Editorial: A Coin Toss Away From Peril or Prosperity
"Peace and justice are two sides of the same coin." Dwight D. Eisenhower (1890 – 1969)
The oil markets will this week be dominated by news from two of the world’s biggest oil producing nations. On the shores of Lake Geneva, representatives from seven nations thrash out the final details of an agreement that will decide the development prospects for the Islamic Republic of Iran. Four thousand miles away from the Olympic Capital, in the Nigerian capital, Abuja, the results of the hotly-contested general election are coming to light.
After years of being out in the cold, Iran has come to the bargaining table over its nuclear programme with a real chance of setting putting its feet up at the hearth and home of the international community. Should negotiations yield fruit and relations thaw by midnight in Switzerland, the possibility of the Islamic Republic beginning to undo years of punitive sanctions is firmly on the cards.
Such a rapprochement could allow the world’s sixth largest oil producer to inject a million barrels per day (bpd) of crude into the marketplace over the space of the next year – although half a million bpd is a more realistic estimate. With oil inventories across the world at record highs, this deluge could well act to further exacerbate price lows in an already inundated market.
In Nigeria, political machinations may manifest in the inverse. At time of writing, exit poles and early counts in Africa’s largest oil-producing state have given ex-military ruler, Muhammadu Buhari, a narrow lead over incumbent President, Goodluck Jonathan. The continent’s most populous country, Nigeria produces a little less than three per cent of the world’s global daily crude output, and sits just outside the world’s top ten oil-producing nations.
A slender margin of victory for either candidate will doubtless engender legal proceedings and possibly spill over into civil unrest in a nation rent by sectarian division. Unlike the menace presented by Islamist militant group, Boko Haram, which operates in the North of the country away from the oil-rich Niger Delta, the potentiality for countrywide turmoil is a clear threat to the oil and gas sector.
Although peace and justice may be the obverse and reverse of the same coin, many a gambling man would be uneasy betting on 50/50 odds….
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