European Islam is all Sunni. The Balkan one is because it is of Ottoman origin, the western one is because immigration comes from Sunni areas. For this reason we do not see before our eyes the intensity of the conflict that divides the Sunni world from the Shiite one, an endemic conflict in the millenary history of Islam which reopened in bloody forms after the Iranian revolution of 1979.
The bombing of Shiite mosques in Pakistan and Afghanistan, the ten-year war between Iran and Iraq in the XNUMXs, the ungovernability of Lebanon, the war of the Sunni Isis against the Shiite governments of Iraq and Syria, the ongoing siege of Aleppo, the ongoing war in Yemen, the Shiite penetration of the Sunni Sahel in recent years, the Iranian attempt to arouse the Shiite populations of eastern Arabia against the Sunni ruling houses, first of all that of Saud, are all aspects of a conflict that is been compared, in terms of intensity and multiplicity of fronts, to the Thirty Years' War in seventeenth-century Europe.
The leadership of the Sunni world is disputed between Turkey neo-ottoman, Egypt which houses the great Islamic universities e Saudi Arabia, custodian of sacred places and great financier of Islamic expansion in the world. The leader of the Shia world is Iran.
If the Petroleum it is today at 47 dollars and not at 100 for two reasons. One, well known, is the explosion of American fracking. The other, less considered but equally important, is the very harsh conflict between Saudi Arabia and Iran.
The Saudis are 30 million, the Iranians are 80 million. Saudi potential oil production, on the other hand, is three times that of Iran, 12 million barrels per day against 4 million. Oil, therefore, is more important to Arabia but more valuable and vital to Iran. Producing as much as possible to lower its price, as Arabia has done in these two years, hurts the Saudis a lot but hurts Iran even more.
So far the Saudis have been coping with declining oil revenues drawing on the reserves of the royal house (which still get confused with those of the state) and starting a borrow on the bond markets. But now the time has come to cut the budget, cancel projects, reduce the welfare and salaries of public employees. For the house of Saud, the risk of having to take the road of exile and of spending his life in the casinos of the Côte d'Azur no longer comes only from an uprising by the Shiite minorities of the eastern province but also, in perspective, from a probable loss of consensus in the historical Sunni base. For this reason, from here on out, Saudi Arabia will no longer try to keep the price of oil down.
The announced deal for a reduction of OPEC production of 700 thousand barrels per day seems to go in this direction. In a skeptical and short market, the Saudis and Iran have therefore found an agreement. To keep fighting you have to stay alive.
Looking closely though, no real barrels will be taken out of production. The announced cut is simply the lower seasonal output Saudi Arabia makes in the fall and winter, when air conditioners are turned off and domestic energy demand declines. Just a front deal, therefore, to squeeze the shorts and prevent a fall of crude oil below 40 dollars.
In the world, after all, oil continues to be very abundant. The Russia produces more and more, the Caspian is finally taking off, theIraq continues its expansion. Even as global oil demand continues to grow, supply comfortably meets it.
All this without considering the 38,6 percent probability that Nate Silver (the best survey designer) assigns today to Trump president. Trump has an extraordinarily aggressive energy agenda. He wants to make the United States totally independent and a net exporter. This is why he intends to deregulate the sector, authorize blocked pipelines, revive coal, destroyed by Obama.
We remember that, if they wanted to, the United States could pour an immense amount of energy into the world in the form of oil, gas, coal and renewables. Texas alone (see the issue of Limes on newsstands, Texas Il Futuro dell'America) has a greater potential than Saudi Arabia. President Trump could start this process even without congressional approval. To do this, it would be enough for him to overturn Obama's decree on the sector and change the leadership of the EPA, the agency for the environment.
It is now true that the US energy industry is privately owned and therefore programmed for profit and not for production expansion. But it is also true that Trump's policy would greatly reduce production costs, allowing American companies to remain profitable (or even to increase profits) even in the presence of lower prices.
Since Texan oil already has extraction costs comparable to Saudi or Iraqi ones today, the effect on non-American producers would be significant. Also from this point of view, therefore, Trump is not yet priced by the market. For the rest little to report. The world is at a standstill waiting for November 8th he stock exchanges and foreign exchange are still in their trading range, while the desire for returns at (almost) all costs has returned to bonds.
From November 9, however, we will have a 61.4 percent probability (Clinton) that the Fed will begin to remove the dust hidden under the carpet in recent months, put its hand on rates and initiate a correction on the markets. We will also have a 38.6 percent probability (Trump) that much more will happen and that many things, starting with the dollar, will go outside those ranges that today appear unchangeable to us.
The wisdom of the Founding Fathers predicted a three-month interregnum between the vote and the inauguration of the new president. The Trump effect of November 9 could therefore be similar to the Brexit effect of June 24, that is an abrupt correction of a few hours followed by the finding, from someone who takes the trouble to open the window and take a look at the world, that everything out there is exactly as it was the day before. To then be found unprepared again, some time later, when Brexit really arrives or when the Yellen (should it happen) announces her resignation.
