2019 has shaped up to be quite the doozie of a year, and we’re barely three quarters of the way through it. As the third quarter grinds to a close, consider what has transpired in the last three months, alone:
- For only the fourth time in U.S. history, a U.S. President is facing a formal impeachment inquiry relating to domestic and international political scandal and possible criminal activity. What will happen to this president? What will happen to the country?
- At the same time, British Conservative Party Leader, Boris Johnson is hanging on for dear life after continuously failing to negotiate the UK’s withdrawal from the European Union (Brexit) and having been found by the Supreme Court to have illegally suspended Parliament. He officially became Prime Minister in July after Theresa May resigned in June over her inability to negotiate a “soft” Brexit deal.
- Earlier this week, a 16 year-old girl from Sweden became the face of climate change, and the voice of her generation, when she scolded world leaders at the U.N. General Assembly in New York for their inadequate efforts to curb climate change. The same week, the U.N. issued another sobering report on the effects that climate change have had on our oceans and arctic regions.
- Geopolitical rivals Iran and Saudi Arabia remain perilously close to major conflict following the former’s attack on the latter’s state-owned and -operated petrochemical company, Saudi Aramco, taking down roughly half of the Kingdom’s oil production (full production was restored a couple of days ago). This is in the context of a proxy war fought by Iran and Saudi Arabia in war-torn Yemen and Syria that has on numerous occasions held critical Saudi infrastructure at risk by long-range missile and drone strikes.
- This conflict has also brought the U.S. to the brink of war with Iran on at least two occasions — most recently, after the attack on Saudi Aramco’s production facilities, and following the downing of a U.S Navy surveillance drone over the Strait of Hormuz. In response, the U.S. Government has slapped extra sanctions on the Islamic Republic and is deploying further air and missile defense forces to the Kingdom.
- The trade war between the U.S. and China continues, with each country increasing the scale and severity of tariffs they place on the other. Chinese buyers of U.S. agricultural products have also shifted sourcing from the U.S. to other markets, and have inflicted heavy and mounting losses on American farmers. While Chinese and U.S. leaders continue to negotiate an end to the impasse, the U.S. Government’s response has been in part to provide $28 billion in aid/subsidies to U.S. farmers, hoping to offset some of their losses.
- In August, the yield on 10-year U.S. Treasury notes dipped below that of two-year bonds, flashing a sign of a coming recession, and prompting a worldwide market sell off. The Dow, Nasdaq, and S&P markets erased all their gains for 2019 and sent many a retiring Baby Boomer (and Gen Xers and Millennials, like myself) into a renewed sense of economic uncertainty. But the dip was short and the markets recouped their losses. A month later, the U.S. Federal Reserve lowered interest rates a quarter percent to juice consumer spending and further ease market worries of another recession.
- Throughout July, Iran seized a number of British, Liberian, and Panamanian-flagged oil tankers in the Persian Gulf, while British Royal Marines seized a tanker off the coast of Gibraltar suspected of carrying illegal Iranian crude oil to Syria. Also in July, U.S. Marines deployed aboard the USS Boxer downed an Iranian surveillance drone that had come within 1000 yards of the vessel, further inflaming tensions in the Gulf. These incidents follow other incidents in June in which Iranian operatives were shown to have placed limpet mines on tankers operating near the strategically important Strait of Hormuz.
My goodness, the last quarter has been one helluva year (I know, I know…that’s the joke…get it?). And these are just some of the major international news headlines that have global business repercussions. So what are the main takeaways?
In a nutshell, we’re living in tumultuous, uncertain, and in some ways, unprecedented times. There’s a lot of angst and fear in the global business world — and not just for those in the oil & gas and shipping & logistics industries. Domestic political scandals, scary economic indicators, and never-ending wars in the Middle East can keep anyone up at night (self included). So what are we to do?
I don’t have all the answers, but for starters, I’d implore you to take a break from cable news and social media (these are hard ones, I know firsthand) and to consult the experts rather than the Twitterverse. So, take a deep breath, keep your powder dry, and trust the process. Cooler heads will prevail…they have so far.
P.S. A couple of these sub-topics, “supply chain sustainability” and “procurement with a purpose,” will be presented in detail at Ardent’s CPO Rising 2019 procurement executive summit in Boston next month. Catch presentations by Chief Procurement Officers who manage these issues every day. Click below to learn more and register!
