Putting our money where our mouths are, we both agreed to bet 100 ounces of silver on the matter.

I have a lot of respect for Porter, who is a very smart man. When he talks, I listen. But when he discussed the reasons why he thought oil was going below US$40 per barrel, I knew I had him - this was going to be one of the easiest bets I have ever made.

One of Porter's main arguments was that a global shale-oil revolution would push volume way up and prices way down. It is definitely a sensible argument, yet it was missing something very critical: timing.

The shale gas boom that happened in the United States did not occur in a vacuum. Rather, it was built upon decades of experience in new technologies such as hydraulic fracturing and horizontal drilling. This was then based off of more than 150 years in conventional oil and gas exploration. Today in North America, there are thousands of rigs and hundreds of thousands of skilled oil and gas workers to work on the projects.

This simply does not exist in the rest of the world.

For a new shale discovery - however large it may be - it would take years just to prove up its commercial viability, another few years to get the infrastructure running, and even more years before it produces enough to matter.

This means there are tremendous opportunities to profit - for those who are in the know - while we wait for the rest of the world to catch up.

A similar situation is shaping up in the nuclear sector. Many countries rely on nuclear power and are planning to expand its use - the US among them - yet companies involved in the mining and refinement of uranium remain in a slump. We at Casey Research have created a webinar discussing these issues; it's titled The Myth of American Energy Independence: Is Nuclear the Ultimate Contrarian Investment?, and it will premier May 21 at 2 p.m. EDT.

Featured participants include Chairman Emeritus of the UK Atomic Energy Authority Barbara Thomas Judge, former US Energy Secretary Spencer Abraham, and former Canadian Minister of Natural Resources Herb Dhaliwal. We will provide an expert, insider's perspective on the global nuclear power scene, showing you how to leverage its rising importance in your portfolio for potentially life-changing gains. Learn more about the free webinar and reserve your place today.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The Energy Report: Marin, in your recent 2013 Energy Forecast, you wrote that the earth is running out of accessible supplies of oil, uranium, coal, metals and virtually every other resource-with the emphasis on "accessible." What does the loss of accessible energy resources mean for the margins of companies pulling the oil, gas and uranium out of the ground?

Marin Katusa: Let's start with oil and gas in North America. Unconventional production is becoming the new norm. This is a paradigm shift in domestic oil and gas production and a direct result of limited accessible resources and new technologies making once uneconomic resources economic. Another example I touch on in the special report is the move to deeper offshore wells. Look at the BP Plc (BP:NYSE; BP:LSE) 2010 oil spill in the Gulf of Mexico. If it had extracted every drop of oil from the Macondo prospect, it would not have satisfied the world's oil demand for one day. That gives you an insight into what the western world must do to satisfy its oil demand.

Another example: Companies with warm in-situ recovery (WISR) production are making good margins in the U.S. Investors looking for exposure to U.S. uranium should look towards WISR uranium production, which has better margins than traditional ISR and conventional production in the rest of the U.S. This is another item that we mention in the 2013 Energy Forecast that has never been mentioned anywhere in the analyst community. Eventually, companies have to pass the price on to the consumer, which indicates higher energy costs for consumers.

TER: Are consumers willing to pay for the cost of these unconventional methods, or do companies have to do more with less, thus leading to trouble with financing?

MK: It doesn't matter if you are Warren Buffett, Rick Rule or Doug Casey, the common trait of these three investing legends is investing in great people. Great people find great projects, and the smart money follows the smart people. Financing is a problem for most junior exploration and production (E&P) companies, as they rarely produce profits initially. The major producers, such as Exxon Mobil Corp. (XOM:NYSE), BP or Royal Dutch Shell Plc (RDS.A:NYSE; RDS.B:NYSE) can find financing. Then you have a large category in the middle that seeks offtake agreements, debt and equity financings.

