Middle East

Kuwaiti official says OPEC-led production cuts not working

23 Jun 2017   Kuwait, OPEC

A multilateral effort to ease global oil supply-side strains on the market hasn’t worked as designed, a Kuwaiti official said Thursday. Photo by Oskari Porkka/Shutterstock June 22 (UPI) — The multilateral effort to bring the global energy market back to a balance between supply and demand has fallen short, an exporter told a Kuwaiti news agency. Members of the Organization of Petroleum Exporting Countries and a handful of other producers, notably Russia, started implementing a deal in January to ease the supply-side strains that weighed on oil prices last year through coordinated declines in production. In May, parties to the agreement decided to extend the terms by three months longer than originally planned, to March 2018. Market analysts were anticipating deeper cuts and crude oil prices have been on a steady decline since the start of June. Mohammed al-Shatti, a deputy chairman of the Kuwait Petroleum Corp., told the […]

House of Saud unites behind king’s son – for now

23 Jun 2017   Saudi Arabia

The elevation of Mohammed bin Salman as Crown Prince of Saudi Arabia has ended two years of speculation about a behind-the-scenes rivalry near the pinnacle of royal power, but he still has to win over powerful relatives, clerics and tribesmen. The 31-year-old favored son of King Salman was already in effect the day-to-day ruler, with sweeping powers over defense, energy and the economy, even though his cousin Prince Mohammed bin Nayef, 57, occupied the more senior job as crown prince. For two years the meteoric rise of Mohammed bin Salman stirred talk of strains and competition between the two princes, both known by their initials as MbS and MbN. That all ended on Wednesday when the Al Saud […]

Saudi Reshuffle Could Completely Shake Up Oil Markets

23 Jun 2017   Saudi Arabia

The power restructuring in Saudi Arabia this week led to the elevation of 31-year-old Mohammed bin Salman to crown prince, essentially ensuring that he will become the youngest king of Saudi Arabia in the not-too-distant future. The heir apparent has already been effectively running the country for the past few years, so the move was not entirely a shock. Nevertheless, the effects on the oil market could be profound. The new crown prince is known to be a bit unpredictable . In the early phase of the oil price meltdown, he said that prices did not matter. But the plunge below $30 per barrel in early 2016 seemed to have changed the calculus. Last year Saudi Arabia became the principle driver behind a return to “market management,” that is restraining output to stabilize prices. With the OPEC production cuts – which have had to be extended from six to […]

What Does Bin Salman’s Rise Mean For Oil?

23 Jun 2017   Saudi Arabia

The architect of Saudi Arabia’s Vision 2030 plan is now next in line to the throne, the Saudi Press Agency announced on Wednesday, paving the way for the 31-year-old nobleman to forward an assertive regional foreign policy and a much-needed economic overhaul. Prince Mohammed bin Salman, King Salman’s young son, replaced Prince Mohammed bin Nayef, the monarch’s 57-year-old nephew, as heir – signaling the rising tide of a new generation of the Saudi ruling class. The shift was approved by 31 of 34 members of the Allegiance Council, made up of the royal family’s most elite members. The new crown prince has handled the KSA’s two biggest conundrums in recent years: the war against Shiite Houthis in Yemen and the overhaul of an oil-dependent economy. “His ability to deliver on both fronts is still highly uncertain, as the country’s authorities are attempting to implement several generations’ worth of reforms […]

Iran starts gas exports to Iraq, Iranian official tells IRNA

22 Jun 2017   Iran, Iraq

Iran has begun exporting gas to Iraq, an Iranian official told the state-run Islamic Republic News Agency (IRNA) on Wednesday, after a several years of delays. The neighbors, both members of the Organization of the Petroleum Exporting Countries, initially signed a deal in 2013 for Iran to supply Iraqi power stations, but officials in the past blamed poor security in Iraq for hampering implementation. Exports had started at approximately 7 million cubic meters per day and would eventually reach up to 35 million cubic meters per day, Amir Hossein Zamaninia, the deputy oil minister for trade and international affairs, told IRNA. Iran signed two contracts to export gas, one for the Iraqi capital Baghdad and the other for southern Iraqi city of […]

