Middle East

Saudi Arabia’s Oil Supremacy Falters

22 Mar 2017   Saudi Arabia

Saudi Arabia is losing its grip on big oil markets it once dominated amid a deep production cut that has reshaped global petroleum trade routes and benefited rivals like Iran, Russia and the U.S. As it pursues a steep production cut aimed at putting a floor under oil prices, the world’s biggest crude exporter is conceding ground to American shale producers and hastening a retreat from the U.S., people familiar with current Saudi…

Iran’s 14 Billion-Barrel Oil Field Comes Online

22 Mar 2017   Iran

Back from the wilds of Asia. Just in time to witness one of the most critical new field start-ups the global oil sector has seen in years. That’s the South Pars offshore field on the Iran-Qatar border. Which was officially commissioned this week, according to reports from Iran’s oil ministry yesterday. What makes this project so important? Size — with the South Pars field holding more than 14 billion barrels, according to estimates from local engineers. The beginnings for the field will be relatively modest. With Iranian officials saying that production has initially commenced from seven wells, with output to rise to 35,000 barrels per day over the coming week. But given the massive estimates on the size of the South Pars reserves, this is a spot that could see production ramp up very significantly. With a number of other facts about this mega-project showing just how far Iran […]

Is A Russian-Iranian Energy Pact In The Making?

21 Mar 2017   Iran, Russia

In the lead-up to President Rouhani’s visit to Moscow, expected to take place in late March , a plethora of news regarding joint Russo-Iranian energy projects has been circulating on the Internet. A three-year long negotiation process regarding a 100,000 barrels-per-day swap contract is believed to be agreed upon, premised on Iran providing Russia (most likely, Rosneft) oil from Kharg Island or other hubs in the Persian Gulf in return for cash and Russian goods that Iran would “require”. Teheran also woos LUKOIL, currently Russia’s only major oil producer in the Caspian, to participate in swap deals bound for Iran’s Neka Port (in return for Iranian crude provided from Kharg Island or other Persian Gulf hubs), albeit on a much smaller scale at 4000 to 5000 barrels per day. To top it all up, numerous Russian oil companies have committed themselves to developing Iran’s hydrocarbon fields. The lifting of […]

Iran pulls first oil out of South Pars field

21 Mar 2017   Iran

Iran says it pulled its first batch of oil ever out of the South Pars field complex in the Persian Gulf. Photo by Mojtaba Mohseni/Shana March 20 (UPI) — The production of oil from the South Pars field complex in the Persian Gulf has started for the first time, the Iranian Oil Ministry declared. Shana, the Oil Ministry’s news website, reported production from seven oil wells in the South Pars complex began and should reach a net peak capacity of 35,000 per day in about a week. The oil ministry estimates the field, which Iran shares with Qatar, holds more than 14 billion barrels of oil. Gholam-Reza Manouchehri, the deputy managing director at the National Iranian Oil Co., was quoted by Shana as saying production was made possible through a floating production storage and offloading vessel, or FPSO. “By the time the FPSO recovers and processes a certain amount […]

Beijing, Saudi Arabia agree to more oil cooperation, exports to China

20 Mar 2017   China, Saudi Arabia

China and Saudi Arabia will increase their cooperation in the oil sector, including in Saudi oil exports to China, the two countries said in a joint communique issued on Saturday at the end of Saudi Arabian King Salman’s visit to Beijing. The world’s largest oil exporter has been looking to cement ties with the world’s second-largest economy. After losing market share to Russia last year, Saudi Arabia has sought to boost oil sales to China, the world’s second-largest oil market, by working mostly with China’s top three state oil firms. “Both countries are willing to raise their level of cooperation in the oil sector, including supplying Saudi oil to the continuously growing Chinese market,” the two said in […]

Saudi king’s Asia tour trumpets Aramco’s moves downstream

20 Mar 2017   Saudi Arabia

Saudi King Salman’s lavish tour of Asia, arriving in each country on a golden escalator with 400 tons of luggage, had a hardnosed marketing mission – to cement the kingdom’s place as leading oil supplier to the world’s biggest consumer region. The string of deals inked on his three-week tour to Malaysia, Indonesia, Japan and China also point to a fresh strategy, one to increase Saudi leverage over refined product and petrochemical markets, known as the downstream sector. “Our strategy is about growth in the downstream,” said Amin Nasser, chief executive officer of state oil company Aramco, told Reuters on Sunday. “The growth in that sector is very important, and anything integrated between refining, petrochemical, with marketing and distribution, is of interest to us.” Saudi Arabia’s […]