For example, companies in the Western Canadian Sedimentary Basin are trying to attract capital by promising yield to their shareholders. Many of these small public producing companies produce less than 10,000 barrels of oil equivalent per day. The companies are paid a discount to the West Texas Intermediate (WTI) and to the Henry Hub, so there is very little room for error and the profit margins are very tight. But they are tapping into the greed factor in the current yield-chasing market. By paying a yield, these companies are attracting investors who normally do not understand or invest in the sector, nor do they understand the inherent risks associated with such companies. We advise investors to be very careful, as the margins are so tight that management has no room for error. Once something does go wrong, which it will, investors in many of these companies will experience a portfolio meltdown. We are much more excited about regions that are paying a premium to WTI and Henry Hub pricing, which we call energy-hungry regions.

TER: Where are those energy-hungry regions?

MK: Europe. In certain parts of Europe, consumers are paying the Middle East and Russia over twice the price of natural gas in North America. It's the unconventional technologies that have lowered energy prices in North America, and these European regions have not experienced the energy renaissance yet, but they soon will. Some companies in Europe are making great margins at current prices. The Albanian government, for example, is signing offtake agreements with local producers at more than $8.50 per thousand cubic feet ($8.50/Mcf). The same gas is selling for $2.50/Mcf in Alberta. Investors who target the right companies could profit from higher oil and gas prices. The same situation is going on right now for oil in Germany, which has infrastructure, proven reserves and similar geology to Alberta, and yet the companies in Germany are making over 200% more for the same commodity as companies in North America, with similar production costs.

The hottest area in the world right now for oil exploration is the East African Rift, where it costs north of $50-60 million ($50-60M) to drill an exploration well. Casey Energy Report was the first to recommend Africa Oil Corp. (AOI:TSX.V) and to do a fundamental research report on the potential of not just Africa Oil but the region in general. Developing these resources in East Africa is a multi-billion dollar proposition. China, which is expanding its own domestic production, is also investing billions into the region because China wants secure, long-term offtake arrangements to satisfy its growing oil demand.

TER: Venezuela is using oil revenues to pay for social programs rather than investing in oil infrastructure. As a result, production is shrinking year-over-year. What will change with the death of Hugo Chavez?

MK: Nothing will change in the near term. Venezuela subsidized social programs and local demand for oil and energy using the revenues it once made selling its oil to the U.S. Now, the government cannot take away those subsidies for social programs, and although it already has one of the lowest gasoline prices in the world, it cannot raise prices without risking civil unrest. The only way out is to charge higher prices for the oil it exports. Already, Americans pay almost 100% more for Venezuelan oil than for Canadian oil. Chavez's last laugh is that Americans are paying twice the price to Venezuela than they are to their friendly neighbors to the north.

That will not change in the near-term. For the next couple of years, the main agenda of politicians in Venezuela will be to keep the peace, to keep things moving along. Eventually they will have to attract foreign capital and expertise to expand the resource and produce more oil. Until that happens, nothing will change.

What will change, on the American side, is more pipeline infrastructure development to increase access to less-expensive Canadian oil. That will happen with Keystone XL. Until then, Venezuela will remain the fourth-largest provider of oil to the U.S., and the U.S. will be paying a premium for Venezuelan oil.

TER: In a recent Casey Daily Dispatch, you predicted the Keystone pipeline will be built, but that the U.S. government will impose a "maple leaf oil carbon levy," creating a permanent differential for Canadian oil. What will that mean for companies working in the Canadian oil sands?

MK: Until pipeline infrastructure is built out to the west so the Enbridge Energy Partners L.P. (EEP:NYSE) pipeline can make Canadian heavy oil accessible to Asia, Americans will always get Canadian oil at a differential to WTI.

There will be a tax of some form on the "dirty" Canadian oil, which we'd like to remind Greenpeace is ethical oil, and of the highest global standards, unlike the bloody oil or unethical oil coming from some other parts of the world to the U.S. The Canadian oil sands are home to some of the largest projects in the world, run by some of the largest companies, using top technology regarding both environmental and safety standards.

