Still, recently my logic in relation to the energy sector was rather conservative and, I confess, a little guarded. I assumed that as soon as the guns fall silent in the Middle East and a peace agreement is signed, oil quotes inevitably will collapse. It seemed completely obvious that the market, delivered from the geopolitical premium, would quickly remember the fundamental surplus of supply, which pressed on prices before the beginning of the escalation. The logic dictated a simple conclusion. The end of war means the return of cheap oil.
However, right now I cardinally revise my view on this market. Watching as the events unfold in the Persian Gulf, I came to the conclusion that we became witnesses not simply of a regular regional conflict but of a fundamental shift in the perception of global energy security.
The illusion of invulnerability is destroyed. Suddenly the whole world — from governments to the largest corporations — realized, how fragile the supply chain, on which depends the survival of their economies, appears. This vulnerability no longer appears as a theoretical calculation from academic reports. It became tangible.
That is why I consider that a catastrophic collapse of prices on oil will not occur even in the case of the most positive outcome of peace negotiations. The market steps into a new phase, where the fear of a deficit will dictate the rules of the game, and oil companies, capable of providing stability in an unstable world, acquire a special, premium value. In the search for such a reliable haven for capital, I found an asset that looks incredibly attractive.
To understand why prices will not return to former minimums, it is needed to soberly value the physical reality of
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