Rachel’s note: In retaliation for Russia’s invasion of Ukraine, the U.S. and its allies began unplugging Russian banks and businesses from the global financial system. And it sent international crude oil prices past the $100 mark for the first time since 2014.
For more on what this means, we’re sharing a conversation between our very own renowned speculator, professional geologist, and natural resource entrepreneur Dave Forest and Chris Lowe, editor-at-large at The Daily Cut.
Dave’s been closely tracking recent developments in the oil market. And Dave says $100 oil is just the beginning… but really, it’ll accelerate the trillion-dollar electric vehicle (EV) trend.
And tonight, at 8 p.m. ET, he’s hosting a Summit all about it. Make sure you sign up to attend right here.
Then read on below to get the latest on how Russia’s war with Ukraine… the energy crisis… and global sanctions will accelerate the EV trend.
Q&A With David Forest, editor, Strategic Trader
Chris Lowe: Russia pumps 10% of the world’s oil. Following the news that the West is freezing Russian banks out of the financial system, crude oil prices broke past the $100 mark. What’s next for the oil market?
Dave Forest: Putin has a big card to play – his close ties with Chinese leader Xi Jinping. China is the world’s largest importer of crude oil. This gives Russia a massive market. It could stop exports to the U.S. – perhaps even to the West overall – and divert the oil to China.
That would leave the U.S. reliant on oil cartel OPEC (Organization of the Petroleum Exporting Countries) to make up for the short supply. It’s unlikely that will help. Saudi Arabia – OPEC’s biggest producer – doesn’t have room to pump much more. And there aren’t any other nations that can help much.
So we’ll see further disruptions in the oil market. This will raise prices in the U.S. The $100 oil is just the start.
Chris: Russia doesn’t dominate just global oil markets. It’s also the world’s second-largest natural gas producer. What does the war in Ukraine mean for natural gas prices?
Dave: Natural gas is arguably more important than oil. We use crude oil mostly for transport. We use natural gas to generate about 24% of electricity worldwide. We also use it to heat our homes.
And we need it for fertilizer production… which we need for crops. A key ingredient in fertilizer is ammonia. Making ammonia is energy-intensive. It’s a by-product of natural gas.
Europe is already facing a natural gas crisis. In some countries, gas hit $40 per million BTU (British Thermal Units). For comparison, North American prices are about $5 per BTU.
That’s mostly due to poor planning. Europe went all in on renewable energy. It turns out the sun doesn’t always shine, and the wind doesn’t always blow. That’s left the continent with severe shortages.
Putin is aware of this. He’s threatened to use Russia’s natural gas as a weapon against his enemies. Russia has turned off the taps to pinch countries it disagreed with in the past.
This gets scary fast. There isn’t much room for European gas prices to rise. Industries are already shutting down as a result. High-energy sectors such as aluminum and steel took a huge hit.
Utilities are failing and going broke. If Russia makes things worse, it’ll be ugly.
Chris: Inflation is at a 40-year high in the U.S. What do higher energy prices mean for that?
Dave: Inflation will keep rising. Across Europe, inflation rates have run red hot lately. Some countries saw triple-digit inflation rates in recent months.
That’s mostly due to energy prices. With oil – and more important, natural gas – soaring, everything is getting more expensive. And not just in Europe. Energy is the key input in making, transporting, and distributing almost everything we live on.
This is a huge concern. If prices rise further, the fabric of society will come apart.
This is another ace up Putin’s sleeve. He wants Europe, the U.S., and other Western democracies in chaos. It distracts us from fighting against him.
Chris: The West’s reliance on oil and gas is one of its biggest geopolitical weaknesses. What does this mean for the energy transition away from fossil fuels you’ve been writing about?
Dave: Today’s energy crunch certainly played into Ukraine’s invasion. Putin knows he has a leg up – as I’ve been saying, in oil and gas.
Russia came out of nowhere in the last 20 years to dominate the crude oil market. Today, it’s arguably a more important producer than OPEC.
America had a chance to get ahead. For a time, the U.S. was the biggest petroleum liquids producer in the world.
But the Biden administration went to war with oil producers to fight climate change. That’s stifled American output and made us rely on the rest of the world.
In December, reports emerged that the administration held secret calls with oil companies asking them to pump more. But the companies can’t. Russia sees America’s energy distress as the perfect time to pounce.
The only answer is to accelerate the move away from oil.
I doubt the West will be able to cut oil demand fast enough to matter. But it’ll try. It’s the only choice to get out from under Putin’s thumb.
That’ll mean big money coming into energy sources other than fossil fuels. This includes power from wind, solar, and nuclear fission.
And it includes the transition from gas-powered cars and trucks to EVs. The U.S. government’s already pledging billions of dollars to this transition. Now it’ll be even more.
Chris: I know the EV boom is front and center on your radar. What’s the best way to profit?
Dave: Right now, I’m focusing on what I call “hard tech.” It’s a mix of hard assets and technology – two of the biggest trends in the world.
All the money pouring into the economy from government stimulus has its pluses and minuses. A plus is that it targets certain sectors. One of the big ones is EVs.
They’re getting billions, even trillions of dollars in government stimulus.
With the hard assets related to the EV boom… that’s a dynamite combination.
That’s why I’ve been looking at battery metals. These metals – including lithium, nickel, and cobalt – go into the rechargeable batteries that feed the EV revolution. They’re the ground floor of the EV trend.
Paid-up readers of my International Speculator advisory have already had the chance to close out gains of 158%… 277%… and 997% on lithium mining stocks I’ve recommended.
And in these pages, I’ve recommended the Global X Lithium & Battery Tech ETF (LIT). It’s up 133% since I first recommended it here. And it still has a long way to climb.
Copper is also critical. To some degree, it goes in rechargeable batteries. But more so in the wiring. The average EV needs about 186 pounds of copper to make all the wiring that brings electricity around the car.
And copper wiring for electricity is related to most new energy generation. This is another sector that’s opening up with EVs. It covers power generation, microgrids, renewable power, and power management. Copper is the key to all of those.
I just bought a copper mine in Ireland. And I’ll look at redeveloping it as a potential source for EV metals.
But you don’t need to buy a mine… You can play higher copper prices with something like the iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC). It tracks global copper prices.
That only scratches the surface of the EV boom opportunity. I’ve also handed my readers the chance to close out shares of EV charging station maker Blink Charging (BLNK) for a gain of 2,805% at my Strategic Trader advisory.
That’s why I’ve called the EV boom the next universe of profits. There are so many different ways to grow your wealth.
There’s also EV safety equipment… next-generation electricity grids to handle all the juice EVs need… advertising opportunities at EV hubs… even specialty insurance…
There’s so much to cover that I’m planning a series of webinars about the opportunities ahead.
The first kicks off tonight at 8 p.m. ET. I recommend all of our readers tune in by reserving a free spot here.
I’ll show why – whether you’re a billionaire, retiree, or new investor – this is a play for the ages that you can’t afford to miss out on. I’ll even share details of a $3 play on EVs that I believe could give you 49 years of gains over the next 12 months.
Chris: Thanks, Dave.
Dave: You’re welcome, Chris. Anytime.