That said, President Obama will use this situation to satisfy the environmentalists who support him by bringing in some form of levy, which will satisfy NAFTA agreements. The end result will be a discount for the oil sands producers. That is the opportunity. Investors need to identify their favorite oil sand producer and be patient, as eventually this will change. Remember, even though the situation is hopeless, it's not serious. In other words, there is a way we can profit from it.

TER: When we interviewed Porter Stansberry, he was encouraging the idea of American energy independence. Do you think that could happen?

MK: Porter is a good friend and a great speaker. Actually, if you ever get a chance to hang out with Porter, do. He is one of the most entertaining people I have ever met. He is smart, fun and fascinating. Porter and I have a bet going on right now. I took his money in a poker tournament with Doug, I beat him in golf and I will yet again take his money on this bet.

Porter said oil would be below $40/bbl by the beginning of May 2013. I think that is complete nonsense. We bet 100 ounces of silver. He wins if oil is at or below $40/bbl, and I win if it never touches or goes below $40/bbl.

I think it is in the best interest of the U.S. to become energy self-sufficient, but in the March Casey Energy Report, we identify all of the factual errors in the International Energy Agency report that states the U.S. will be on its way to becoming energy independent. The March issue of the Casey Energy Report is a must-read for anyone interested in investing in energy.

TER: Which oil-and-gas companies could benefit from increase in the prices of oil and gas?

MK: Our paid subscribers pay for that info, and I can't give it away for free here, but I encourage all to take us up on our trial challenge. As I mentioned earlier, we were the first to discuss Africa Oil Corp. We recommended it at under $1 per share. We made a good gain on that one and it has gone even higher since then. I can't emphasize enough how important people are when it comes to investing. With the right people, you will have the right share structure, the right cash in the bank, the right projects. If the management team is not significantly invested in its own company, you probably do not want to be invested in it either. In our reports, investors will learn more about the Casey 8 Ps in successful investing.

TER: You said that you probably would not invest in companies that cannot make money at current fuel prices. How does this theory apply in this uranium space, where spot prices are around what you called a low of $40 per pound?

MK: The uranium sector is the no-brainer of the energy sector right now. It's the perfect contrarian bet. It is the most unloved sector of the energy world and conventional producers cannot make a profit at current prices. That is a fantastic situation for investors with a longer-term time horizon.

In 1960, the U.S. led the world in uranium production at more than 36 million pounds (36 Mlb). In 2012, it produced just under 3.5 Mlb. There is an opportunity for the U.S. to increase its uranium production and become independent of Russian nuclear fuel. About one in every 10 houses in the U.S. is fueled by Russian uranium, an ironic result of the Cold War.

You want to invest in companies that can make money using new technologies, such as WISR production. As the price of uranium moves higher, their margins increase significantly. One company that has been in our ten-bagger club is Uranium Energy Corp. (UEC:NYSE.MKT). The company is run by smart people, who have actually done what they said they would. CEO Amir Adnani has put together a great team of people, such as Harry Anthony, who knows ISR production. This U.S.-listed company is a low-cost producer, and makes money at current market prices.

As for explorers, we had a great win with Fission Energy Corp. (FIS:TSX.V; FSSIF:OTCQX). It has the right management team that made not one, but two major discoveries. That doesn't happen by luck; that happens by the right people doing the right exploration, and investors have had +100% gains with Fission. If you want to invest in high-risk juniors, the Athabasca Basin is the king of all uranium basins. It has the highest-grade uranium in the world, but drilling there is very expensive, so make sure you invest in management teams that know what they're doing. Remember, it's all about the people.

TER: Do you have any parting thoughts for our readers?

MK: If you have a longer time horizon, fortune will favor the bold. This is a fantastic market, offering opportunities to make a lot of money in the sector. It's obvious the junior resource sector is in the doldrums, but this current bear market is providing great deals. Everyone wants to buy a Rolex for the price of a Timex. Right now, Mr. Market has put up everything on sale. But testicular fortitude is required in these markets, and if you invest in the right people, fortune will favor the bold.

TER: Marin, thank you for your time and your insights.

