Submitted by EnergyTechStocks.com

As big a shock as $4-a-gallon gasoline is proving to be for many Americans, the warning signs have been there for the last four years, during which time pump prices have consistently recorded huge year-over-year jumps averaging roughly 50 cents a gallon. While $4 gas isn’t likely to crush investors’ portfolios, there are other energy shocks on the horizon that could. In this EnergyTechStocks.com Special Report, we look at five events investors would be wise to plan for as best as they can. None are certain to happen, but warning signs are there.

Shock #1 – Saudi Arabia’s oil output suddenly plummets, and as the world quakes at the thought of severe oil shortages, U.S. military forces seize control of Iraqi oilfields, causing China and Russia to go on full military alert.

Face it, with even the world’s number two oil producer, Russia, now suspected of having peaked in production, there are only two countries left – Saudi Arabia and Iraq – to which the world can realistically turn to keep quenching its oil thirst until, inevitably, millions of electric and other alternatively-fueled vehicles hit global highways. Since this changeover will take at a minimum10 years, the level of Saudi and Iraqi oil production over the next decade will be of paramount importance to the global economy.

Despite all its tall talk, Saudi Arabia has yet to demonstrate that it really can significantly raise output. While many oil analysts believe it can and will, “peak oil” theorists, who are at long last gaining acceptance as global production fails to rise despite record crude prices, have long warned that Saudi oilfields could see, not a rise, but a sharp drop in production. Significantly, the Saudi government recently wrote itself an escape clause, announcing that it may decide to leave its remaining oil in the ground for the benefit of future generations.

So one day soon you could wake up to headlines that Saudi Arabia’s oil output is in freefall. Within days, if not hours, don’t be surprised if U.S. troops stationed in Iraq (or elsewhere in the Middle East, if they’ve already been pulled out of Iraq) have taken up position surrounding Iraqi oilfields, with U.S. aircraft having turned the entire country into a no-fly zone. This brazen act of aggression may be America’s only response, the only way to keep the U.S. economy afloat on a sea of oil. Just last week, Iraq’s deputy prime minister said the country might have oil reserves of 350 billion barrels, three times its “proven” reserves figure. With just its proven reserves, Iraq is the third biggest oil-containing country. With 350 billion barrels, Iraq might exceed even Saudi Arabia in reserves.

Don’t expect the U.S. to be able to do a deal with Baghdad that avoids the need to use military force. Last week a top Iraqi official publicly bristled at America’s expectation that Iraq help pay for its liberation from Saddam Hussein with some of its oil. The U.S. has no claim on Iraqi oil, the official told a Chicago Tribune reporter.

If the U.S. grabs Iraqi oilfields, will Russia and China just stand by? Of course not. Could the world suddenly become an oil battleground, each of the military giants moving its troops around like they were chess pieces? What do you think?

While every investor may have his own opinion about how likely this scenario is to play out, the warning signs are there. Protecting one’s portfolio against this possible energy shock would seem to require taking positions in defense companies (such as perhaps Lockheed, Raytheon and General Dynamics), as well as being long on long-term oil futures contracts. Likely every possible energy investment would benefit to some extent, especially the other fossil fuels (natural gas and coal) and the companies developing lithium-ion batteries for electric vehicles.