will oil prices move may be summarised in two words: "high" and "rising".

The International Energy Agency (IAE) predicts global energy demand will grow 36 per cent between 2009 and 2035, with China, India and the Arab world notably increasing consumption.

China, alone, is expected to account for 25 to 40 per cent of the rise in global demand. Economic activity has also resumed in the EU's industrial heartland of Germany as well as the US.

As the world's population approaches 7 billion, supply is not keeping pace with demand for oil and its derivative products. Most of the biggest fields have already peaked and the rate of decline in oil production is accelerating. Experts also identified a chronic under-investment by oil-producing countries. Which way oil prices? High and up.

The flaw is that this views the world as a market, oil as a commodity, and the future as predictable. A sounder piece of advice comes from the Roman scholar Pliny the Elder, who stated that the only certainty is that nothing is certain.

Which way the oil price moves is intimately tied into globalisation. It features widening prosperity and deeper imbalances in economic development, a steep hierarchy in the distribution of wealth and power alongside a diffusion of global power structure, and an unparalleled networking of humanity thereby bringing people to live in an unprecedented intimacy, despite the inherited distances between religion, languages or cultures.

Globalisation is anything but a one-way street to prosperity and freedoms for all.

The market power of the few oil-producing countries that hold substantial reserves of oil - nations in the Middle East and North Africa (Mena) - is already high at about 40 per cent share of the oil market.

Alongside rational calculations of supply and demand, the human saga is driven by our collective inventiveness, passions and emotions. Emotions matter notably in regard to oil, where the world's growing dependence on one region inspires a "fear factor" that contributes as much as US$15 to $20 a barrel in price spikes.

Over-reliance of the world on the Mena region prompts fears of supply disruptions related to concerns about the prospect of a nuclear-armed Iran, the deep social changes afoot in the Arab world, or the precarious hold on power of some rulers. They are compounded by fears and interpreted as a grab for oil reserves with the Franco-British policy, with US backing, on enforcing UN Security Council Resolution 1973 over Libya's airspace.

The motive lies in the EU's espousal of the cause of human rights as the battleaxe that felled the communist party-states of Europe, leading to German unity and the collapse of Soviet power.

The EU would lose all credibility in the eyes of its own citizens if Libya's Muammar Qaddafi was allowed to crush his opponents.

The "Arab spring" is a European interest that opens the way to a wider peace arrangement across the whole region, to a more successful absorption of a European Islam, and a careful reduction of the American presence.

Meanwhile, the far-reaching suggestion by the Russian president Dmitry Medvedev's human rights council that the Soviet Union be declared a criminal state, and that all archives on its activities of the 20th century be opened to scholars, is momentous.

Since the diplomatic farce of Russia's invasion of Georgia impaired the vision of Russia reviving solely on the foreign exchange gained as a petro-state, Moscow has taken discreet steps to move Russia closer to the EU, while also continuing former president Boris Yeltsin's policy to co-operate with China over trade, technology transfer or the settlement of frontier disputes.

Russia joins with China in opposing the western powers' interpretation of the UN 2005 resolution certified the "right to intervene" in the internal affairs of other countries in the name of humanitarianism. But that is the sum of Russian-Chinese relations.

Russia fears China. In 1990, the Russian and Chinese economies were the same size, whereas now, China's is five times larger, and likely to be 10 times larger by the end of the coming decade. Russia's apprehension in being dragged into vassal status as a commodity provider to China's manufacturing platform and despite China's thirst for access to Siberian oil and gas, only 10 per cent of Russia's total exports go to China, compared with 80 per cent to Europe.

More than half of Russia's official foreign-exchange reserves are denominated in euros.

If the Russian presidency succeeds in officially declaring the Soviet state to be criminal, the impact on world affairs is difficult to over-estimate. The Soviet Union's existence was the decisive event of the past century.

A widely held prejudice in Europe and the US is that democratisation involves convergence on a liberal democratic model of free elections, the separation of powers, the rule of law and free speech. But democratisation is also compatible with theocracy, as in Iran.