Iran says OPEC considering deeper output cuts, delegates skeptical

22 Jun 2017   Iran, OPEC

Iran’s Oil Minister Bijan Zanganeh talks to journalists before the beginning of a meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, May 25, 2017. OPEC members are considering further oil output cuts but should wait until the effect of the current reduced level of production is made clear, Iran said on Wednesday, hinting at possible further OPEC action after oil sank to a seven-month low. OPEC and allied outside producers agreed on May 25 to extend an existing supply cut into 2018, but oil has declined sharply since on rising production from the United States and Nigeria and Libya, two OPEC members exempt from cutting output. “We are in discussions with OPEC members to prepare ourselves for a new decision,” Iranian oil minister Bijan Zanganeh said after a cabinet meeting, according to the website for the Islamic Republic of Iran Broadcasting (IRIB). “But making […]

Iran: Production cuts difficult for OPEC members

22 Jun 2017   Iran, OPEC

Cutting back on production levels is a difficult task for members of the Organization of Petroleum Exporting Countries, Iran’s oil minister said Wednesday. Iran ranks third among OPEC member states in terms of proven crude oil reserves. Production has been more or less steady since the fourth quarter of 2016 at 3.7 million barrels per day, though that’s up about 8 percent from 2016. While other OPEC members are cutting output in a coordinated effort to balance the market, Iran can increase production as it works to recapture a market share lost to global sanctions. Speaking from Tehran, Oil Minister Bijan Zanganeh said his country was in talks with other OPEC members on current market conditions. With a steady gain in […]

Kemp: Saudi Arabia Eases Austerity Just As Oil Prices Decline

22 Jun 2017   Saudi Arabia

Saudi Arabia’s decision to reverse some of last year’s austerity measures coincides with a renewed decline in oil prices and complicates the financial and economic outlook. (John Kemp is a Reuters market analyst. The views expressed are his own) LONDON, June 21 (Reuters) – Saudi Arabia’s decision to reverse some of last year’s austerity measures coincides with a renewed decline in oil prices and complicates the financial and economic outlook for the kingdom. All allowances, bonuses and financial benefits for civil servants and military personnel cancelled, amended or suspended in September 2016 have been restored and backdated by a royal decree issued by King Salman (“Saudi Arabia slashes ministers’ pay, cuts public sector bonuses”, Reuters, Sept. 26, 2016). The decision coincides with the alteration of the succession in favour of the king’s son Mohammad bin Salman and relieves the previous crown prince of all his posts. The distribution of […]

Oil Market Sees Increased Conflict Risk in Saudi Power Shift

22 Jun 2017   Saudi Arabia

New Crown Prince has taken confrontational stance against Iran More aggressive foreign policy won’t change oil plans: Sen After Mohammed bin Salman’s appointment as crown prince, energy markets need to brace for an even more assertive Saudi Arabian foreign policy that could threaten regional stability in the heart of the global oil industry. The 31-year-old has already supported the kingdom’s involvement in a war in Yemen and broken diplomatic ties with fellow OPEC member Qatar. Both moves were driven by a confrontational stance toward Iran, and MbS, as the prince is known, has already let the intensifying regional rivalry spill into oil policy — last year, he intervened to sink a deal to freeze production because Iran refused to participate. Nonetheless, his government will need higher crude prices to push ahead with his plans to reform the kingdom’s economy, and that makes an immediate change in oil policy unlikely. […]

Q&A: Nasraddin Sayid Sindi, Kurdistan’s disputed territories chief

22 Jun 2017   Iraq

The chairman of the General Board of Kurdistan Areas outside the Kurdistan Region Administration discusses efforts to hold the referendum in areas outside formal KRG control, and expectations of Iraqi security forces afterward. Nasraddin Sayid Sindi, the chairman of the General Board of Kurdistan Areas outside the Kurdistan Region Administration, in his office in Erbil on June 19, 2017. (RAWAZ TAHIR/Iraq Oil Report) ERBIL – Kurdistan Regional Government (KRG) officials have never been shy about their claims to territory outside its formal borders recognized by the federal government and United Nations. The KRG has for years deployed Peshmerga and other security forces in territory that falls within the provincial boundaries of Salahaddin, Diyala, Kirkuk and Ninewa provinces. In some of these areas, the KRG provides services like fuel and electricity and other administrative functions. This content is for registered users. Please login to continue. If you are not a […]

Federal crude flows to two northern Iraq refineries

22 Jun 2017   Iraq

Iraq has unlocked about 20,000 barrels per day (bpd) of refining capacity – a relatively small amount with outsize economic and political implications. The restart of the Qayarah refinery, south of Mosul, brings a small measure of much-needed economic development to an area recently devastated by years of occupation by the self proclaimed Islamic State (IS) militant group.

