Margonelli: Oil Smuggling: Is It Time To Start Worrying Yet?
I've been waiting in vain for more information on the U.S. companies involved in buying oil smuggled out of Mexico by drug gangs. So far the money tied to U.S. firms is small potatoes. Trammo, a small firm, paid $2.4 million for hot oil, and two even smaller San Antonio firms may have paid $40K and $100K. Who, and where are the big fish? Worldwide, oil smuggling involves a lot of money and players; the people at Havocscope estimate it's worth $7.7 billion a year, which puts it well below cigarette smuggling ($50 billion) and above music piracy ($4.5 billion). See the full list here. Should we worry?
The WSJ suggests that this is a symptom of cartels fighting as enforcement shrinks the drug pie, while an industry expert wonders if Mexico will go the Nigeria route, which raises the scary possibility that successfully reducing drug trafficking could create even more instability in Mexico and in U.S. petroleum markets...
