$100 oil may look permanent, but what goes up …
Opec's 12 member countries earned about US$1 trillion (Dh3.67tn) from oil last year.
As we sit down to consider the prospects for this year, I resist the looming necessity to open my belt out to the next hole in hopeful anticipation of living up to my new year's resolutions as it strikes me that, unlike a year ago when global economic recovery was the plat du jour, this year already has a feeling of greater austerity.
The convergence of what were once faraway hypotheticals - euro collapse, double-dip recession, Chinese slowdown, drumbeat of conflict around the Strait of Hormuz, peak oil production - are emerging as all too real on the horizon.
Yet the world appears paralysed, watching these slow-motion accidents unravel before its very eyes without access to any reflexes to introduce corrective measures. Perhaps that's what it feels like to be literally on the edge of a cliff with no options.
Analysts are advising investors to prepare for a worst-case scenario. A recent UBS wealth management note to clients warns: "What to buy in case of euro-zone break-up: precious metals, tinned food and small-calibre weapons".
Mohamed El Arian, the Egyptian-American chief executive of Pimco, has applied a somewhat appropriate description to this counter-intuitive period in which we live - the era of the "new normal", in which contradictory forces can coexist: US$100 oil and record corporate profits with record unemployment; frenzied capitalist economics with communist governance; an emerging federalist but somewhat undemocratic Europe.
For us in the Gulf, there is a question as to whether we have moved into a new epoch of triple-digit crude oil prices, allowing countries and companies to plan with some certainty - most Gulf states are increasingly inching their annual budgets closer and closer to $100 oil.
Listening to the dour new year's messages from the "Merkozy" duet, one could be forgiven for projecting that we are destined for another roller coaster ride reminiscent of the 2008-2009 collapse, when oil fell like a rock from $150 to $30 a barrel.
There are certainly strong narratives to support both paths up and down the mountain - demand erosion with recession in the EU and slowdown in China versus limited increase in production capacity with noises of unrest across the Middle East.
Saudi Arabia's better-than-expected budget surplus provides all the positive indicators one would desire for tomorrow's government expenditure - that is if oil can continue to defy gravity and stay propped up out of harm's way high in a tree nest of $100 a barrel.
But it is a brave man who bets against Newton's thesis. Editors scrambled for new metaphors to describe uprisings across the Middle East, the tsunami in Japan and floods in Australia.
As the Lebanese-American economic philosopher Nassim Taleb might say, we have certainly had our fair share of black swans - random unpredictable events that can have a huge impact on our lives - which last year triggered an oil windfall of $100 a barrel across the Gulf.
One side of the brain shouts "long may it last", and at the same time the sober side whispers "be careful what you ask for". Any escalation of tensions in the Strait of Hormuz would be costly for us on this side of the Gulf.
The Dow Jones, FTSE 100 and other stock market indexes, while essentially flat last year, have held their 100 per cent gains since the 2008-2009 crash, and brokers are saying it's "back to the races".
And yet I find it difficult to completely swallow the "new normal", as we are still caught in a supply-demand imbalance of far too many questions and very few answers.
Sean Evers is a managing partner of TheGulfIntelligence.com and the former Middle East bureau chief of Bloomberg News & TV
Updated: January 16, 2012 04:00 AM