05.07.2009
A natural underground reservoir containing an accumulation of petroleum.
The principle that countries should in some way compensate others for the effects of pollution that they (or their citizens) generate or have generated
Multinational enterprises and banks face a number of risks when conducting business overseas. Some of these risks can be removed or mitigated by conducting due diligence on the parties involved and on the economic viability of the proposed business. Other risks are harder for investors or lenders to predict. These include some commercial risks and, non-commercial – or political – risks. Political risk insurance (PRI) is a tool for businesses to mitigate and manage risks arising from the adverse actions – or inactions – of governments. As a risk mitigation tool, PRI helps provide a more stable environment for investments into developing countries, and to unlock better access to finance
Oil was the number one political risk in 2008, followed by the Middle East (no. 2 political risk). Part of this was caused by tight market fundamentals that eroded spare oil production capacity, leaving the market without a buffer in the event of disruption which made oil markets much more vulnerable to price shocks. The countries that are most affected by the geopolitics of oil include the major importers (US, Europe, China, Japan) and the exporters (Saudi Arabia, OPEC, FSU, West Africa). Examples of oil and politics include: 2007- Russia/Belarus; 2008 – Russia/Georgia, disruptions in Nigeria; Terrorism; Iran that has threatened to block the 17m b/d Strait of Hormuz, through which 90% of Persian Gulf Exports flow; might Iran hit Iraqi oil production; the whole Middle East is cause for concern. Speculators and oil price: The 2007-08 price actions suggest speculators believed geopolitical risks had risen