The West flatters itself if its representatives mistake the form of westernisation for the substance of an updating of older traditions and passions.

What does this say about the direction of oil prices? Because emotions drive people, and people drive markets, oil prices may rise and they may fall.

Pliny the Elder has the last word.

Jonathan Story is emeritus professor of international political economy, Insead business school.

In numbers: PKK’s money network in Europe

Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010

Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year

Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”

Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013 

Score

Third Test, Day 1

New Zealand 229-7 (90 ov)
Pakistan

New Zealand won the toss and elected to bat

Favourite book: ‘The Art of Learning’ by Josh Waitzkin

Favourite film: Marvel movies

Favourite parkour spot in Dubai: Residence towers in Jumeirah Beach Residence

ESSENTIALS

The flights 
Emirates, Etihad and Swiss fly direct from the UAE to Zurich from Dh2,855 return, including taxes.
 

The chalet
Chalet N is currently open in winter only, between now and April 21. During the ski season, starting on December 11, a week’s rental costs from €210,000 (Dh898,431) per week for the whole property, which has 22 beds in total, across six suites, three double rooms and a children’s suite. The price includes all scheduled meals, a week’s ski pass, Wi-Fi, parking, transfers between Munich, Innsbruck or Zurich airports and one 50-minute massage per person. Private ski lessons cost from €360 (Dh1,541) per day. Halal food is available on request.

'Morbius'

Director: Daniel Espinosa 

Stars: Jared Leto, Matt Smith, Adria Arjona

Rating: 2/5

RESULTS

Bantamweight:
Zia Mashwani (PAK) bt Chris Corton (PHI)

Super lightweight:
Flavio Serafin (BRA) bt Mohammad Al Khatib (JOR)

Super lightweight:
Dwight Brooks (USA) bt Alex Nacfur (BRA)

Bantamweight:
Tariq Ismail (CAN) bt Jalal Al Daaja (JOR)

Featherweight:
Abdullatip Magomedov (RUS) bt Sulaiman Al Modhyan (KUW)

Middleweight:
Mohammad Fakhreddine (LEB) bt Christofer Silva (BRA)

Middleweight:
Rustam Chsiev (RUS) bt Tarek Suleiman (SYR)

Welterweight:
Khamzat Chimaev (SWE) bt Mzwandile Hlongwa (RSA)

Lightweight:
Alex Martinez (CAN) bt Anas Siraj Mounir (MAR)

Welterweight:
Jarrah Al Selawi (JOR) bt Abdoul Abdouraguimov (FRA)

A Cat, A Man, and Two Women
Junichiro
Tamizaki
Translated by Paul McCarthy
Daunt Books 

The White Lotus: Season three

Creator: Mike White

Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell

Rating: 4.5/5

Mia Man’s tips for fermentation

- Start with a simple recipe such as yogurt or sauerkraut

- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.

- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.

- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.

 

RACE RESULTS

1. Valtteri Bottas (FIN/Mercedes) 1hr 21min 48.527sec
2. Sebastian Vettel (GER/Ferrari) at 0.658sec
3. Daniel Ricciardo (AUS/Red Bull) 6.012 
4. Lewis Hamilton (GBR/Mercedes) 7.430
5. Kimi Räikkönen (FIN/Ferrari) 20.370
6. Romain Grosjean (FRA/Haas) 1:13.160
7. Sergio Pérez (MEX/Force India) 1 lap
8. Esteban Ocon (FRA/Force India) 1 lap
9. Felipe Massa (BRA/Williams) 1 lap
10. Lance Stroll (CAN/Williams) 1 lap
11. Jolyon Palmer (GBR/Renault) 1 lap
12. Stoffel Vandoorne (BEL/McLaren) 1 lap
13. Nico Hülkenberg (GER/Renault) 1 lap
14. Pascal Wehrlein (GER/Sauber) 1 lap
15. Marcus Ericsson (SWE/Sauber) 2 laps
16. Daniil Kvyat (RUS/Toro Rosso) 3 laps