Saudi ‘Mission Impossible’ Makes Longer OPEC Oil Cuts Inevitable

18 Mar 2017   Saudi Arabia

Saudi Arabia has set a near-impossible target to end the current round of OPEC oil-production cuts, indicating that a policy rollover into the second half of the year is a near certainty. OPEC, which pumps about 40 percent of the world’s oil, and several non-OPEC countries including Russia agreed in December to reduce production for six months in an effort to bring supply and demand into balance. At the time, the producers said they could extend the deal for an extra six months. In an interview with Bloomberg Television on Thursday, Saudi Energy Minister Khalid Al-Falih said that OPEC would extend the cuts after they expire in June if oil stockpiles were “still above the five-year average.” Because oil stocks are so far above that level, the target will probably still be out of reach when the Organization of Petroleum Exporting Countries gathers in Vienna on May 25. “It […]

Iraq Could Complicate OPEC Extension

18 Mar 2017   Iraq

Oil prices are refusing to budge this Friday, despite a large increase in the U.S. rig count and some bearish noises from OPEC. (Click to enlarge) (Click to enlarge) Friday, March 17, 2017 Oil prices are set to close out the week unchanged from a week earlier, having moved up and down over the past few days. The latest report from the EIA was a merciful one for crude, showing a small but all-important drawdown in crude inventories. Had crude stocks jumped again last week, oil prices surely would have dropped significantly. Still, there is a weak case for much higher oil prices in the near-term, given that U.S. inventories are still at a record high and oil production is rising. Saudi Arabia prepared to extend cuts if inventories remain high . Saudi Arabia’s energy minister Khalid al-Falih said in a Bloomberg interview that OPEC would be prepared to […]

Beijing, Saudi Arabia agree to more oil cooperation, exports to China

18 Mar 2017   China, Saudi Arabia

China and Saudi Arabia will increase their cooperation in the oil sector, including in Saudi oil exports to China, the two countries said in a joint communique issued on Saturday at the end of Saudi Arabian King Salman’s visit to Beijing. The world’s largest oil exporter has been looking to cement ties with the world’s second-largest economy. After losing market share to Russia last year, Saudi Arabia has sought to boost oil sales to China, the world’s second-largest oil market, by working mostly with China’s top three state oil firms. “Both countries are willing to raise their level of cooperation in the oil sector, including supplying Saudi oil to the continuously growing Chinese market,” the two said in […]

Intra-Kurdish tensions high amidst provocations and protests

18 Mar 2017   Iraq

A volatile rivalry between two Kurdish factions, which burst into deadly fighting two weeks ago in Sinjar, continues to escalate with protests and provocative troop movements.Forces aligned with the Kurdistan Democratic Party (KDP) of Massoud Barzani, the acting president of the Kurdistan Regional Government (KRG), have deployed to several areas in Erbil and Dohuk provinces, provoking demonstrations and creating friction with local residents.The deployments appear to be a response to the… This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

Iraq’s oil exports dip so far in March after OPEC cut

17 Mar 2017   Iraq

Oil exports from Iraq’s southern terminals have edged lower so far in March, according to loading data and an industry source, although not as much as expected, potentially raising questions over the country’s compliance with OPEC production cuts. A March loading program had pointed to southern exports from OPEC’s second-largest producer falling to 3 million barrels per day (bpd), which a source familiar with the matter said was related to Iraqi efforts to comply with OPEC cuts. But exports from southern Iraq – the outlet for most of the country’s crude – in the first 14 days of March have averaged 3.25 million bpd, according to shipping data tracked by Reuters and by an industry source. Two Iraqi oil officials said on Wednesday the rate in the first half of March […]

Iran’s Natural Gas Rush Won’t Bring Export Riches — For Now

17 Mar 2017   Iran

Iran is on track to out-produce Qatar, the world’s biggest LNG exporter , at the vast natural gas deposit they share in the Persian Gulf. But as much as they might want , the Iranians won’t have much gas to export because they are likely to use most of the new production themselves. 1. How much natural gas does Iran export? Almost nothing. Iran has 18.2 percent of proven gas reserves, ahead of Russia and Qatar, according to the BP Statistical Review of World Energy. Unlike its competitors, which have built far-flung pipelines and liquefied natural gas plants to reach foreign buyers, Iran exported 8.4 billion cubic meters (300 billion cubic feet) in 2015 while importing 7.5 billion cubic meters the same year. Until recently, it was a net importer, buying or bartering for gas from Turkmenistan and Azerbaijan because its domestic distribution network doesn’t supply the entire country. […]

Saudi Arabia Says Oil-Supply Cuts May Be Extended If Needed

17 Mar 2017   Saudi Arabia

OPEC and its allies may prolong production cuts after they expire in June if the world’s crude inventories remain excessive, Saudi Arabia ’s Energy Minister said. The curbs will be sustained if stockpiles are “still above the five-year average, if the markets are still not confident in the outlook, if we don’t see companies and investors feel good about the health of the global oil industry,” Khalid Al-Falih said in a Bloomberg television interview in Washington. “We want to signal to them that we’re going to do what it takes to bring the industry back to a healthy situation.” The Organization of Petroleum Exporting Countries will meet on May 25 to decide whether to continue its production cuts, aimed at ending a slump that battered the economies of energy exporters around the world. The strategy is moving global markets in the “right direction” and fundamentals have improved considerably, Al-Falih […]

