Today’s briefing:
— Is oil’s centre of gravity shifting?
— We knew they were CIA
— Bipartisan intrigue
Good morning {{first_name | Intriguer}}. While Cuba has dominated our recent Caribbean coverage, we’re looking at two other local storms brewing today, and that’s more than enough to send me way down memory lane back to…
Truck-speakers cranking Carnival soca through Brian Lara Avenue
Eating doubles (Trinidad’s epic street food) until my guts file a complaint
Feeling like a British-dad-at-a-wedding trying to dance bachata in the DR, or
Gawking at an absurd tax-haven mansion (with private pub and kitchen waterslide) while finance bros assure me it’s all about tax-neutral, not tax-free.
It’s an amazing and intriguing region that’s worth your time, now more than ever as it finds itself at the centre of speculation that oil’s centre of gravity could shift West.
Number of the day
$25B
That’s how much the Iran war has cost the US so far, according to a Pentagon official.
Oil be watching you.
With oil prices now at their highest since 2022, it might be hard to shift your gaze to the Caribbean, but it’s now home to two brewing storms that are worth your attention:
First, there’s the regional uproar after Venezuela’s Delcy Rodríguez pointedly wore a pin while in Barbados, asserting Venezuela’s claims over Guyana’s oil-rich Essequibo region.
And second, the International Court of Justice (ICJ) actually kicks off its public hearings for that big Venezuela v Guyana court case this Monday (aka Star Wars day, May the 4th).
It’s a fascinating case around an 1899 case between two entities that no longer even exist (Colony of British Guiana, United States of Venezuela), but the reason we bring both oil-linked headlines to your attention is to ask: is oil’s centre of gravity shifting west?
There are four main reasons to suspect yes, starting with…
First, there’s no OPEC-style cartel in the Americas — rather, it’s a decentralised group of price-driven oil-producers like the US, Guyana, Brazil and Argentina, who can each freely pump as much oil as their prices and pipes permit. Amid rising oil prices, that’s why these sanction-free players have emerged as one of the Iran war’s main beneficiaries.
Second, there’s a prodigal son returning (even if by force), as a conga-line of US oil executives shuffles through Venezuela to crunch the ROI on how much investment is really needed to finally unleash the world’s largest oil and gas reserves. Speaking of which…
Third, there’s massive new supply coming online, whether you look at Guyana’s offshore Stabroek (targeting 1.2mbpd by 2027), Brazil’s pre-salt fields (growing another 200kmbpd this year), or Argentina’s Vaca Muerta (targetting 1mbpd this year and climbing).
And fourth… there’s the raw geographic and political edge — these oil-producers can reach the world’s three largest buyers (Asia, USA, Europe) either directly across the Atlantic and Pacific, or (worst case) via the Panama Canal. No Hormuz or theocrats, and we’re mostly talking about relative stability, security, and the rule-of-law.
Sounds solid, right? The region already accounts for ~30% of the world’s oil output (up from its mid-2010s low), and is now delivering much of the reliable global supply growth.
But wait ‘till you see the ‘no’ case, starting with…
First, the Middle East still dominates on sheer cost and scale, with decades of investment, optimisation, and sheer market inertia driving costs as low as $3 per barrel in Saudi Arabia — that’s up to a tenth what Guyana faces.
Second, there’s the related fact this region still holds ~90% of the world’s usable spare oil capacity (pre-blockade!), so it’s uniquely placed to both ramp-up output and outlast anyone higher up the cost curve. And…
Third, there’s sheer volume — the MENA region still controls ~half the world’s proven reserves, and somehow keeps finding more, with Saudi Arabia, Iraq, Kuwait, Oman, Libya, and others all announcing new finds in the last year alone (mostly still marginal / early).
So we’re not talking about some sudden takeover, but the shift is real, particularly while so much of the Gulf’s output is still trapped behind Hormuz.
That’s why May the 4th just got a lot more interesting.
