The New Seven Sisters of 21st-Century Oil: Part 2
Ghawar, Burgan, Daqing, Ahvaz, Cantarell, Prudhoe Bay… You know these names well if you’ve had a dime invested in oil at any point over the last hundred years.
There are even a few that’ll have you scratching your head, such as Safaniya, Kashagan, and Samotlor.
These are among a few of the world’s remaining supergiant oil fields.
More importantly, these oil fields gave a select group of state-run companies absolute control over global oil supplies.
When five countries came together in 1960 and formed the Organization of the Petroleum Exporting Countries, they quickly wrested control of the supergiant fields found within their borders and the power dynamic changed forever.
Today, OPEC controls 80% of the world’s reserves and around one-third of global oil output.
I mentioned last week that a few of OPEC’s largest producers joined with other massive state-run national oil companies like Russia’s Gazprom or China’s CNPC to form the new seven sisters of oil.
They’ve been running the show ever since.
Today, we’re witnessing the end of their reign.
The New Seven Sisters of 21st-Century Oil
Soon, those household names will be replaced with ones you’ve probably never heard of before.
Names like Sonora, Thacker Pass, and Atacama.
And just as supergiant oil fields like Ghawar paved the way for Saudi Aramco’s power over global oil markets, these operations have birthed a new elite cabal of companies that will shape the energy landscape for decades to come.
Yet the new seven sisters of the 21st century have been trimmed to four.
Of course, we know their names all too well.
Tianqi, SQM, Jiangxi Ganfeng, and Ablemarle.
Make no mistake, dear reader, these four players don’t just shape the world’s lithium market — they ARE the market!
And as you’ve probably guessed, they don’t extract a single drop of oil.
Instead, they form a lithium oligarchy and even set their own prices.
I’ve told you before that lithium is the 21st-century oil.
To put a little more perspective on the power these four companies wield, just keep in mind that Tianqi’s $4 billion deal to become the second-largest shareholder in SQM gave China direct control of roughly half of the world’s lithium production.
Let that sink in for a minute.
Now consider the fact that global lithium demand is projected to triple to 1.5 million metric tons within the next five years.
This is the nightmare that plagues Elon Musk’s dreams nightly.
And it’s opened up one helluva window of opportunity for individual investors like us.
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Given Musk’s furious criticism in the past regarding the phasing out of critical battery components like lithium and cobalt, it seems that he’s steering Tesla in a completely opposite direction.
Granted, we caught on to Musk’s yearslong hypocrisy.
His incendiary rhetoric and actions toward lithium and cobalt have been a strange case of Dr. Jekyll and Mr. Hyde recently.
At least, that seems to be the situation after we learned that he was building his very own lithium-hydroxide plant in Texas, even inking a lithium deal with Piedmont.
Musk even struck a long-term deal with Glencore to secure Tesla’s future supply of cobalt… after shouting to the heavens on social media that he would eliminate cobalt for his batteries.
Even though the investment herd will scramble for the four major lithium players, perhaps it's time to show you the other door.
You see, it’s not just future EV makers that are desperate to secure their own supply of these critical battery metals.
Back in 2017, President Trump signed Executive Order 13817, which required the secretary of the interior to identify critical minerals that were essential to the economic and national security of the United States.
The results were staggering but not surprising to us.
It turns out the U.S. relies on foreign sources for half of our supply of 31 of the 35 strategic minerals identified.
For 14 of the critical minerals, it turns out we have no national production whatsoever.
On September 30, 2020, President Trump signed a new executive order.
Citing the dire position in which we’ll soon find ourselves, he laid out his plan.
The goal is clear: The United States is on the verge of strengthening its domestic mining and processing operation.
Along with a host of other priorities, whoever is sitting in the Oval Office will receive a report by the secretary of the interior every six months updating the president on the establishment, expansion, and protection of domestic supply chains for strategic minerals.
And it’s created a perfect storm for investors.
I lay out the full details for my readers in this investment report, and as a premium member of Energy and Capital, you have full access to this presentation — at absolutely no cost to you!
Until next time,
A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.
Energy Demand will Increase 58% Over the Next 25 Years
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