Written both in my book, Daniel Revisited, and in past posts on this site, Iran will invade and occupy many countries in the Middle East. That is the essence of the Second Signpost. The countries to be occupied will likely include Saudi Arabia, Iraq, the Gulf states like Kuwait, Qatar and the UAE, and parts of Syria, Turkey and Egypt. But by far the biggest impact to the rest of humanity in terms of day-to-day life will be the shutting off of one-quarter of the world’s oil supply.
The Second Signpost includes the second horseman of Revelation 6. The second horseman is given power to allow men to slay one another (Rev. 6:4b) but only in one-quarter of the earth (Rev. 6:8b). But he also is given the distinction among all four horsemen of being given power to take peace from the entire earth (Rev 6:4a), not just one-quarter of the earth. The word used for “peace” is “iraynay” which does not mean absence of war, but peace of mind, and security. That same word is used when Jesus said “peace be with you.” In fact, in almost all instances of iraynay occuring in the New Testament it means peace of mind and not absence of war.
Though there will be a major war limited to the Islamic realm, peace of mind will be taken from the entire earth.
As I wrote in Daniel Revisited in chapter 10, I can think of only one thing that would take peace from the entire earth, given a major war in the Middle East. It’s oil. For centuries Christians reading Revelation 6:4 may have wondered what exactly might take peace from the earth, if it wasn’t war itself. Only in the last sixty years or so has the world become so dependent on that one commodity for everything from transportation, to plastics, paints, fertilizer, and the list goes on and on. And only in the last sixty years or so has fully one quarter of the world’s daily production of oil been located within Iran’s reach. Vulnerable to Iran’s advance are the oilfields in the six major oil producing countries in the region: Saudi Arabia, Iran, Iraq, Kuwait, Qatar, and the UAE. If one quarter of the world’s oil suddenly became unavailable, the price of a barrel of oil could double or triple very quickly because the missing oil would need to be replaced immediately. Those nations that lost their oil supply at the start would bid up the price of oil which comes from other global sources where it is available.
If you have been watching the news involving Iran, you may have caught stories of how that nation has threatened to shut down the Strait of Hormuz. Most of the exported oil from those six listed nations goes through that strait. If the Strait of Hormuz was blocked one-fifth of the world’s oil would be blocked. This is why the Strait of Hormuz is such a big deal. This is why the U.S. Navy has said it will keep the strait open.
But when Iranian forces, per Daniel 8:4, charge out to occupy much of the Middle East they will most likely occupy the oilfields of those six nations. Whether the Strait of Hormuz is kept open or not would then become moot because Iran could stop the oil flow at its source. How long might the oil stop flowing? It would be until the four-nation Confederacy acting in the Third Signpost takes back the oilfields and tries to get the oil flowing again. This could be months or even years.
How might various nations be affected? For the average consumer, the price of just about everything will go up commensurate with the price increase of oil. Those nations which are oil exporters could possibly keep the price of oil down for their own citizens. But for nations as a whole, the affect could be as bad as completely disastrous. Let me explain.
There will be two phases to the coming oil shock. The first phase will be short term. The price move in oil will be immediate, and those nations that have oil imported from the affected Irainan-occupied oilfields will have their imported oil cut immediately. Every major nation has domestic oil stocks that will last for a number of days and weeks. Each nation that had oil coming from the affected fields will scramble to replace that oil during the first several weeks. The problem is that there is no extra oil on a global scale. All oil that is produced and exported from any country is currently being used by another country. This is why oil will skyrocket in price: countries that physically lost their flow of oil will bid up the price of oil that is physically available which other countries are currently using.
The second phase will be long term. If a particular nation, say, Nation A, succeeds in procuring an oil supply at a higher price, where said oil formerly flowed to a different nation, Nation B, it could take months or longer for Nation A’s oil refineries to be “reprogrammed” to process the change in oil. Oil refineries are geared towards the supply they receive in terms of degrees of sweetness of the oil, or kinds of impurities in the oil. Even longer term, drilling could be stepped up in countries like Russia, Canada, Venezuela and Indonesia, or even the U.S., but that will take years to accomplish.