Investment Analyst Marin Katusa is the senior editor of Casey's Energy Report, Casey's Energy Dividends and Casey's Energy Confidential. With a background in mathematics, Katusa left teaching post-secondary mathematics to pursue portfolio management within the resource sector. He is regularly interviewed on national and local television channels in North America such as the Business News Network (BNN) and many other radio and newspapers for his opinions and insights regarding the resource sector. A regular part of his due diligence process for Casey Research includes property tours, which has resulted in him visiting hundreds of mining and energy exploration projects all around the world. For more cutting-edge investment ideas from Marin Katusa's, get your very own 2013 Energy Forecast.

Like him or hate him, Chávez definitely had a huge following in Venezuela, as well as the entirety of Latin America. His anti-American and socialistic rhetoric made him an ally of Fidel Castro in Cuba and Ahmadinejad in Iran. Combined with Correa in Ecuador, Fernández in Argentina, and Morales in Bolivia, Chávez was able to make a front in South America against the "evil imperialist gringos."

But with him no longer in the picture, things will change, and cheap Venezuelan oil will be able to flow into the markets, right?

Wrong.

Whoever succeeds Hugo Chávez will be trapped between a rock and a hard place. Venezuela currently has some of the cheapest gasoline in the world; it's costing an average of $1 to fill up one's tank. These low prices are made possible by the enormous amount of fuel subsidies - estimated to be 4.5% of the GDP (for reference, the US Department of Defense spends 4.5% of the US GDP). Any attempts to remove these subsidies will be met with enormous resistance from the population, which has long viewed cheap gas as a birthright.

To make things worse, the production of oil from Venezuela has been steadily decreasing due to the lack of reinvesting back into the oil patch and lack of upgrading the energy infrastructure. Instead of investing in the oil sector, Chávez has been spending most of the money on social programs. This decrease in supply combined with increased demand for oil from a growing population means there is much less oil available for exports.

In fact, since Chávez took power in 1999, Venezuela's oil exports have been cut by half.

Oil provides 45% of Venezuela's revenue, so in order to keep running the country, the government must find a way to get more money out of every barrel that it exports.

And what better way is there than to pass it on to the evil imperialist consumers of the West?

This situation is not happening just in Venezuela, but in many other oil-producing countries: Iran, Kuwait, and Indonesia are just a few examples. It is only a matter of time before these countries conspire in order to raise the worldwide price of crude oil. What will they raise it to?

US$100 per barrel of oil? US$150? US$200?

Whatever it takes to keep the country running and the ruling classes in power.

Will America be spared? According to the latest International Energy Agency (IEA) report, the United States will become self-sufficient in energy by 2035, which means that it will be free from the geopolitical manipulations of oil-producing countries.

Unfortunately for America, this report is flawed and filled with inconsistencies - relying on it to guide your energy investment decisions would likely prove disastrous to your portfolio.

A better bet for your portfolio would be to follow the advice in The 2013 Energy Forecast. It provides an insider's view of two segments of the energy sector likely to provide sizable near-term returns to investors who position themselves now.

Today, you can get this report for free.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The story goes that one day a lightning bolt struck one of the wells, sending a pillar of fire tens of meters into the air. Excited locals named the phenomenon "Wells of Fire." They didn't yet realize it, but they had discovered that natural gas is often associated with salt resources.

Ever the entrepreneurs, the villagers began to harness the water's "firepower" to produce and evaporate the brine. It proved an efficient replacement for wood fires, and eventually the villagers expanded their salt-making facilities by building underground "pipelines" of bamboo. Though most of the gas was used for salt production, there is evidence to suggest that natural gas was also piped into the capital Peking, modern-day Beijing, for lighting at night.

From Sichuan and the world's first hydrocarbon pipeline, we'll fast-forward to 19th-century Pennsylvania.

In the latter half of the 19th century, kerosene from petroleum steadily took over whale oil for burning in lamps. In 1859, when Edwin Drake drilled his landmark oil well near Titusville, Pennsylvania, the discovery set off an oil rush that drew prospectors to Oil Creek from near and far looking to strike black gold.