Total Pledges $1 Billion Investment in Iran Gas Field

21 Jun 2017   France, Iran

France’s Total SA said Tuesday it would push forward with a $1 billion investment this summer in a giant Iranian gas field, the first commitment by a Western company to put real money into the Islamic Republic’s re-emerging energy industry. The Paris-based oil giant has been at the forefront of Western energy companies looking to return to Iran after sanctions on its energy industry were lifted in January 2016. Total reached a preliminary agreement late last year with China National Petroleum Corp. and an Iranian company…

Saudis Overtake U.S. In Recoverable Oil Resources

21 Jun 2017   Saudi Arabia

Saudi Arabia has regained its top position ahead of the U.S. and Russia as the holder of the world’s biggest recoverable oil resources, as reduced tax rates for state giant Saudi Aramco have added 73 billion barrels of recoverable oil, Norway-based consultancy Rystad Energy said on Tuesday in its annual review of global recoverable oil resources. Saudi Arabia’s recoverable oil resources are now estimated at 276 billion barrels, Rystad said, adding that the Kingdom’s “ revised fiscal regime should incentivize more aggressive exploration and development drilling in the country.” In March this year, Saudi Arabia cut the tax rate on Aramco to 50 percent from 85 percent. The high tax rate was one of the main reasons why international industry experts had not been valuing Aramco nearly as high as the US$2 trillion that Saudi officials have been claiming. Back then, Rystad Energy said that the tax rate cut […]

In Hawija, IS poses ongoing threat to oil assets

21 Jun 2017   Iraq

The self-proclaimed Islamic State’s (IS) longstanding hold over Hawija, west of Kirkuk, is posing an ongoing security threat to the Bai Hassan oil field. IS militants in Hawija have been responsible for several recent attempts to bomb the field, which produces 175,000 barrel per day (bpd), according to security and oil industry officials in the greater Kirkuk area. 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 .

Saudi Arabia’s Mohammed bin Salman appointed Crown Prince: SPA

21 Jun 2017   Saudi Arabia

Saudi Crown Prince Mohammed bin Nayef has been relieved of his post and replaced by Deputy Crown Prince Mohammed bin Salman, a royal decree published by state news agency SPA reported. (Reporting by Stephen Kalin, Writing by William Maclean; Editing by Himani Sarkar)

Saudi King Salman Ousts Nephew as Crown Prince, Installs Son

21 Jun 2017   Saudi Arabia

Saudi Arabia’s King Salman named his son as the country’s new crown prince, the country’s state news agency said Wednesday, a move that carries far-reaching implications for the monarchy and the biggest economy in the Middle East. Saudi Arabia’s new crown prince, Mohammed bin Salman, known by his initials MbS, is seen as the architect of Saudi Arabia’s attempt to overhaul the kingdom’s oil-dependent economy and carve out a…

Why Is Saudi Arabia Desperate For Higher Oil Prices?

21 Jun 2017   Saudi Arabia

As OPEC’s most significant member and one of the largest crude oil producers in the world, Saudi Arabia typically exerts considerable power over global energy market trends. Yet for the last year, the oil giant has been largely reacting to events outside of its control: surging U.S. shale production, OPEC-member cheating and non-compliance, uncertain demand and a persistent supply glut that has kept prices at or below $50 a barrel. Now, questions are being raised over the state of Riyadh’s big next move: the IPO of Saudi Aramco, the world’s largest and most valuable oil company, which Crown Prince Mohammed bin Salman once projected as being worth $2 trillion. Analysts have doubted the veracity of the official Saudi estimate, with third-party valuations coming in much lower. The Financial Times has estimated the company to be worth between $880 billion and $1.1 trillion, while last March Bloomberg thought an IPO […]

Who Controls The Oil As Kurdish Independence Looms?