So how might particular countries fare in this oil shock? The chart in this post shows the oil sources of the nations which have the largest economies. These nations use perhaps three-quarters of the world’s oil as it is produced and is available today. The nations are arranged from the left which are most adversely affected, to the right where nations are least affected and perhaps even benefited to some degree. Each column represents 100% of the oil supply of each nation. Red represents the oil that comes from the Iranian-occupied oilfields in the Middle East, and that oil would be physcally cut off immediately. Yellow represents the oil coming from fields outside the affected area, that is imported, but would be up for grabs to the highest bidder. In other words, if a nation with “yellow” oil could not outbid other nations bidding it up, it would lose its “yellow” oil. Green is that oil that is produced domestically. It also is up for grabs in a free market economy and would only be retained by that nation without the price being hiked if the government of that nation passed laws saying that oil produced there stays there. Light blue is the oil that is being exported. With the oil price skyrocketing, oil exporting nations might see a windfall in their trade balance. And don’t think the blue oil can simply replace the demand for the lost red oil, because it is currently being used for the yellow oil which is imported. So let’s briefly look at these individual countries as shown in the chart.
On the far left we have the largest economies of east Asia (with the exception of China): the nations of Japan, South Korea, and Taiwan. These are all the large, industrially developed, free market economies of east Asia. They will be hit hardest. They import all of their oil. Not only will 65% to over 80% of their oil physically and instantly stop flowing, but they will have to bid up to keep what oil they have (in yellow) in addition to trying to replace the oil they lost (in red), which was most of it. What conditions these nations might suffer I cannot even imagine. Industrial output and food distribution may be dramatically impacted. These three nations will have the most to lose if they cannot outbid other nations for oil.
Next is Turkey. It also is highly vulnerable due to its oil sources. Since it will be leading the counter-attack as part of the four-nation Confederacy in the Third Signpost, it will have to act quickly.
Next we have the three largest economies in western Europe. Italy, France and Germany import almost all of their oil, but less than 30% comes from the affected fields. However, almost all of their oil is imported and so almost all of it will be bid up in price. They will be working to merely retain the oil from the sources they already get oil from.
Next to the right are India, China, and South Africa. These nations will lose a quarter of their oil immediately, and bid to keep about one-third. Fortunately for them, they domestially produce 30-45% of their oil. They also may have policies that keep oil cheap for their citizens.
Next is the United States. It will imediately lose 10% of its oil supply. With some light rationing or belt tightening on the part of Americans, the U.S. could almost weather this shortage. However, because the United States has not kept up with domestic production to support its own appetite for oil, half of American’s oil will be raised in price. And in this free market the domestic 40% could be up for grabs for bidding up as well.
Next to the right of the U.S. are Australia, the UK, and Indonesia. They all domestically produce the majority of their oil, but that oil and the oil they receive currently will be bid up in price.
Next is Egypt, the second great nation of the future four-nation Confederacy of the Third Signpost. It produces and uses all of its own oil. This situation will serve it well during the Third Signpost.
Next after Egypt are the major Latin American nations of Argentina, Brazil and Mexico, which all produce their own oil and export the remainder.
Finally there is Canada and Russia. These two nations export most of their oil and are major oil producers. While average citizens might pay a higher price for oil, the governments and economies of these two nations could see a monetary windfall. They might even have the option or will to subsidize the price of gasoline for their citizens to keep their economies going.
I do not write these things lightly. I know what I am suggesting, but the Signpost interpretation of Daniel 7 and 8 and Revelation 6 dictates it. I realize I cannot imagine the incredible pain and anguish many people throughout the world will experience, but this will be the essence and cause of the misery going into the final years before the Tribulation. Nations in east Asia may have most of their oil physically cut off. Europe’s oil will be bid up in price as the east Asian nations try to wrest some of the supply going to Europe, China, India and the U.S.
Many nations will have to put into place heavy rationing. There may even be starvation and social unrest. The three major nations of east Asia could be vulnerable to manipulation by China. The United States, with its dependence on foreign oil, and its dollar’s value dependent on Saudi Arabia and the Gulf states selling all of its oil to the world in american dollars, may be outbid for much of the oil it now receives. My guess is that at the start, between the loss of its red oil, and not being able to afford all of its yellow oil that it now receives, America might be cut to half the oil it normally gets until it can get more production online. Nations like China, Australia and Germany could outbid the United States for oil it now receives, if the dollar suffers.
The only historical model we have for such deep cuts in oil is in Europe doing the Suez Crisis of 1956, when they lost 75% of their oil. But at that time, Europe was not so dependent on oil as it is now, and it only lasted a few months because the United States diverted some of its oil production to Europe. Those of you old enough to remember the oil embargos of 1973 and 1979 in the United States – these may very well seem like a walk in the park compared to what is coming.
Because oil is used for agriculture and just about everything that is made, the price of everything will climb breathtakingly. This is how the red horseman will take peace from the earth.
Categories: Signpost #2: Iran