Drillers soon realized, however, that the bottleneck of profit was not so much in finding oil as it was getting the oil they found to market. For instance, the nearest rail line was several miles away from the Oil Creek fields, and some difficult terrain lay between.

But where there's a will, there's a way, as the saying goes. The drillers hired thousands of horse-drawn wagons and their drivers, called teamsters, to haul their crude from drilling site to river, railroad, or refinery. The teamsters, themselves no dummies, sensed opportunity and charged some exorbitant prices. For instance, a driller often paid more to move his oil the first several miles by teamster than he did to move it the remaining 350 miles to New York City by rail.

The teamsters' monopoly ended in 1865, when Samuel Van Syckel built the first major US pipeline - a 2-inch iron pipe that covered five crucial miles between a new field and the nearest railroad station. This first pipeline carried 2,000 barrels of oil every day: not much compared with the million-plus barrels per day of the Keystone pipeline, but a considerable amount in terms of horse-drawn wagons.

Building the pipeline wasn't easy. The roadless, hilly terrain posed challenge enough, but the teamsters also did everything they could to sabotage the project, including cutting pipes and burning the oil.

Van Syckel defended his pipeline in true American fashion: He posted armed guards along its entire length. With firepower now backing the enterprise, harassment stopped, the pipeline began to run at full capacity, and now it was Van Syckel's turn to reap profits.

Seeing his success, others raced to build their own. Pipelines indeed proved cost-effective as a means to transport oil, even while they were still short and restricted to localized areas of production.

But with the help of one man, all that was about to change.

John D. Rockefeller, the man who became America's first billionaire, started his working career as a farmhand in the 1850s who couldn't afford college. Instead, he took a 10-week course to become a bookkeeper.

Once he graduated, he reputedly spent eight- and nine-hour days going to every business in Cleveland to ask for a job, some of them more than once. (Would it help today's unemployed to know that Rockefeller had to beat the bushes too?)

His perseverance was finally rewarded with a clerk's job at a company that bought, sold, and shipped commodities. He soon became known among the staff as a whiz at calculating transportation costs of complex deals - numerical acrobatics that would serve him well all his life.

At age 19, Rockefeller and a partner opened their own produce-shipping business. His combination of meticulousness and skillful analysis helped return their initial capital within their first year. The business continued to grow during the Civil War, as the war efforts meant higher grain prices and higher transportation prices.

Soon Rockefeller had a good amount of money with which to invest. He (correctly) believed railroads would become the primary means to transport agricultural products and would open up the vast western lands to eastern markets - trends that didn't bode well for his own produce shipping. He began to look for other business ventures that could be profitable… and found a fledgling sector poised to take off: the oil industry.

However, where he and his partners entered was not in oil production, but its refining. The same railroads that would eclipse his shipping business would help launch his refining venture, as Cleveland enjoyed not the usual one rail line, but two. Transportation costs would be lower and thus his refinery products more competitive.

By the late 1860s, only five years after getting into the oil business, Rockefeller's refining company was the largest in the world. A major reason for his success was a business model that today we call vertical integration.

Rockefeller knew that in order to keep costs down, he would have to control both the upstream and the downstream. For example, he even bought his own woodlands for lumber to make his own oil barrels, and built kilns on-site to dry the lumber and save shipping weight on its way to (his own) cooperage. His attention to cost-cutting was painstaking.

Small surprise, then, that the cost efficiencies of transporting oil via pipeline lured Rockefeller as soon as he heard about them. And he realized that if he owned enough pipelines, he could also dictate how much he paid for the oil that went into his refineries.

Standard Oil was born of this ambition in 1870, with Rockefeller as majority partner. In what's been dubbed the "Cleveland Conquest" or the "Cleveland Massacre" (depending on your point of view), Standard Oil bought out or put under almost three-quarters of its Cleveland rivals in 1872 alone. By 1877, the company controlled some 90% of America's refineries and pipelines.

