Oil

The Brent oil price has now fallen by 15 per cent in less than three months and is now below the psychologically important figure of $100 a barrel. Last week I wrote about the reaction in the industry. But the fall is beginning to have political consequences as well.

Brent Crude Oil Future three month chart

Across the world oil producing and exporting countries have come to rely on high, and ideally rising prices. Some countries save the revenue for a rainy day, but most, especially those with rising populations, tend to spend. Circumstances vary, as do the realistic options for adjustment, but the current concern is real and will shape political actions well beyond the oil sector itself. Read more

Energy executives returning from their summer holidays face some hard choices. I know of at least three major oil and gas companies that have ordered full scale strategic reviews.

The problem, for the companies and for investors, is that prices are falling. The Brent oil price is down 15 per cent since June and by the time you read this could have slipped below $100 [Update: this morning, Brent fell 87 cents to $99.95 a barrel – a 14-month low.] Natural gas and coal prices are also down. Read more

China's Jiang Jemin, the CEO of CNPC and Tony Hayward of BP smile after signing a major oil deal with Iraq in 2009 (AHMAD AL-RUBAYE/AFP/Getty Images)

Happier days: China's Jiang Jemin, the chief executive of China National Petroleum Corporation, and BP's Tony Hayward, signing a major oil deal with Iraq in 2009 (AFP/Getty Images)

One of the ironies of the current chaotic situation in the Middle East is that a country that could arguably be at risk of losing the most is standing aside.

While the US and some European powers agonise over whether – and how – they should intervene to prevent the disintegration of Iraq, China is absent. But China needs Iraqi oil in growing volumes. The country’s import dependence for crude and products now stands at 8m barrels a day and is rising. According to the latest International Energy Agency estimates, Chinese imports could be well over 11mbd by 2030. That is on modest assumptions about economic growth and generous assumptions about gains in efficiency and substitution out of oil, in sectors where a switch is possible. The figure could be higher if China cannot increase its own production.

The only country in the world likely to be able to provide such an increase in production is Iraq, and it is no accident that China is heavily invested in the development of fields such as Rumaila and West Qurna outside Basra in the South. On the Iraqi government’s own figures, China is the largest foreign investor in the country’s oil sector. As US oil consumption and import requirements decline, energy security has become a Chinese issue. Read more

An Egyptian protester waves the national flag. MAHMUD KHALED/AFP/Getty Images

A protester waves the Egyptian flag (Getty)

After a decade of introspection, Europe is being forced to confront the instability on its borders, particularly to the east and the south.

At least five deeply troubled states – Mali, Libya, Syria, Iraq and Ukraine – pose a diverse series of threats ranging from a flood of refugees to the radicalisation of individuals and terrorism, to the disruption of energy supplies.

The problems in each of the five could spread to other states and regions – including Lebanon, Algeria and the Balkans. But further problems could be yet to come, if the list of unstable countries is extended to include Egypt. The risk is very serious.

A casual observer would be forgiven for thinking that Egypt has been stabilised by the election of President Abdel Fattah al-Sisi and the removal from government of the Muslim Brotherhood. The outcome may not be exactly what was hoped for when the protesters gathered in Tahrir Square in Cairo three and a half years ago, but there is order in the streets. Unfortunately that is not the full story. Egypt is financially broke and dangerously dependent on the insecure generosity of the Gulf states. The risk of violence has killed the tourist industry, which was a major source of revenue and employment. Living standards have fallen and Egypt now faces a profound crisis with a shortage of energy, water and food. Read more

Last week I wrote about the forthcoming independence referendum in Kurdistan. To move from events there to what is happening in Scotland is a surreal experience. In Erbil the vote will be a deadly serious matter which could create a new country for a nation which as they say has no friends but the mountains having been a victim of international betrayal and cynicism for centuries. There is no knowing whether the Kurdish referendum will end in triumph or tragedy. In Edinburgh what should be an equally serious debate about breaking the relationship with the rest of the UK is now close to a farce. Read more