Intra-Kurdish tensions high amidst provocations and protests

17 Mar 2017   Iraq

A volatile rivalry between two Kurdish factions, which burst into deadly fighting two weeks ago in Sinjar, continues to escalate with protests and provocative troop movements.Forces aligned with the Kurdistan Democratic Party (KDP) of Massoud Barzani, the acting president of the Kurdistan Regional Government (KRG), have deployed to several areas in Erbil and Dohuk provinces, provoking demonstrations and creating friction with local residents.The deployments appear to be a response to the…

China, Saudi Arabia Ink $65-Billion Worth Of Preliminary Deals

17 Mar 2017   China, Saudi Arabia

China and Saudi Arabia have signed preliminary deals that could be worth as much as $65 billion if finalized, Xinhua reports . The news came on the first day of a four-day visit by Saudi King Salman to China. China’s Deputy Foreign Minister Zhang Ming said that President Xi Jinping and King Salman inked a total 14 cooperation agreements, including a memorandum of understanding on 35 projects for “production capacity and investment cooperation”. Among the industries that the agreements cover are oil production, petrochemicals, and even space. China is a crucial market for Saudi oil, and the king’s visit is widely seen as an attempt to secure future exports, preferably under long-term contracts, which is the standard approach of the Kingdom toward crude oil exports. Outside oil exports, Saudi Arabia is also looking for opportunities to expand its refining and chemical production markets, Reuters notes , as part of […]

Iran’s Natural Gas Rush Won’t Bring Export Riches — For Now

16 Mar 2017   Iran

Iran is on track to out-produce Qatar, the world’s biggest LNG exporter , at the vast natural gas deposit they share in the Persian Gulf. But as much as they might want , the Iranians won’t have much gas to export because they are likely to use most of the new production themselves. 1. How much natural gas does Iran export? Almost nothing. Iran has 18.2 percent of proven gas reserves, ahead of Russia and Qatar, according to the BP Statistical Review of World Energy. Unlike its competitors, which have built far-flung pipelines and liquefied natural gas plants to reach foreign buyers, Iran exported 8.4 billion cubic meters (300 billion cubic feet) in 2015 while importing 7.5 billion cubic meters the same year. Until recently, it was a net importer, buying or bartering for gas from Turkmenistan and Azerbaijan because its domestic distribution network doesn’t supply the entire country. […]

Saudi Arabia Tries To Reassure Markets After Oil Price Plunge

16 Mar 2017   Saudi Arabia

Saudi Arabia’s Oil Minister Khalid al-Falih has tried to reassure markets of The Kingdom’s commitment to the rebalancing of crude oil’s fundamentals, after benchmarks yesterday slid down on an announcement that Saudi Arabia had increase production in February to 10.01 million bpd . The Kingdom, al-Falih said,”is committed and determined to stabilize the global oil market by working closely with all other participating OPEC and non-OPEC producers.” Al-Falih then went on to explain that the self-reported level of production does not necessarily reflect the actual amount supplied to the market. It was Saudi Arabia’s self-reported figure for February that pressured prices, with WTI diving to $47.72 in midday trading, and Brent touching the psychologically significant $50 barrier, at $50.78 a barrel. Secondary sources, which OPEC uses to calculate each member’s monthly production, pegged the Saudi output at 9.797 million barrels daily. The 10.01 million bpd are still below Saudi […]

China, Saudi Arabia eye $65 billion in deals as king visits

16 Mar 2017   Saudi Arabia

Saudi Arabia’s King Salman oversaw the signing of deals worth potentially $65 billion as he began a visit to Beijing on Thursday, as the world’s largest oil producer looks to cement ties with the world’s second-largest economy. The octogenarian monarch, who has overseen the launch of an ambitious economic reform plan since his accession two years ago, is on a month-long Asian tour. The visits to countries that are some of world’s fastest growing importers of Saudi oil aim to promote investment opportunities in the kingdom, including the sale of a stake in its giant state firm Saudi Aramco. Saudi Arabia has sought to boost oil sales to China, the world’s second-largest oil market, after losing market share […]

Nasdaq CEO says tech partnership can help win $100 billion Saudi Aramco IPO

16 Mar 2017   Saudi Arabia

A view of the exterior of the Nasdaq market site in the Manhattan borough of New York City, U.S., October 24, 2016. REUTERS/Shannon Stapleton Nasdaq Inc is touting its technology credentials in its effort to win the listing of Saudi Aramco’s upcoming initial public offering, the exchange operator’s chief executive said in an interview. Financial centers around the globe, including New York, London and Tokyo, have been making a special effort to win the oil giant’s $100 billion listing, which is expected to be the largest IPO ever. Nasdaq is already the technology provider to Saudi Arabia’s exchange, and will use that relationship to promote the idea of a dual listing in Riyadh and another global market, Nasdaq CEO Adena Friedman said. Nasdaq is based in New York, where its exchange operates, but offers technology services to other global exchanges. “Every exchange in the world right now is competing […]