21 Jun 2017   Iraq

Kurdistan, the autonomous region of northern Iraq that is rich in oil resources and has proven an effective force against the spread of the Islamic State, has announced that it will hold an independence referendum on September 25 of this year, in order to determine whether the region will remain part of the Republic of Iraq or split off to form a new, independent state. Thus far, the official international support for the referendum has been minimal. On June 19, the European Union released a statement discouraging the Kurdish autonomous government from holding the referendum, joining the United Kingdom, United States, Turkey and Iraq in officially opposing the vote. But this hasn’t deterred Kurdish leaders, who say the vote will go forward no matter the resistance. The referendum will not declare an independent state, but rather determine whether Kurdistan will remain part of Iraq or eventually become independent, though […]

Oil Markets Unmoved By Brewing Conflict In The Middle East

20 Jun 2017   Middle East, Prices

The political standoff in the Middle East between Qatar and other powers in the Middle East enters its third week, and the conflict shows no signs of abating. On June 5, Saudi Arabia, Egypt, the UAE and Bahrain cut diplomatic ties with Qatar and also tried to close off entry to Qatar by land, sea and air. They argued that Qatar is a major funder of terrorism. U.S. President Donald Trump backed the move. “The nation of Qatar, unfortunately, has historically been a funder of terrorism at a very high level, and in the wake of that conference, nations came together and spoke to me about confronting Qatar over its behavior,” Trump said on June 9. “I decided, along with Secretary of State Rex Tillerson, our great generals and military people, the time had come to call on Qatar to end its funding — they have to end that […]

World Bank: Middle East conflicts impede climate and other objectives

20 Jun 2017   Middle East

Jordan one of the early movers on climate initiatives, though a World Bank report finds some regional crises are working against national efforts. File photo by Stephen Shaver/UPI. June 19 (UPI) — The economy of Jordan could grow on the back of green initiatives, but progress may be impeded by geopolitical shocks, a World Bank report found. An annual report on the Jordanian economy from the World Bank found shocks from crises in Syria and Iraq have stifled trade lines and pushed expansion to around 2 percent, compared with the World Bank’s estimate for the Middle East and North Africa of around 3.2 percent. Kanthan Shankar, the acting regional director at the bank, said climate and energy reforms envisioned by the Jordanian government could help offset some of the regional economic strains. “Such actions would spur job creation, reduce dependence on commodity imports, attract foreign direct investment and leverage […]

Iran expects contract developments with French major Total

20 Jun 2017   France, Iran

Iran is in the final stages of signing agreements with French energy company Total to develop parts of the giant South Pars field, Iran’s energy minister said. The French energy company, under pressure from Washington in the pre-sanctions era , was the source of Iranian frustration after showing a lack of progress in developing parts of the South Pars field in the Persian Gulf. With sanctions pressures easing in the wake of a multilateral nuclear deal, chairman and CEO Patrick Pouyanne said in February that future growth could come from projects in the Islamic republic. Total is among the major European energy companies moving into the Iranian energy sector with the recent signings of memoranda of understanding with its […]

Saudis Foil Attack By Unknown Enemy On Offshore Oil Field

20 Jun 2017   Saudi Arabia

After last week’s attack on several vessels in the Bab Al Mandab, Middle East offshore oil operations again have been hit. According to Saudi Arabia’s national news agency SPA an attack on a major offshore oil field has been prevented. Saudi military sources have reported that the Al Marjan offshore oilfield was attacked by three boats “bearing red and white flags”. Warning shots have been fired, one vessel has been captured, while two others have escaped on Friday. The Saudi military reported that the captured boat “was loaded with weapons for (a) subversive purpose.” No details were given by the Saudi officials on a possible group or country behind the attack. (Click to enlarge) The continuing remarks about a ‘red and white flag’ on the boats could however be a hint to a possible Qatari involvement, as the latter’s flag holds these colors. This would mean a direct military […]

