A Pipeline Runs Through ItIssue: Nov-Dec 2007
IN THE early 18th century, the great Enlightenment philosopher Baron de Montesquieu pointed out that producers of manufactured goods possess a distinct trade advantage over producers of raw materials. The oil crisis of 1973, however, showed that this is not always true. Recent events underline that fact, the political consequences of which have yet to be fully considered.
Eight years ago the price of oil dropped to $14 a barrel. This turned out to be the best time to buy. A bull market in commodities was under way, and Russia was-and remains-a leading beneficiary. As a resurgent power, Russia may wield its newest and powerful weapon-a growing natural resource monopoly.