Saudi Aramco to resume oil product shipments to Egypt soon

16 Mar 2017   Egypt, Saudi Arabia

Saudi Arabian state oil company Aramco will resume oil product shipments to Egypt some six months after halting them suddenly, the Egyptian Petroleum Ministry said on Wednesday, signaling a potential thaw in relations after months of tension. The ministry said in a statement that it was working with Aramco on a timetable for the resumption of shipments and that the reasons behind the October cut-off were purely commercial. “It was agreed that the Saudi Arabian side would resume Aramco’s shipping of oil products as per the commercial contract signed between the Egyptian General Petroleum Corporation and Aramco,” the statement said. Saudi Aramco could not be reached for immediate comment. “Very shortly we will finalize the time and place for receiving shipments from Aramco,” a ministry official told Reuters, asking not to be identified because he is not authorized to speak to the media. Asked if shipments would resume within […]

Iraq Plans to Boost Crude Oil Production and Exports This Year

16 Mar 2017   Iraq

Iraq pumped 4.57 million barrels a day of oil in February and plans to boost output later in the year even as the OPEC member reaffirmed its commitment to the group’s decision to cut production to counter a global glut.  The country plans to increase output to 5 million barrels a day by the end of 2017, Oil Minister Jabbar Al-Luaibi said Wednesday at a news conference in the southern city of Basra. Iraq exported 3.87 million barrels a day from its southern and northern shipment hubs in February, the ministry’s spokesman, Asim Jihad, said in an emailed statement.

Iran Continues To Ignore The OPEC Deal

15 Mar 2017   Iran, OPEC

All data below is in thousand barrels per day and is through February 2017. (Click to enlarge) OPEC crude oil production dropped to 31,958,000 bpd in January. That was a drop of 140,000 bpd. In January OPEC production dropped 930,000 bpd for a two-month total of 1,070,000 bpd. Officially OPEC agreed to cut production by 1.2 million barrels per day beginning in January. So, they are getting close. OPEC’s November production of 33,374,000 represented an all-time high for the Cartel. Algerian production held steady in February after a drop of 33,000 bpd in January. Angola’s production was down 18,200 bpd in February. Ecuador’s production dropped 4,400 bpd in February after dropping 13,000 bpd in January. Gabon dropped 7,000 bpd in February and reached a new low of 194,000 bpd. Iran continues to ignore any requests from OPEC to cut production. Iran’s production was up over 36,000 bpd in February […]

Middle East Gasoline Boom Stirs Sales Fight From Europe to Asia

15 Mar 2017   Middle East

Expanding fuel shipments from the Persian Gulf will intensify competition from Europe to Asia, squeezing profits across the global refining industry and contributing to a looming glut of oil products. As Saudi Arabia, Iran and other crude suppliers build new oil-processing plants and upgrade old ones, the Gulf region is poised to become a net exporter of refined products as soon as this year. This heralds a tougher contest for sales between state companies in the Gulf, the trading houses that currently supply them and Asian refiners that are also boosting exports. European refiners are set to lose out as newer rivals from the Middle East, India and China vie with them for sales, according to consultants Wood Mackenzie Ltd. and FGE. Saudi Arabia and Abu Dhabi have built export-oriented refineries with a combined capacity of almost 1.4 million barrels a day over the last four years, and the […]

Saudis stand by commitment to oil production cuts

15 Mar 2017   Saudi Arabia

Saudi Arabia, the world’s biggest oil exporter, moved to allay fears that the kingdom was backing away from its pledge to curb production, underlining its concern about a 10 per cent plunge in the crude price over the past week. The kingdom’s energy ministry rushed out a rare statement on Tuesday asserting its commitment to “stabilising the global oil market”, just as global benchmark Brent crude slipped towards $50 a barrel for the first time this year. The statement, released after 8pm in Riyadh, came after Opec’s monthly report showed Saudi Arabia’s production had increased in February, adding to pressure on the market that was already concerned about a rebound in US shale oil output. “Saudi Arabia assures the market that it is committed and determined to stabilising the global oil market by working closely with all other participating Opec and non-Opec producers,” the ministry said. Brent crude, the global benchmark, has dropped by almost 10 per cent to a low of $50.25 a barrel in the last week, while US marker West Texas Intermediate has fallen almost 11 per cent to $47.07 a barrel. Both benchmarks have erased all their gains since some of the world’s biggest producers agreed to curb supplies as part of a deal late last year as a rebound in prices has stoked a resurgence in US shale oil production.