1. Lower your costs. Lower costs mean higher margins and much more resilience during bad times. Rockefeller famously reduced from 40 to 39 the number of drops of solder to close the lids of kerosene cans, saving the company hundreds of thousands of dollars in the long run. He'd also ask for financial statements down to three decimal places, the better to spot inefficiencies in his supply chain and fix them.

   As investors, follow in Rockefeller's footsteps by investing in companies with low costs - but also reduce the cost basis in the stocks you own.

   Have you checked lately whether you're getting the best deal from your brokerage? Don't be afraid to take your business somewhere else. Every advantage counts in this fast-moving world.

   Also, are you making the most out of your portfolio? Could you do more with it? It's a good idea to invest a portion (and we do mean just a portion) of your portfolio in equities that can offer higher reward for higher risk. This is especially true if your portfolio is heavy in capital.

1. When the market is turning against you, move on. Had Rockefeller stuck to his grain-shipping business, he'd likely not even made a ripple on the pages of financial history. When he spotted opportunity in the up-and-coming oil industry, he wasn't afraid to abandon what had been a good thing and to take the leap.

   For us, this advice means sometimes selling companies that are underperforming; knowing when it's time to cut our losses and to turn our capital toward more profitable ventures. The tricky part is knowing when to be patient and hold and when to recognize a true shift in the marketplace… and that comes from reading the signs from Mr. Market.

1. Vertical integration is a hallmark among many strong companies. Part of the reason Rockefeller could edge out his competitors was the fact that he controlled his own supply chain. He noticed very early on that if he did not control many aspects of his production, he would be at a disadvantage when it came to negotiations. And as he expanded his business, he purchased companies that could make the entire refinery process smoother, including pipelines, railroads, and even those woodlands we mentioned.

   Thus, if we want blue-chip companies that will perform well for us over the long term, we should look for firms that are vertically integrated within their own sectors.

1. Patience is key. Rockefeller kept his discipline when he landed in a tough job market after school. As investors, we're looking for companies that can pay good dividends in the long run. However, we must be wary of overpaying for stocks. Being patient - letting the market come to us rather than chase it ourselves - will give us the best bang for our buck.

The Casey Research Energy Team has just released a new report designed to help investors capitalize on the coming energy boom: The 2013 Energy Forecast. In this invaluable investor's guide, you'll find a detailed analysis of current market conditions that reveal valuable insights:

• How China is squandering its position as the primary trading partner for key African oil-producing nations (and why the US may be able to take advantage of the situation)

• Why, in spite of the death of President Hugo Chávez, Venezuela is unlikely to significantly supply the energy market with cheap oil (even though it desperately needs the money)

• A critically important formula you must run any company through before investing a penny (ignore this advice at your peril)

• Why uranium prices will rise significantly (this spells profits for investors of uranium producers with the "right stuff")

• What not to buy right now (there's one sector that the team is particularly bearish on right now)

• And much, much more.

Right now you can get The 2013 Energy Forecast for free. Click here to download it now.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Exxon Mobil Corp (XOM) is now supporting Obama in bringing a carbon tax to the US.

Why would Exxon - and other big energy companies - join forces to bring on the carbon tax?

The answer is simple: profits.

Exxon has made significant purchases, buying unconventional North American gas companies. For example, it recent bought Canadian firm Celtic Exploration for over C$2.5 billion. Let's not forget that a couple of years back, Exxon bought out XTO Energy for over US$30 billion.

How much pull does Exxon have in Washington, DC? Exxon has one of the largest lobbying groups on Capitol Hill. And how ironic: Exxon is also one of the largest holdings for all of the US Congress members. Exxon has always had clout in Washington and always will. Exxon is one of the former Rockefeller oil companies... one that has now positioned itself as one of the dominant unconventional North American companies.

How does a carbon tax benefit Exxon? Natural gas and coal race neck-and-neck when it comes to electricity generation in the United States. By increasing the cost to produce coal, natural gas becomes more attractive for utilities. This means a better bottom line for Exxon… and a fatter paycheck for its executives.

