Then, we witnessed the OPEC-Russia deal to cut supplies. At first, the situation looked ironic. OPEC, which had increased production to shut some other producers out, was forced to shut down part of its own capacity instead. But soon, the organization’s move showed some tangible results. Now, the market is looking forward to $80 barrels, while in 2014-2015 oil barrels struggled to reach $30-40 levels.

The efficacy of OPEC’s tactics will still be discussed in textbooks for years to come. But for now, the trends are discernible in letters submitted by oil executives to the shareholders and in this year’s annual reports. Upon reading some of those letters, commentators have detected a subtle, but significant change in tone and word choice from previous years. In previous years, companies that usually highlighted their production growth rates have now played down the word “growth,” especially when it is in the context of growing capital budgets and increased reserves.

This led, to some extent, to changes in the nature of investors in this sector. Now, the presence of what the market calls “activist investors” is more noticeable. In previous years, investors tended to be traditional ones seeking a stable share and hoping to play for the long term. The impact of the turmoil in the market since OPEC’s decision to cap production has led to a sense that there are too many variables for the traditionalists to withstand.

The typical activist investor who is willing to think creatively and out of the box was attracted by a market that looked totally foreign to the traditionalist eye. An activist investor does not focus as much on growth as he does on value. True, value is not isolated from growth on any absolute terms. Yet, the priority for activist investors is actual value and finding parameters for how it will evolve in the shorter run.

One factor that helped change the structure of energy investments in the United States was that this sector was considerably underperforming in the broader market. In other words, it appeared to the eyes of activist investors that energy companies had a latent, underestimated value.

For that reason, activist investors are also called value investors because they are focused on the return of their money. They are telling management teams that they want them to focus on returns and other tangible parameters, not growth. Their prescription is: Spend within available cash flow and reduce the use of unexploited assets as a tool to borrow more money from the market. While they are willing to take risks, they recommend a conservative policy for the companies in which they hold shares. Growth means allocating more resources to the expansion of assets. Value means better cash flow and overall revenues from existing assets.

The value of a company’s proven reserves (oil-in-the-ground reserves) serves as an anchor for what is called intrinsic value. Several companies with quality assets and strong management find their total enterprise value is less than the value of their proven reserves. Price fluctuation is the main culprit for this distortion. Value investors understood that prices will not remain low forever and that they should buy when there is a divorce between estimated value and real value. They will be rewarded for their smart move later. When it becomes less expensive to buy barrels on Wall Street than to drill for it, activist investors take notice.

We mentioned in previous issues that the historical pattern of the U.S. shale sector suggests a wave of consolidations and acquisitions. This is what is expected now by almost all observers in the shale sector. Consolidators and acquisition targets have been identified already by hedge funds seeking to exploit valuation disconnects, gather smaller companies into larger ones on the cheap, and reap the rewards once commodity prices increase. This specific investment tactic will rule the market tomorrow, and will certainly bring some hefty profits to those who jumped on the bandwagon early.

Europe imports almost half its oil from the Gulf. The threat is directed mainly at the region, but the EU will suffer greatly if Iran peruses its aggressive policies. If a global oil shock occurs, all will be affected.

Furthermore, Iran threatens Europe in a direct way. Just last November, atop Iranian general warned that the country could increase its missile range beyond 2,000 kilometers if it feels threatened by Europe. Brig. Gen. Hossein Salami, head of the Islamic Revolutionary Guards Corps (IRGC), said bluntly “If we have kept the range of our missiles to 2,000 kilometers, it’s not due to lack of technology. We are following a strategic doctrine.” Now, the Europeans will start negotiating with a country that threatens them. Can we expect a fair result?

In the oil market, Iran is playing a different game, dividing its tactics into two parallel steps: Resisting the OPEC output deal and stopping prices from increasing to a fair level.

On the first track, Iranian oil exports accelerated to a recent record in April, indicating Tehran is seeking to maximize revenue ahead of the U.S. decision on the nuclear deal. Exports of crude and condensate — a grade of ultra-light crude oil — hit 2.767 million barrels a day last month, according to data from Tanker Trackers. That was an increase from 2.104 million in March.

This is happening while OPEC, through a very costly trajectory, is trying to defend oil prices, including what Iran itself receives from its crude sales. Increasing exports goes against the collective policy of all the members of the organization, including Iran.

On the second track, Iran is doing its best to prevent oil prices from recovering, with an Iranian official even declaring publicly that Iran opposes any price increase in the oil market.

Amir Hossein Zamaninia, deputy oil minister for international and commercial affairs, said in an interview May 6 in Tehran that “a suitable price for crude is $60 to $65 a barrel.” Oil Minister Bijan Namdar Zanganeh said the same day that Iran supports “reasonable” oil prices and is not an advocate of costlier crude.

But why should Zamaninia or Zanganeh to decide what is “suitable” or “reasonable”? A price of $65 per barrel is less than the price of oil in 1973, taking inflation into consideration. Moreover, everybody know that OPEC is fighting a long battle to improve prices. Why should a co-member stab others in the back in such a cheap way? Whom does this interest? Does Iran work for the buyers now? How about the Iranian people’s interest?

It is naïve to suppose that the Iranian regime works for the interest of the Iranian people. Not only does the regime quell by force its people when they try to resist policies, it also adopts policies that give priority to its reckless and costly adventurism at the expense of the wellbeing of ordinary Iranians. Because of Tehran’s official policies, the Iranian rial plunged to a record low against the U.S. dollar in the free market. The dollar was being offered for as much as 75,000 rials, compared to around 65,000 just a few days earlier. The average Iranian citizen suffers so that his rulers can continue their self-serving illusions.

It is high time for Iranians to take a deeper look into where these pipe dreams, threats, and subversions have led their historically strong country.