Saudi Arabia Says It Has Reversed a Third of Its Production Cuts

15 Mar 2017   Saudi Arabia

Saudi Arabia told OPEC it raised output back above 10 million barrels a day in February, reversing about a third of the cuts it made the previous month. The kingdom boosted production by 263,300 barrels a day to 10.011 million a day, according to a report from OPEC on Tuesday. Oil prices sank on speculation the country had grown impatient with fellow producers lagging in their own cutbacks. Saudi Arabia’s Energy Ministry said that the volume of crude supplied to markets nonetheless fell by 90,000 barrels a day to 9.9 million, as the extra supplies were moved into storage. Even after the increase, Saudi Arabia’s data show it’s cutting output more than required under the terms of OPEC’s Nov. 30 agreement. The kingdom remains determined to stabilize the global oil market, according to a statement from the ministry. Nevertheless, Energy Minister Khalid Al-Falih warned last week that the kingdom […]

Iran to keep oil cap at 3.8 million barrels a day in second half 2017

15 Mar 2017   Iran

Iran will keep its oil production cap at 3.8 million barrels per day in the second half of 2017, the country’s oil minister said on Tuesday, provided other OPEC members stick to the output level they agreed in November. “If OPEC members stay committed to the agreement (on freezing output), Iran will produce 3.8 million BPD of oil in (the) second half of the current year,” Bijan Namdar Zanganeh was quoted as saying by state news agency IRNA. The Organization of the Petroleum Exporting Countries (OPEC) agreed on Nov. 30 to cut output by 1.2 million bpd to 32.5 million bpd for the first six months of 2017, in addition to 558,000 bpd of cuts agreed to by independent producers such as Russia, Oman and […]

Trump meets with Saudi deputy crown prince at the White House

15 Mar 2017   Saudi Arabia

President Donald Trump met with Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman at the White House on Tuesday for a discussion that was likely to touch on investment opportunities in the kingdom and efforts to stop the war in Syria. Trump, who took office in January, and Prince Mohammed who is also the kingdom’s defense minister, kicked off their talks in the Oval Office, where they posed for a picture in front of journalists and did not take questions. U.S. Vice President Mike Pence, Trump’s senior adviser and son-in-law Jared Kushner, chief of staff Reince Priebus and strategist Steve Bannon were also present. The meeting was the first since Trump’s inauguration with the powerful prince, who is leading the […]

Kuwait Becomes First OPEC Nation to Call for Longer Oil Cuts

14 Mar 2017   Kuwait, OPEC

Kuwait wants OPEC to extend output cuts beyond June, becoming the producer group’s first member to call for more time to balance the global oil market as the rally that boosted prices initially on the curbs has faded. U.S. inventories have climbed more than expected, causing prices to decline even as global producers cut their output, Kuwait’s Oil Minister Issam Almarzooq said, according to official news agency Kuna. Kuwait supports rolling over the oil cuts, though it’s too early for the Organization of Petroleum Exporting Countries to agree on an extension, he said. “Kuwait supports the extension of the agreement after June,” Almarzooq said. An extension will ‘‘accelerate the rebalancing of the global oil market and will contribute to the return of prices to levels acceptable for producing countries and for the petroleum industry in general.” OPEC and 11 other major producers agreed last year to slash production, spurring […]

Q&A: Oil Minister Jabbar al-Luiebi

14 Mar 2017   Iraq

By the end of the year, Iraq plans to shatter the record-setting benchmarks it achieved in 2016 for both oil and gas production.Despite an OPEC agreement to limit global supply, Oil Minister Jabbar Ali al-Luiebi said Iraq will reach 5 million barrels per day (bpd) of oil in 2017, and capture 1.36 billion standard cubic feet per day (scf/d) of gas.Since taking the helm of the Oil Ministry seven months ago, Luiebi has made quick work in trying to streamline the bureaucracy and put an arra…

Saudi Crown Prince Flies To Washington To Meet With Donald Trump

14 Mar 2017   Saudi Arabia

Saudi Deputy Crown Prince, Mohammed bin Salman, responsible for the kingdom’s reforms, left on Monday for Washington to meet President Donald Trump on a visit expected to pitch the world’s top oil exporter as an attractive investment destination. It will be the first meeting since Trump took office in January between the U.S. President and the prince who is next in line to lead Saudi Arabia, and is in charge of the kingdom’s efforts to revive state finances by diversifying away from falling crude oil revenues, of which the upcoming Aramco IPO will be a critical component. Saudi Deputy Crown Prince Mohammed bin Salman Under the Saudi plan, which seeks to promote the private sector and make state-owned companies more efficient, Riyadh plans to sell up to 5 percent of state oil giant Saudi Aramco in what is expected to be the world’s biggest initial public offering. Last year, […]