But why unconventional natural gas in the United States?

First off, it's hard for a company as large as Exxon to find deposits that will move the needle on its production meter. Unfortunately for Exxon, most of the world-class deposits that it is looking for are in regions where US companies like it have lost their advantage. For example, in Russia and former USSR states, Exxon has to now play by Putin's rules, which could change at any minute.

South America has also proven to be very dangerous for American companies. Chevron has just had US$18 billion worth of assets seized in Argentina. Before that, Chávez in Venezuela taught Shell and Exxon about doing business in Venezuela. Nationalization drives also followed in Bolivia and Ecuador. All this means is that there are fewer places companies like Exxon can go to make a consistent return on an investment without insane political risk.

Obama isn't dumb; he knows that just taxing the rich won't be enough to fill the deficit gap in the United States. A carbon tax would help both financially as well as politically: Obama would look like a hero standing up to the "dirty polluters," as well as bring in another US$100 billion in revenues.

Coal, both metallurgical as well as thermal, is already suffering: metallurgical coal prices are down because of lower demand in Europe and Asia, while thermal coal is down because of pricing pressure from natural gas and the success of shale gas. A carbon tax would be a knockout blow to the thermal-coal industry in the United States.

With the backing of Exxon, expect Obama to not only bring in a carbon tax, but to do it a lot quicker than anyone has expected - and he will be viewed as a hero by many for doing it.

Is your portfolio positioned to benefit from this coming change? It had better be. If not, you can learn how to get it in shape - and also get in on the energy super-bull that's forming.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Rosneft is buying TNK-BP, which is a vertically integrated oil company co-owned by British oil firm BP and a group of Russian billionaires known as AAR. One of the top-ten privately owned oil producers in the world, in 2010 TNK-BP churned out 1.74 million barrels of oil equivalent per day from its assets in Russia and Ukraine and processed almost half that amount through its refineries.

With TNK-BP in its hands, Rosneft will be in charge of more than 4 million barrels of oil production a day. And who is in charge of Rosneft? None other than Vladimir Putin, Russia's resource-full president.

TNK-BP has been an economic dream, producing many billions in dividend payments for its owners - but it has been a relations nightmare. The partners have fought repeatedly. In 2008 Russian authorities arrested two British TNK-BP managers amid a dispute over strategy that forced then-CEO Bob Dudley (who now heads BP) to flee Russia - and that is just one of many partnership scandals.

The writing has been on the wall for TNK-BP since this time last year, when one of the AAR billionaires quit his role as CEO of the venture and declared that the relationship with BP had run its course. Since then speculation has raged over who might buy into the highly profitable venture.

Now we know: Rosneft is buying the whole thing, in a two-part deal. In the first part, Rosneft is acquiring BP's 50% stake of the joint venture in exchange for cash and Rosneft stock worth $27 billion. The deal will give BP a 19.75% stake in Rosneft. In stage two, AAR would get $28 billion in cash for its half, though this deal is not yet finalized.

Finalized it will be, however, because the billionaires of AAR are now eager to sell, rather than remain in a joint venture with the powerful Russian oil company. Rosneft gained much of its current heft at the expense of another Russian oligarch whom Putin threw under the bus, and the billionaires of AAR know they could easily meet the same fate if they try to partner with Rosneft as equals.

If it all comes to pass, Rosneft's daily production will jump to some 4.5 million barrels per day - enough to put the Russian firm neck and neck with Exxon in the race to be the world's top oil producer. And the deal that seals it will be worth something like $56 billion - for comparison, Nike is worth $34 billion and Kraft only $27 billion. If the TNK-BP deal goes through, it will be the largest in the industry since Exxon bought Mobil in 1999.

Numbers like that deserve a little contemplation. Russia is spending a heck of a lot to buy its own oil production - smells like nationalization to me. And with Vlad Putin - the most resource-driven leader in the world today - behind the controls, I dare say we're witnessing the "Saudi Aramco-ing" of Russian oil.

