The World’s Next Monster Energy Play
The unrest in Egypt continues to grow by the day since President Mohamed Morsi was ousted from power on July 3, 2013. Cairo has essentially become a war zone, as protestors supporting the deposed president and the Muslim Brotherhood clash against security forces backed by the military. In one of the worst days of violence since the Arab Spring, at least 638 Egyptians died on August 14, when the security forces broke up the protestors' camps. With the Egyptian police now authorized to use live ammunition in order to repel the protestors, there will surely be more violence in the days ahead.
To make matters even worse, there have been rumors that Hosni Mubarak might be released within days. For those who do not remember, Mubarak was one of the leaders who were thrown out during the middle of the Arab Spring. Given that Mubarak ruled over Egypt for decades and has made plenty of enemies, freeing Mubarak without any charges will only add to the tensions in Egypt. If things deteriorate from here, it is not completely unthinkable that Egypt could descend into a full-blown civil war.
What would an Egyptian civil war entail?
Egypt controls one of the world's most important waterways: the Suez Canal. Without the canal, all oceangoing traffic between Europe and Asia would have to go around Africa and the Cape of Good Hope. The Suez Canal shortcut cuts down an average trip from London to the Persian Gulf by 43% (almost 9,000 km). If an Egyptian civil war were to become so severe that the canal is impeded, you can be sure that shipping costs from the Persian Gulf will skyrocket overnight.
And what is the biggest product in the region? Oil.
It is also important to note that Egypt is one of the most important political and cultural centers in the Arab world. The Muslim Brotherhood, for example, originated in Egypt. An Egypt mired in a civil war would likely have spillover effects to the other nations in the region. If the military goes too far in stamping out the Muslim Brotherhood, an Islamist backlash could easily spread all throughout the Persian Gulf, stirring up Islamist revolts in various countries. Countries that could be affected include Bahrain, Qatar, and most important, Saudi Arabia.
What commodity will shoot to the moon as soon as there is a hint of an Islamic Revolution in Saudi Arabia? Oil.
So as the situation in Egypt continues to worsen, it is logical that investors want to be investing in oil. But not just any oil... we want to invest in oil that is readily accessible, secure, and does not need to be shipped all the way across the world.
Where is that kind of oil to be found?
We believe that we have found a company that is on the verge of discovering one of the largest oil plays in the world—the next Bakken, so to speak. The story is so secret and so promising, in fact, that the company's lawyers refused to give us a site trip and imposed a communications blackout on the current drill program. You can read a little more about the opportunity under "The World's Next Monster Energy Play?". But if you want to know the name of this company, you have to be a Casey Energy Report subscriber before the company's news comes out on or about Monday, September 16. When the news breaks, all of our Casey Energy Report subscribers will receive an alert with our analysis on what we believe to be the most exciting energy play that we have seen in years.
So if you want to get behind the real winner in the Egyptian crisis and make some serious money from the inevitable bull market in oil, don't delay: become a Casey Energy Report subscriber today and get ready to get in on the opportunity of a lifetime.
Additional Links And Reads
China's First Private LNG Bunkering Project Approved (SinoShip News)
While it is no surprise that China is looking to increase its natural-gas consumption and wean off of coal, where China will look to for its liquefied natural gas (LNG) is still very much up in the air. Canada's LNG progression has been very slow, but news of securing contracts gives projects the ability to raise funds for the eventual construction. With Canada in the mix, the LNG markets become even more competitive.
Vietnam to Build Nuclear Center in Late 2015 (Global Times)
Vietnam joins the countries looking to add nuclear energy to the energy mix. Construction is set to begin in two years; the Vietnamese government has approved plans to put five plants in operation between 2020-2030. It is really no surprise that Russia is helping with the construction, lending $500 million for the construction of the first plant.
Buffett Buys in to Canadian Energy Sector (Globe and Mail)
The Canadian oil sands are a very hot play, with even the renewable energy enthusiast Warren Buffett realizing that the fundamentals are just too good to ignore. Oil sands companies are trading at a steep discount to their American counterparts, something we expect to narrow as transportation capacity increases. While the time horizon might be long, as Buffett put it best, sometimes the best time frame is forever.