Saudi Arabia Won’t Let Oil Head Back To $20s Again

13 Mar 2017   Prices, Saudi Arabia

Saudi Arabia and American frackers are gearing up for the second oil war. It will take oil lower, but not back to $20 again. Saudi Arabia has kept its promise. It has cut oil output by 486,000 barrels a day, in line with the OPEC agreement the Kingdom pulled together last October, helping oil stabilize above $50 per barrel. And it has set up an example for the rest of OPEC and Russia, who have kept their own promise to stick with the October accord, officially at least. For a while things in the oil market seemed like back in the old good days: oil prices headed north, approaching the magic number of $60, and the Saudi Kingdom was talking up its grand plan, the Aramco IPO. But in the last three days the oil market has gotten oversupplied, and oil prices are heading south again, dropping below the […]

Trillion-dollar question looms as Aramco audits oil reserves

13 Mar 2017   Saudi Arabia

Listed reserves haven’t changed in nearly 30 years * Falih says reserves could be bigger than those already booked * Disclosures likely to resemble those of BP and Shell * Market will not get detailed information by field – sources When Saudi Aramco reveals a Western audit of its oil reserves, investors will be looking for two answers: How much oil and how much detail? Saudi Energy Minister Khalid al-Falih has hinted at a surprise on the upside on reserve volumes ahead of Aramco’s 2018 share listing, but industry sources say detail on individual deposits – which investors have long sought – will be thin. Saudi Arabia’s reserves of easily recoverable oil have long been the world’s largest. But there also have long been questions about the volume and quality of those reserves. For nearly 30 years – despite […]

Saudi Arabia and the war on shale oil that never ended

13 Mar 2017   Saudi Arabia

Last week when Saudi Arabia let it leak that the kingdom has no intention of leading OPEC toward another cut in production to accommodate the growing volumes of oil from American shale deposits, it was another sign that the Saudi war on shale actually never ended. To properly understand this announcement, we need to return to last fall. Most people believed then that the cuts agreed to by OPEC under Saudi leadership marked the end of Saudi Arabia’s war on shale oil in America. At the time I cautioned against such a conclusion , and said I was doubtful that there would actually be any decline in world oil production because the Saudis didn’t really want a decline. And, guess what? The OPEC cuts have yet to be fully implemented and have been offset by rising production elsewhere . And, the Saudis are now complaining that the Russians who, […]

Saudi King Visits Japan, Seeks Help on Diversifying Economy

13 Mar 2017   Japan, Saudi Arabia

King Salman and hundreds of business leaders from Saudi Arabia are in Japan for talks Monday mainly expected to focus on economic ties. The visit is the first by a Saudi king in 46 years, though Salman visited more recently as crown prince. Saudi Arabia is one of Japan’s biggest suppliers of crude oil, accounting for about a third of its total imports of oil from the Middle East. The kingdom is striving to diversify its economy away from its heavy reliance on oil exports, and Salman is on a month-long tour of Asia to advance his kingdom’s economic and business interests. Japan’s Chief Cabinet Secretary Yoshihide Suga told reporters Monday that Japan is willing to provide support for the economic power […]

Saudi deputy crown prince to meet Trump, investment in focus

13 Mar 2017   Saudi Arabia, USA

Saudi Deputy Crown Prince Mohammed bin Salman attends a graduation ceremony and air show marking the 50th anniversary of the founding of King Faisal Air College in Riyadh, Saudi Arabia, January 25, 2017. Deputy Crown Prince Mohammed bin Salman, in charge of Saudi Arabia’s reforms, left on Monday for Washington to meet President Donald Trump on a visit expected to promote the world’s top oil exporter as an investment destination. It will be the first meeting since Trump took office in January between the U.S. President and the powerful prince leading the kingdom’s efforts to revive state finances by diversifying away from falling crude oil revenues. Under the plan, which seeks to promote the private sector and make state-owned companies more efficient, Riyadh plans to sell up to 5 percent of state oil giant Saudi Aramco in what is expected to be the world’s biggest initial public offering. Facing […]

Iran leapfrogs Iraq as India’s no. 2 oil supplier in February: trade data

13 Mar 2017   India, Iran, Iraq

India’s oil imports from Iran rose nearly 17 percent in February from a month earlier as refiners received less crude from key OPEC producers Saudi Arabia and Iraq after an OPEC deal to cut output, shipping data showed on Monday. The jump meant Iran replaced regional rival Iraq as India’s second-biggest oil supplier – a role Tehran used to occupy before Western sanctions were imposed against it over the country’s disputed nuclear program. While Saudi Arabia remained the biggest oil supplier to India, ship tracking data and a report compiled by Thomson Reuters Oil Research and Forecasts showed imports from Iran rose to 647,000 barrels per day (bpd) in February. That was 16.7 percent more than January, and almost trebled from February […]