Oil market fundamentals heading in right direction – Saudi’s Falih

20 Jun 2017   Saudi Arabia

File Photo – Saudi Energy Minister Khalid al-Falih attends a session of the St. Petersburg International Economic Forum (SPIEF), Russia, June 2, 2017. Saudi Energy Minister Khalid al-Falih said the oil market is heading in the right direction but still needs time to rebalance, the London-based newspaper Asharq al-Awsat reported on Monday. “In my opinion, market fundamentals are going in the right direction, but in light of the large surplus in stockpiles over the past years, the cut needs time to take effect,” he told the newspaper, referring to a global deal to curb oil production. “Current expectations indicate the market will rebalance in the fourth quarter of this year, taking into account an increase in shale oil production,” he said. Asked about the recent drop in oil prices, Falih said: “Markets determine prices but are themselves driven by unpredictable variables beyond the control of producing nations.” “Short-term volatility […]

Oil market fundamentals heading in right direction – Saudi’s Falih

19 Jun 2017   Prices, Saudi Arabia

File Photo – Saudi Energy Minister Khalid al-Falih attends a session of the St. Petersburg International Economic Forum (SPIEF), Russia, June 2, 2017. Saudi Energy Minister Khalid al-Falih said the oil market is heading in the right direction but still needs time to rebalance, the London-based newspaper Asharq al-Awsat reported on Monday. “In my opinion, market fundamentals are going in the right direction, but in light of the large surplus in stockpiles over the past years, the cut needs time to take effect,” he told the newspaper, referring to a global deal to curb oil production. “Current expectations indicate the market will rebalance in the fourth quarter of this year, taking into account an increase in shale oil production,” he said. Asked about the recent drop in oil prices, Falih said: “Markets determine prices but are themselves driven by unpredictable variables beyond the control of producing nations.” “Short-term volatility […]

Qatar won’t cut gas to UAE: Qatar Petroleum CEO

Saad al-Kaabi, chief executive of Qatar Petroleum, gestures during a news conference in Doha, Qatar, December 11, 2016. Qatar will not cut off gas to the United Arab Emirates despite a diplomatic dispute and a “force majeure” clause in its contract, the chief executive of Qatar Petroleum told Al Jazeera network, two weeks after some Gulf Arab states severed ties with Doha. CEO Saad al-Kaabi said that although there was a “force majeure” clause in the agreement on the Dolphin gas pipeline, which links Qatar’s giant North Field with the UAE, Qatar would not stop supplies for other reasons. “The siege we have today is a force majeure and we could close the gas pipeline to the UAE,” he said. “But if we cut the gas, it does great harm to the UAE and the people of the UAE, who are considered like brothers … we decided not to […]

Iran sees gas deal with Total within weeks: minister

Iran expects to sign a long-delayed gas deal with French oil major Total ( TOTF.PA ) in the next few weeks, Iranian Oil Minister Bijan Zanganeh was quoted as saying on Saturday. “Iran and Total are summing up the discussions on signing the contract for the development of phase 11 of South Pars, and this is almost in the final stages,” said Zanganeh, quoted by the oil ministry’s news website SHANA. “The contract … will be signed before the end of the (current) government,” Zanganeh said. Re-elected in May, President Hassan Rouhani is expected to form his new cabinet in August. Total’s chief executive Patrick Pouyanne said in late May that the company planned to conclude the South Pars gas deal before […]

Are Russia And The Saudis Planning A Natural Gas Cartel?

The fledgling production cut strategy of OPEC (Saudi Arabia) and non-OPEC (Russia and the FSU) shows that a new strategy is needed to counter the ongoing doubts in the markets. At the same time, Russia and Saudi continue to give indications of a possible OPEC 2.0 scenario, in which a possible Russian membership is on the table. This would confront the market with a renewed and stronger oil cartel, although the overall strategies need to be adjusted. At the same time, Saudi Arabia, via its oil giant Aramco has openly stated to be interested in global gas investment opportunities, starting in Russia’s Siberian region. While the media still looks at the current discussions as a pure crude oil cooperation strategy, some see another development on the horizon. The real power of OPEC, non-OPEC cooperation would increase if they would not only include a crude oil production cut, but also […]

