Guest Blogger, Doug Haugh
The Crimea is occupied and now formally seceded after taking a referendum vote under the gun. We have the type of cold war tension between Russia and West that we thought was only for the history books.So, while those who believed the PR around the Olympics about a more modern and open Russia may be surprised, the big surprise is the reaction of the oil markets. More importantly I think it is the reaction of “our” oil market here in North America that reveals the most about how much things have changed in the past five years. Below is a price chart on Diesel fuel from Schneider Electric on the first trading day after the Crimea vote — notice the opening direction.
From the early 1970′s onward every significant geopolitical incident sent oil prices spiking. Any suspected or perceived risk to global supplies and movements was more than enough to cause a run up that. in many cases, derailed economies and especially economies in a state of fragile recovery from deep recessions.
So with the US economy showing real signs of healthy growth for the first time since the financial crisis it is refreshing and surprising to see just how different things are now. What a difference 3 million barrels a day in new US production really means to both the world and to all of us living in North America where “our” oil business is now truly different, if not yet fully independent from the global market.
So while the talking heads will decry the decline of American power and worry about our security, lets remember what our energy industry has done to improve our security. We can now pursue economic sanctions to punish Russia’s behavior without punishing our economy, and we can do so without spending blood and treasure on military action.
Douglas S. Haugh is currently President of Mansfield, a $9 billion industry innovator recently ranked by Information Week as the No. 1 technology innovator in Energy & Utilities and the only nationwide provider of fuel supply, biofuels, propane and diesel exhaust fluid. Haugh is a frequent speaker on energy, supply chain technology and entrepreneurship. He can often be found leading general sessions or seminars at many national conferences and conventions. He also blogs on energy issues at: http://thinkingonenergy.com. The opinions expressed there (and here) are his, and not those of Mansfield.