Putting Putin in a position of even greater resource power can only lead one place: to high oil prices and an amazing bull market in energy.

Rosneft has grown dramatically in the last ten years - not by chance, but because Rosneft is Vladimir Putin's vehicle to reassert state ownership over a fair chunk of Russia's oil fields. The most famous example happened in 2003, when Putin charged privately held producer Yukos Oil with a $27-billion tax bill that bankrupted the company. The Russian president then handed Yukos' oil fields over to Rosneft, immediately boosting Rosneft's daily production from 400,000 barrels to 1.7 million barrels.

It was blatant nationalization. Yukos' chairman and founder, Russian billionaire Mikhail Khodorkovsky, was convicted of fraud and sent to prison. Overnight, Rosneft ballooned from a small producer to Russia's biggest oil company.

With a snap of his fingers, Putin had created a national oil giant, a vehicle through which he could pursue his plan to reassert Russian influence in the world by controlling other countries' energy needs. The pending TNK-BP deal is simply the next step in this plan. If Rosneft does buy TNK-BP, the state oil giant will pump almost half of the barrels of oil produced in Russia.

That is a massive amount of oil. Remember, only Saudi Arabia produces more oil than Russia; and no country in the world exports more oil than Russia. The country is an energy superpower - and by gradually nationalizing Russia's energy resources, Putin is tightening his grip on Europe's energy needs.

However, Putin knows he can't quite do it alone - his country doesn't have enough oil and gas expertise. Without the right expertise, production will tank, and Putin's whole plan will be derailed.

History proves that point. When Saudi Arabia nationalized its oil industry in 1980, the country was producing more than 10 million barrels of oil per day. Within five years, production had fallen by more than 60%.

For Putin, that's not an option. That's why he is encouraging BP to stick around - Rosneft needs BP's technical expertise in order to tap into Russia's huge reserves of unconventional tight oil and shale gas. Having BP as a significant shareholder also lets Putin continue the pretense that Rosneft is not simply an arm of the government.

But an arm of Putin's government it is, and as Rosneft gradually takes control of more and more of Russia's oil wealth, Putin's leverage on the international stage will increase. Saudi Arabia may have struggled in its early years as an oil-producing giant, but today the country hosts incredible clout on the world stage because of its ability to open or close oil spigots and thereby influence global oil prices.

Europe is reliant on Russia for oil and gas. To be in control of other nations' necessary energy resources is to be in a very powerful position - one that Putin has been working toward for more than a decade.

He has built pipelines that bypass troublesome countries and feed into needy markets. He is cornering the uranium market by owning a large amount of primary production and controlling 40% of global uranium-enrichment capacity, while leaving the United States in need of a new nuclear-fuel supplier. He has increased Russia's oil and gas production and encouraged unconventional exploration.

Gazprom, the Russian state gas company, already has Europe wrapped around its little finger. Russia supplies 34% of Europe's gas needs, and when the under-construction South Stream pipeline starts operating, that percentage will increase. As if those developments weren't enough, yesterday Gazprom offered the highest bid to obtain a stake in the massive Leviathan gas field off Israel's coast.

Gazprom in control of Europe's gas, Rosneft in control of its oil. A red hand stretching out from Russia to strangle the supremacy of the West and pave the way for a new world order- one with Russia at the helm.

It is not as far-fetched as it might seem - or as you might want it to be. If Rosneft does buy both halves of TNK-BP, it will become a true goliath within the global oil sector. All the little Davids who rely on its oil will be at Putin's mercy. Same goes for Gazprom as a Goliath in the continent's gas scene.

In this scenario, Russia could choke off supply to raise prices. Putin could play oil- and gas-needy nations off one another, forcing European nations to commit to long-term, high-priced contracts if they want secure supplies.

Or imagine this: Russia could join OPEC. Suddenly the oil cartel would control more than half of global oil production and most of its spare capacity. With that kind of clout, the nations of OPEC could essentially name their price for oil - and the rest of the world would simply have to pay.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.