Gulf Showdown Exposes Qatar’s Fragility

17 Jun 2017   Qatar

At her new exhibition in Doha, Qatari artist Maryam Al-Semaitt explained to guests the central message of her latest work: what happens when great wealth is taken for granted. That money, mainly from selling natural gas from a peninsula in the Gulf desert that was a British protectorate until 1971, has paid for the city’s skyscrapers, hotels and investments in some of the world’s most iconic companies, buildings and sports teams. What it can’t do, she said, is provide a shield for what’s now the world’s richest nation. The showdown with Gulf neighbors Saudi Arabia and the United Arab Emirates has exposed the precarious position of Qatar. The soft power of the multi-billion-dollar Qatar brand that was meant to protect it has never looked more fragile. Doha’s isolation, cutting it off from diplomatic and transport links, is heading into a third week. “The fact that we have always taken […]

World Bank: Persian Gulf economies growing, but face considerable risk

17 Jun 2017   Qatar

Geopolitical risks, as well as U.S. economic and energy sector influences, could undercut growth for Persian Gulf countries, the World Bank said. A World Bank report on the economies for members of the Gulf Cooperation Council finds aggregate growth expands from 1.3 percent this year to 2.6 percent in 2019. A regional economic report, the first for the bank, said oil prices should hold steady and support growth in the region, but nowhere near the levels from 2014, when the global benchmark for the price of oil, Brent, was more than twice the current level. Nadir Mohammed, the GCC director at the World Bank, said some energy market recovery is supporting regional growth with the help of improvements in the non-oil […]

Yemen War Threatens Crucial Oil Chokepoint

16 Jun 2017   Yemen

The Bab al-Mandan strait, which facilitates the transfer of 4 million barrels of oil to Middle Eastern markets everyday, has become increasingly contentious over the past few weeks as an international navel coalition grows its presence in the area. “Recent attacks against merchant shipping in the Gulf of Aden and Bab Al Mandeb have highlighted that there are still risks associated with transits through these waters,” the leadership of the Combined Maritime Forces, which boasts vessels from 31 nations, said on Monday. The U.S.-led group is based in Bahrain and guards the Gulf of Aden. In early June, unidentified forces attacked a Marshall Islands-flagged tanker from a vessel disguised as a fishing boat. Three grenades later, no member of the tanker’s crew suffered any injuries and it continued its voyage into the Red Sea. In January, Houthi rebels, backed by Iran, attacked a Saudi frigate in waters near Yemen. […]

Iraq Dethrones Saudi Arabia As India’s No.1 Oil Supplier

16 Jun 2017   India, Iraq

Iraq has been India’s largest supplier of crude oil for the last three months, shipping data from Bloomberg has revealed . This means that OPEC’s number-two has dethroned the cartel’s leader—Saudi Arabia—which has been the top supplier in the world’s fastest-growing market in terms of oil consumption. Iraq produced almost a quarter of the oil India imported last month, or 23 percent, exporting at a daily rate of 1 million barrels. That is compared to a monthly average export market share of 19 percent for the prior four months. Saudi Arabia, on the other hand, supplied 17 percent of the crude India bought in May. Iraq has consistently shown signs of an expansion strategy for its oil industry, despite its participation in the OPEC agreement for oil output reduction. While Iraq has not been fully compliant to the production caps, Saudi Arabia has been over-compliant—a fact that contributed to […]

Saudi Arabia’s oil exports seen below 7 million bpd in summer: sources, data

15 Jun 2017   Saudi Arabia

Saudi Arabia’s crude exports are expected to fall below 7 million barrels per day this summer, according to industry sources familiar with the matter, and shipping data so far supports those figures. Saudi Energy Minister Khalid al-Falih said in May shipments were set to drop from June, particularly to the United States, as the top OPEC producer aims to limit supply to help balance the market. Exports in May, when the kingdom’s total production was 9.880 million bpd, averaged below 7 million bpd, three industry and shipping sources told Reuters. Early indications suggest that remains the case this month, one of the sources said. “I’m only looking at the first week of June, and on the face of it there’s not much change,” said Roy Mason of Oil Movements, a UK-based firm that estimates supply by tracking tanker shipments. Indicating lower Saudi exports, he said tanker movements suggested […]

