The Heartland
Control for the world Island
Happy Sunday oilers. If you enjoy this report, please do give it a like, share or comment. It really is appreciated.
In this report: The old battle for the World Island pivotal area, US nuclear subs in the water, farcical gas trade deals and how oil may trade this week.
August book recommendation: The Grand Chessboard: American Primacy and its Geostrategic Imperatives by Zbigniew Brzezinski
View
OPEC+ on Friday announced they are likely to raise production at their Sunday Aug 3rd meeting by 548k bpd in September. This certainly is the continued market share war discussed in my report The Real Game back in April. I believe the market has sold the rumour and will potentially buy the news. The headwind to this is how much the overall market prices in the US economic slowdown from poor NFP data last Friday. As we can only imagine that markets (equities down/ gold and bonds up/ yields down) will continue to price this risk, it will weight heavily on any bull story for energy.
Articles
The Geographical Pivot of History-ESSENTIAL READ
OPEC+ expected to raise oil production further on Sunday
US/EU Gas deal a fantasy-ESSENTIAL READ
Europe's Energy Future Hinges on Global Powers
US labour market cracks widen as job growth hits stall speed
Why is Trump moving nuclear submarines after a spat with Medvedev?
Jeffrey Sachs: Understanding the Ukraine conflict-ESSENTIAL WATCH
Macro
Monday’s Trump chatter had a little spice in it, that ended the week in the deployment of 2 US nuclear submarines. With a back and forth with Russia’s Medvedev saying that US Economic sanctions on Russia would ‘‘be a step towards war’’. Since Russia’s invasion of Ukraine, the world has seemed to think this was a Russian grab for territory, with little thought to the expansion of NATO right onto Russia borders. It is a commonly held perception that NATO provoked the Russian invasion and continue to sustain disarray in shifting European reliance on its neighbour’s Nat Gas to US gas. The destruction of Nord Stream 2? Billions in US support for Ukraine? All resulting in a fantasy deal for $750b of US Nat Gas to be sold to Europe?
So I thought it would be a good idea to look at the real narrative that drives American adventurism and has done for close to 100 years. Control of The World Island.
In 1903, Germany, with a concession from the Ottoman Empire, began construction on the Berlin–Baghdad Railway. This was designed as a strategic overland corridor—an artery for Germany and Western Europe to access the oil-rich Middle East. Trade relations between Berlin and Constantinople were warm, and this was a concerted, effort to counterbalance the dominant global influence of Britain, France and a rising USA. Control of oil, even then, was becoming inseparable from power projection.
The following year, Sir Halford Mackinder—a British geographer and Oxford academic, stood before the Royal Geographical Society and delivered what would become one of the most important geopolitical theories of the 20th century. At the height of the British Empire, when naval dominance was still the uncontested pillar of power, Mackinder warned that the world’s balance was shifting. It wasn’t the oceans that mattered most anymore, but the vast, resource-rich interior of the Eurasian landmass. His thesis, known as the Heartland Theory, laid it out starkly:
“Who rules East Europe commands the Heartland; who rules the Heartland commands the World-Island; who rules the World-Island commands the world.” Sir Halford John Mackinder
At the time, railways were transforming continental connectivity. Russia—with its immense territory and emerging industrial base—was becoming a serious land-based rival to Britain’s maritime empire. Mackinder saw the Berlin Baghdad line as a direct strategic threat. His message: land power was rising, and Britain needed to adapt or risk losing control of the global order. With the breakout of WW1 in 1914, the line was never finished and the outcome was that the German economy got obliterated, with overbearing reparation debts due to Europe and US. The overbearance of these debts on Germany ultimately led to the rise of the Natzi party in Germany.
Fast-forward to 1997, and the echoes of Mackinder re-emerge—refined for the post-Soviet world—through Zbigniew Brzezinski, former U.S. National Security Advisor and one of the most influential American geopolitical strategists of the late 20th century.
In his seminal book, The Grand Chessboard: American Primacy and Its Geostrategic Imperatives, Brzezinski makes the case that the Eurasian landmass remains the central prize in global power politics, just as Mackinder had warned nearly a century earlier. But this time, the language is American, not imperial British.