Despite sanctions relief, Shell still cool on Iranian oil buys

11 Mar 2017   Iran

Royal Dutch Shell has bought only three cargoes of Iranian oil since sanctions were eased a year ago, a small fraction of what it used to buy and an indication of the legal difficulties and high prices that still hamper the trade. The Anglo-Dutch firm did not give a reason for the drop in purchases, which were disclosed in its annual report, and the company declined to comment further. But oil trading sources say Iranian oil is often too expensive and in any case remaining sanctions make dealing with the Islamic Republic a legal minefield. As an example of sanctions-related difficulties, Shell’s filings showed it had to disclose payments of only a few hundred dollars when its employees bought tickets with Iranian airlines. After an accord was reached over […]

Oil Ministry confirms February export decline

11 Mar 2017   Iraq

Iraq’s Oil Ministry released official export data for January and February on Thursday, confirming prior estimates by Iraq Oil Report suggesting that the country was reducing output in its effort to conform with an OPEC quota agreement.The federal government exported an average of 3.32 million barrels per day (bpd) in January and 3.27 million bpd in February, the ministry said. Those figures do not include oil sold independently by the Kurdistan Regional Government (KRG).Throughput data …

Kirkuk oil crisis subsides as PUK faction withdraws

10 Mar 2017   Iraq

An armed faction of the Patriotic Union of Kurdistan (PUK) political party has withdrawn from key energy sites in Kirkuk, signaling at least a temporary resolution to a crisis over the province’s oil and gas resources.The drawdown, which began Wednesday, followed a meeting in Sulaimaniya on Tuesday between Iraqi Prime Minister Haider al-Abadi and senior PUK leaders, including Hero Talabani and Kosrat Rasul, according to a member of the PUK leadership council.Their discussion centered on … This content is for registered users.

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Why Kurdish Oil Is a Wild Card for Markets:

9 Mar 2017   Iraq

If Iraq’s Kurdish territory were a country, it would probably qualify for OPEC membership. It wouldn’t even be the smallest member, given its production of about 600,000 barrels of oil per day. That’s an impressive achievement for a landlocked enclave that started exploring only a decade ago. The region’s potential is greater still, though it faces political, military and economic challenges to expanding its output. 1. Why does the Kurdish region matter to oil markets? The semi-autonomous Kurdistan Regional Government says the area’s reserves could total 45 billion barrels, more than Nigeria’s, and Kurdish crude is generally cheap to extract. When foreign investors tramped into the region’s oil fields after the fall of Saddam Hussein’s regime, the crude was so abundant it seeped from the ground beneath their feet. Tony Hayward, former BP Plc boss turned wildcatter, called Iraqi Kurdistan “one of the last great frontiers” in the oil […]

Overhaul planned for refinery in Kirkuk, Iraq

9 Mar 2017   Iraq

The refining capacity of a complex in the northern Iraqi city of Kirkuk will be expanded in part to better serve community needs, the Iraqi oil minister said. “The Ministry of Oil is working to add a new refining unit to Kirkuk refinery with a capacity of 10,000 barrels per day before the end of the year,” Iraqi Oil Minister Jabar al-Luaibi said in a statement . The northern city of Kirkuk has been at the center of disputes between the central government in Baghdad and the semiautonomous Kurdistan Regional Government. The terrorist group calling itself the Islamic State waged an offensive on Kirkuk last year. The oil minister said in a telegram to Iraqi Prime Minister Haider al-Abadi that refinery development […]

Saudi Arabia’s Secret Meetings With The World’s Largest Oil Traders

9 Mar 2017   Saudi Arabia

Something unprecedented happened last November when OPEC sat down in Vienna to hammer out the final terms of its oil production cut deal (which, incidentally, has yet to translate into a drop in record high inventories): one day before the summit, the oil producing cartel – or rather Saudi Arabia – secretly invited hedge funds to sit in on the negotiations and provide OPEC with input on what to do. However, news of the meeting leaked shortly thereafter, and was reported by the FT: “Saudi Arabia convened private talks with the world’s largest oil traders in Vienna before OPEC’s crunch meeting on whether to cut oil output.” Mark Couling, head of crude oil at Vitol, the world’s biggest independent oil trading company, was invited to Vienna by the Saudi delegation, according to people with knowledge of the talks. Pierre Andurand, who runs the $1.5bn Andurand Capital fund, one of […]

Saudi to supply full crude contract volumes to Asia

9 Mar 2017   Saudi Arabia

Saudi Aramco will supply full contract volumes of crude oil to multiple Asian buyers in April, three industry sources with knowledge of the matter said. Despite commitments to cut production in an OPEC deal, Saudi Aramco had agreed to supply at least one customer in Asia with incremental crude on top of contracted volumes next month, as it holds to a strategy of maintaining market share in the fastest-growing market, one of the sources said. Saudi Arabia led a pact between the Organization of the Petroleum Exporting Countries (OPEC) and other major producers, including Russia, Mexico and Kazakhstan, to cut global crude output by about 1.8 million barrels per day (bpd) from Jan. 1, and bring supply closer to demand. The kingdom had cut beyond the level […]