Saudi Aramco IPO Plans Slowed Over Where to List

15 Jun 2017   Saudi Arabia

A divide between Saudi Arabia’s ruling family and executives of the kingdom’s oil company over where to list the company’s shares is slowing the march toward a planned 2018 initial public offering, according to people familiar with the matter. Executives at Saudi Arabian Oil Co., known as Saudi Aramco, are pushing Saudi Arabia’s king and his son, Deputy Crown Prince Mohammed bin Salman, on the merits of listing the state-owned oil company on the London Stock Exchange. Executives believe that listing in the U.S. would…

Qatar Spat Spills Over To Libya’s Oil, Rekindles Political Divides

15 Jun 2017   Libya, Qatar

Just as Libya’s National Oil Corporation (NOC) is targeting to raise crude oil output to 1 million bpd by the end of July, the rivaling factions in the east and west of the country have entered into a fresh dispute over Libya’s crude oil sales after several Arab states cut ties with Qatar last week. In the east, the military commander is supported by Saudi Arabia, the United Arab Emirates (UAE), and Egypt—three of the Arab states that severed ties with Qatar, accusing it of sponsoring terrorism and destabilizing the region. According to Bloomberg, the chairman of the eastern NOC in Libya, Nagi al-Maghrabi, has accused Qatar of using its 8.5-percent stake in commodity trader Glencore to control the Swiss trader’s sales of Libyan crude oil. Authorities in eastern Libya have threatened to block Glencore operations, which could potentially reduce (again) Libya’s output and threaten its tentative recovery. Earlier […]

How The Qatar Crisis Is Shaping The Future Of The Region

15 Jun 2017   Qatar

GCC-member Qatar has been confronted by a concerted diplomatic and economic effort from its former Arab allies, led by Saudi Arabia, UAE, and non-GCC member, Egypt. The official cause of this rift appears to be statements made by the Emir of Qatar criticizing growing U.S.-Saudi military cooperation and their anti-Iran positions. The Qatar News Agency quoted the Emir as saying, “ There is no wisdom in harboring hostility towards Iran.” Qatar quickly denounced the statement, suggesting that the Qatar News Agency had fallen victim to a cyberattack. This claim did not prevent the GCC countries and Egypt from coming together to jointly accuse Qatar of supporting terrorism and destabilizing the region. The crisis has been brewing for some time. In 2014, another diplomatic breakdown between the same players led to the withdrawal of ambassadors from Doha. During that time, Doha was accused of having links to the Muslim Brotherhood […]

Chicken farm explosion reveals oil smuggling racket

15 Jun 2017   Iraq

Iraqi authorities are seeking the arrest of a Badr Organization paramilitary commander for allegedly overseeing a prolonged oil smuggling operation south of Kirkuk.”The investigative judge of Kirkuk has issued a warrant for the person in charge of the Badr Organization in Taza sub-district, for his involvement in oil smuggling and the damage he has caused to the national economy,” a security official in Kirkuk said.Ahmed Askari, the head of the Kirkuk Provincial Council Energy Committee,… 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 […]

Analysis: LNG trade disruption worries ease as Qatari flows to Suez, Egypt resume

14 Jun 2017   Qatar
Analysis: LNG trade disruption worries ease as Qatari flows to Suez, Egypt resume

Singapore (Platts)–13 Jun 2017 719 am EDT/1119 GMT

* Qatargas vessels transit Suez for Ras Laffan

* Egypt gets Qatar LNG despite blockade
* Limited impact of UAE’s port restrictions
* Qatar Petroleum: “business as usual”

Concerns over the impact of diplomatic blockade on Qatar on LNG trade flows eased this week, following deliveries of Qatari LNG into Egypt and the transiting of several Qatari vessels through the Suez Canal, a key transport route for Middle East LNG shipments to the European markets.  This came as a relief to LNG traders, who were caught off guard last week when two Qatari cargoes destined for the UK via the Suez Canal turned around off the coast of Yemen and diverted towards South Africa’s Cape of Good Hope, raising fears Egypt might have restricted access to the waterway.  Market experts, however, argued the diversion was likely a move by the Qatari government to avoid transiting the Suez Canal and paying US dollar-denominated canal fees to Egypt, among those to have cut diplomatic ties with Qatar.

