Oil, oil, oil. The market in "black gold" makes a mockery of those theories about supply and demand we heard so much of last summer.
Russia is climbing out of its massively over-long winter break (the Russians have a tradition of doing absolutely nothing over the Christmas and New Year break – it is as close as human beings come to hibernation).
Call me a cynic, but I happen to believe that low levels of activity in Russia were part of the political chest-beating exercise that has been the protracted wrangle between Russia and the Ukraine over its oil pipeline.
In crude summary, and at the risk of boring you, "Continental" Europe, as we Brits refer to the gigantic landmass which isn't part of the United Kingdom, gets about 25 per cent of its oil from Russia. Moscow accused the Ukrainians of skimming off some of the oil that passes through its territory on its way to Germany, the Czech Republic, etc. As I write this column, there are signs that the pipeline is about to flow once more.
The Russians' primary objective was to demonstrate who has the power. The pipeline play was the "real politik" of one of the world's most precious commodities. There are two overland routes to the heartland of Europe for European oil (bearing in mind that much of Russia is in Europe) and the Russians control both. So it was convenient and fun to set the agenda and the timetable, and to force much of the rest of Europe to shiver while Russia slumbered.
And what happened to the oil price during this period of scarcity of supply? Precisely nothing. There was no break-out market move, no surge in price as large demand met meagre supply. As I said in my predictions for 2009, I expect oil to trend upwards this year, but it will stay well below $80 per barrel, up from its present position of the low 40s. Oil, like Russia itself, is hibernating – and it will stay that way unless and until there's an unexpected political event or the bulls foregather. A nasty event in a major oil-producing area is more likely than the bulls gaining the upper hand again, I believe. And neither scenario is probable.
Talk of Moscow makes me nostalgic about a little party I attended there some four and a half years ago. On a hot and muggy night (by London standards – I am aware that Dubai does warm weather really rather splendidly) the Waterford Wedgwood company held a huge launch party. There were ice sculptures, wonderful food, including huge trays of caviar, glamorous partygoers, and many Russian football stars in attendance. The pottery and glassware company, chaired by the charismatic Sir Tony O'Reilly (a flying wing on the rugby field for Ireland and the British Lions, for whom he is still the record try-scorer, and of course the first non-US national to be president of the mighty Heinz corporation) was making a big push into the Russian market. There were plenty of historical links between the pottery side and Russian aristocrats. Catherine the Great ordered a massive set of the distinctive blue-and-white dinnerware for her table.
Russia seemed to be pretty well aligned with the interests of "Western" business, and eager to integrate itself into the fast-expanding, increasingly international world economy. Globalism was a good thing, back then.
At the time, O'Reilly said: "Thirty years ago we went to Japan with Wedgwood, and are now the number one brand in Japan. There's great universal aspiration here, fertilised by international television. There's a common ambition. We aim to satisfy some of that."
How times change. Rightly or wrongly globalism is chided for our current woes, and Russia seems to be much more interested in setting President-elect Obama a few foreign-policy problems and demonstrating its strength than anything else.
I find it difficult to believe that two such premium products as Waterford crystal and Wedgwood pottery will not find a buyer. If you believe that there's a future for global capitalism, as I do, it's bargain basement time for whoever has a bit of surplus cash. If it's a Gulf buyer, I promise to come to the launch party, if invited.
- Martin Baker is a journalist, author and commentator on international business affairs