Saudi Oil Rations Mirror Pricing as Heavy Crudes Cut Over Lights

9 Mar 2017   Saudi Arabia

Saudi Arabia is handing customers in the world’s biggest oil market sweet treats while limiting sour supplies. The producer cut volumes of its Arab Medium and Arab Heavy crude for April sales to at least two North Asian refiners, according to people with knowledge of the matter. It instead gave the buyers more of the Arab Light and Arab Extra Light varieties to compensate, said the people, who asked not to be identified because the information is confidential. One other buyer in the region received cuts in volumes for all grades it sought. Saudi Arabian Oil Co. also gave full volumes of contractual supplies to two other North Asian refiners, which mostly buy lighter “sweet” crudes that typically have less sulfur and are easier to process than heavier “sour” oils. Processors in South Asia and Southeast Asia got all the oil they asked for in April. The state-run producer […]

Why Kurdish Oil Is a Wild Card for Markets: QuickTake Q&A

9 Mar 2017   Iraq

If Iraq’s Kurdish territory were a country, it would probably qualify for OPEC membership. It wouldn’t even be the smallest member, given its production of about 600,000 barrels of oil per day. That’s an impressive achievement for a landlocked enclave that started exploring only a decade ago. The region’s potential is greater still, though it faces political, military and economic challenges to expanding its output. 1. Why does the Kurdish region matter to oil markets? The semi-autonomous Kurdistan Regional Government says the area’s reserves could total 45 billion barrels, more than Nigeria’s, and Kurdish crude is generally cheap to extract. When foreign investors tramped into the region’s oil fields after the fall of Saddam Hussein’s regime, the crude was so abundant it seeped from the ground beneath their feet. Tony Hayward, former BP Plc boss turned wildcatter, called Iraqi Kurdistan “one of the last great frontiers” in the oil […]

Saudi oil min says no ‘free rides’ for non-OPEC producers

8 Mar 2017   Saudi Arabia

Saudi Oil Minister Khalid al-Falih said on Tuesday that oil market fundamentals were improving as an agreement to curb supply by OPEC and non-OPEC producers took effect. But he said the Organization for the Petroleum Exporting Countries would not let rival producers take advantage of the cuts to underwrite their own production investments. The group is expected to meet again in May, when it could consider extending the production curbs. Saudi Arabia had cut beyond what it had pledged in the agreement and brought the kingdom’s output below 10 million barrels per day, he said. “We should not get ahead of the market,” Falih told a group of oil industry executives at the CERAWeek energy conference. Overall, he said the production reductions have had their intended effect, citing greater price […]

Burning less oil at home will help Saudi exports and Aramco IPO

8 Mar 2017   Saudi Arabia

Saudi Arabia is likely to reduce the amount of oil it burns to generate power this summer as the kingdom hikes domestic energy prices and uses more natural gas in power stations, industry sources said. Burning less crude at home means the world’s top oil exporter may not need to push output to the record high of 10.67 million barrels per day (bpd) reached in July last year, even if the Organization of the Petroleum Exporting Countries and other producers end supply curbs in June. It may also make the sale of a 5 percent stake in Saudi Aramco more attractive to investors because the national energy giant will have more crude to export, if needed, and can sell fuel at higher prices […]

Saudi Energy Minister Says OPEC Will Remain Stabilizing Force for Oil Prices

8 Mar 2017   OPEC, Saudi Arabia

Saudi Arabia’s energy minister said Tuesday that the Organization of the Petroleum Exporting Countries will continue to be the world’s “only catalyst” for stabilizing oil prices, but he warned that the group won’t take steps to bail out the market. Investors should not fall prey to “wishful thinking that OPEC or the kingdom will underwrite the investments of others at our own expense and long-term interests,” Khalid al-Falih…

As Trump Makes Threats, Iran Makes Friends

8 Mar 2017   Iran, USA

The Islamic Republic is expanding its reach and raising questions over U.S. ambitions to contain the country. Nigerian carpenter Bashir Muhammad has never been to Iran, but he would fight to the death for the country. “If Iran wants our help, we are ready to go and help it, even with our blood,” he said. “Donald Trump needs to know that Iran has followers all over the world ready to help defend it against America.” Touring the narrow unpaved streets of Zaria in Nigeria’s predominantly Muslim north, Muhammad shows Iran’s success in building enclaves of fervent support way beyond the Middle East and the limits of any harsher foreign policy planned by the U.S. president to contain […]

Saudi Aramco to Pay Royal Dutch Shell $2.2 Billion in Motiva Breakup

State-oil giant Saudi Arabian Oil Co. will pay Royal Dutch Shell PLC $2.2 billion to finalize the breakup of their two-decade Motiva Enterprises refining partnership in the U.S. The deal gives Saudi Arabia sole control over the largest refinery in the U.S., a 600,000-barrels-a-day facility in Port Arthur, Texas. The Saudi state oil company, known as Aramco, will take full ownership of the Motiva Enterprises LLC name and legal entity….