Intrigue’s Take
Building on the original TACO acronym (for those arguing Trump Always Chickens Out), we already coined NACHO a few weeks ago: Nasty Aftereffects Coming, Hold On. Now there’s another NACHO doing the rounds: Not A Chance Hormuz Opens.
Our view is both NACHOs are true right now: the first (aftereffects coming) because Hormuz is now delivering the biggest oil supply shock in history, almost double (in % terms) the two 1970s shocks. Even a TACO couldn’t magically un-destroy the region’s fried oil infrastructure, which is why we’ve repeatedly flagged the risk that markets might’ve mispriced this war — a ~1% cut to oil supply typically drives a ~6% spike in prices, and with Brent now back up over $125 after an 8-day tear, that classic rule is holding again.
The second is also true (no Hormuz opening) for the reasons we’ve flagged from day dot — the regime can’t surrender its nuclear-Hormuz leverage, and Trump can’t cede his nuclear-Hormuz demands. So absent regime collapse (there are whispers of divisions), it’s hard to see any imminent end to the blockade-by-cheap-drone status quo.
That means a nice little sugar hit for the Western Hemisphere’s oil producers now selling at higher prices, but the big question is whether it’ll all last long enough to justify the kind of investment necessary to really ramp up the region’s output longer term.
Sound even smarter:
Caribbean regional bloc Caricom has reaffirmed its support for Guyana (a founding 1973 treaty member) in its oil-turf fight with Venezuela at the ICJ.
Today’s briefing is presented by…
PRDs by voice. Bug reports by voice. Ship faster.
Dictate acceptance criteria and reproductions inside Cursor or Warp. Wispr Flow auto-tags file names, preserves syntax, and gives you paste-ready text in seconds. 4x faster than typing.
Meanwhile, elsewhere…
🇫🇷 FRANCE — Emergency signal.
The French economy unexpectedly recorded 0% growth in Q1, while inflation accelerated to 2.5% in April. (Yahoo)
Comment: Numbers come and go, but these figures ring alarm bells because they hint at something we’ve warned about since Hormuz first halted: stagflation. That risk will only firm up as this conflict drags on, but stagflation alone seems unlikely to shape the war’s trajectory unless it hits the US, and it’s not there yet.
🇨🇺 CUBA — Et tu, Beijing?
According to a cybersecurity firm, China recently hacked Cuba’s DC embassy for insights into US-Cuba talks. (Bloomberg $)
Comment: These breathless “country caught spying!” headlines are funny for insiders who know that every country that can spy, does spy: “Next up, dog chases squirrel!” China would have an obvious interest in whether its signals intelligence hub (Cuba) might cut ties. The more interesting question is why we’re reading about this now — the cybersecurity firm behind this news just emerged from stealth so obviously loves the publicity from this kind of scoop, but it’s a narrative that also perfectly suits DC as it tries to drive a wedge between Cuba and its long-time Beijing patrons.
🇷🇺 RUSSIA — Downsized.
Moscow’s annual WWII victory day parade (May 9th) won’t feature any military hardware for the first time in decades. (Guardian)
Comment: In announcing this news, the Kremlin had to choose between blaming a) the risk of Ukrainian drone attacks (in downtown Moscow!), or b) the fact Putin has burnt most of his kit in his failed invasion of Ukraine. Putin went with option a), but either way it hints at the coming blowback, with Ukraine having just nailed another half-dozen major Russian energy sites in a single fortnight. Meanwhile, the Pentagon has finally released $400M in approved Ukraine security assistance after an angry op-ed from Senator McConnell.
🇬🇧 UNITED KINGDOM — Terror attack.
The little-known Iran-linked ‘Islamic Movement of the Companions of the Right Hand’ (named after a Quranic reference to the righteous) has claimed responsibility for another attack targeting Jewish people in Europe, this time via a London stabbing that’s left two men injured. The suspect is in UK custody. (WaPo $)
Comment: The Iran link remains TBC (terrorist groups sometimes claim lone-wolf attacks for notoriety), but it fits the group’s pattern, while the regime’s rush to amplify each claim suggests the IRGC could just be using cutouts to maintain deniability, while trying to divide the Western public and raise the costs of supporting Israel.
🇰🇵 NORTH KOREA — Seriously?
Kim Jong Un has praised North Korean troops who “self-blast” (with grenades) rather than get taken prisoner while backing Putin’s invasion of Ukraine. (BBC)
Comment: It’s Kim’s first official acknowledgement of a grim policy Ukrainian intel has described for months. The regime might see here the strength of its Kim cult, or cunning tactics to curb Ukraine’s intel gains, but it’s also a response to Ukraine’s success dropping Korean-language leaflets to encourage defections.
🇱🇰 SRI LANKA — It didn’t hit your Venmo yet?
Hackers have managed to divert a $2.5M payment Sri Lanka wired to pay off a debt with Australia. A separate $625K payment to the US Postal Service also seems to have now disappeared. (Newswire)
Comment: As cyber fraud increasingly hits governments, we might see this issue suddenly bump higher up the official priority list — and rightly so.
🇲🇽 MEXICO — Delicate topic.
Mexico’s attorney-general has announced a full investigation into the death of two CIA officers following a drug raid in Chihuahua earlier this month. Meanwhile, the US has charged the governor of Mexico’s Sinaloa state over alleged cartel links. (AA)
Comment: Our very own JD (ex-diplomat in Mexico) was among the first to cast doubt on claims that two “US embassy officials” had died in a car crash — that’s a common CIA cover. The CIA secrecy here is not so much the usual cloak-and-dagger, but rather the political sensitivity for Mexico — US intelligence has worked closely with Mexican authorities for decades, but typically with a dash of plausible deniability to protect Mexico’s leaders from any voter blowback. That practice has continued under Trump 2.0, but the political risk is higher given Trump’s local unpopularity.
🇲🇬 MADAGASCAR — J’accuse.
Madagascar’s transitional regime has detained a former French serviceman on suspicion of sabotage, and has expelled a French diplomat for allegedly destabilising the government, an accusation Paris denies. (BBC)
Comment: As a former French colony, Madagascar’s Paris links were already under scrutiny after a French military jet whisked the ex-president away amid last year’s mass protests. The island’s military is aiming to hold elections next year, and a tough-on-France narrative is useful for regime cohesion in the meantime. Its vanilla exports (80% of world supply) have continued amid the turmoil, and it’s lifted a long-running ban on new mining permits in hopes of more investment.
Extra Intrigue
In other worlds…
Tech: China’s tech giants are laying off workers on the DL.
Nature: A German rescue team has loaded a stranded humpback whale onto a submerged barge in an attempt to save it.
Sports: A fifth-tier Spanish football team is debuting a 70-year-old goalkeeper.
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Bill of the day
A take on the Loveland Frogman. Credit: Cryptid Wiki.
Some legislative bills are long, some bills are short, some are popular, and others reviled. But this one? This one’s out there.
Earlier this month, Ohio state representatives submitted a bipartisan bill seeking to establish ‘Loveland Frog’ as the official state cryptid. Legends surrounding the creature, described as being 1.2m (4ft) tall and bipedal, began in 1972 amid reported sightings of a huge frog walking on its hind legs. 🤔
At least it was bipartisan?
Today’s poll
Do you think oil's centre of gravity is shifting West?
Yesterday’s poll: Do you think this is the end of OPEC?
💥 Yes, it's running out of market power (67%)
🛢️ No, OPEC members are still stronger together (31%)
✍️ Other (write in!) (2%)
Your two cents:
💥 M: “The combination of the rise of renewables and the US, as the world’s largest oil consumer, now producing more oil than it needs with the capacity to increase production, the supply demand calculus that allows OPEC to control the market is quickly eroding.”
🛢️ C: “Totum est plus quam summa partium… that hasn't changed.”
✍️ M.S: “Should the market cool and prices drop again, the collective, coordinated bargaining power of a cartel will suddenly seem rather appealing to the current deserters.”