Chart: Qatari LNG exports in 2016

“It was likely Qatar’s decision to turn away the two cargoes rather than Egypt’s,” said an Atlantic-based LNG trader.

Asian refiners receive full Saudi crude oil allocations for July

14 Jun 2017   Saudi Arabia

Saudi Aramco’s major buyers in Asia are receiving full allocations for Saudi crude oil loading in July, with some Japanese refiners even getting higher volumes, according to market sources. Traders at several key Asian end-users said their July nominations were met and they were not aware of cuts to any refiners in the region. At least two traders with two Japanese refiners said they had received incremental volumes, with one even getting “slightly more Arab Extra Light.” A Singapore-based crude trader with a North Asian refiner said that there were some adjustments to the allocation but “overall, the volume was the same.” Article continues below… Platts Fujairah Oil Inventory Storage Data S&P Global Platts is exclusively publishing weekly oil inventory data for the Fujairah Oil Industry Zone, including an aggregate breakdown of heavy distillates and residues, middle distillates, and light distillates. The data is now freely available to access […]

Op-Ed: $1 Trillion on the Line, and Saudi Aramco IPO Riddled with Risk

14 Jun 2017   Saudi Arabia

One trillion dollars, one trillion problems: Saudi Aramco weighs which exchange is worth the gamble for its IPO. Around the world, investment bankers rub their hands together, giddy with visions of barrels full of cash accompanying Saudi Arabian Oil Co.’s initial public offering (IPO). But first things first. Saudi Arabia’s decision of where the kingdom will place Saudi Aramco’s record-shattering IPO – expected to value the company up to $1 trillion – remains unclear. A year ago, it would’ve been a diplomatic snub for Saudi to list anywhere but on the New York Stock Exchange. But as the company grapples with a far more stringent U.S. reporting environment than seen in the Middle East, the Aramco IPO’s place in New York becomes less certain. And beyond the transparency laws, the United States’ litigation-heavy culture could make New York the most perilous place in the world for Saudi Aramco to […]

Saudis Cut Oil Exports to U.S. to Ease Global Glut

14 Jun 2017   Saudi Arabia

Saudi Arabia is slashing its U.S. oil exports to a nearly three-decade low for this time of the year, intensifying its efforts to reduce a global supply glut that has been pummeling crude prices. State-owned Saudi Arabian Oil Co. expects sales to the U.S. will drop below 1 million barrels a day in June, then slide to about 850,000 barrels a day in July, according to people familiar with the matter. The July figure would be its lowest…

Putin’s Newest Oil Play: Russia Gains Foothold In Iraqi Oil Patch

14 Jun 2017   Kurdistan, Russia

The Kurds of Iraq are going through one of their most tumultuous periods of history. On the verge of finally seeing the much-heralded independence referendum, through Erbil is doing everything it can to stay financially afloat, squash the Islamic State and expand its oil sector – and it is a pretty thin line to walk with all the events going on simultaneously. The latest developments in Kurdish-Russian relations might be indicative of even deeper cooperation and convergence between the two nations, as new petroleum deals will inevitably have political ramifications. Rosneft and Gazprom Neft, Russia’s leading state-owned oil companies, seem very intent on increasing their presence in Kurdistan, with the former walking an extra mile by venturing into Kurdistan’s infrastructure segment. The KRG (Kurdistan Regional Government)-Rosneft pre-payment deal, signed this February, has successfully laid the groundwork for future rapprochement. Under the conditions of the deal, Rosneft is reported to […]

Kurdish Oil: The Two Biggest Threats

14 Jun 2017   Iraq

As the Kurdistan Regional Government (KRG) seeks to restore pre-2014 levels of attractiveness to its energy sector from an investment standpoint, it grapples with several key challenges. Chief among these are its efforts to safeguard the strategic assets and operations of International Oil Companies (IOCs). Of course, it is not uncommon for businesses with operations in emerging and frontier markets to be cognisant of weak security conditions that could disrupt project viability. But that being said, the KRG has faced an uptick in violence and is prone to the advances of Sunni militant groups in particular. This analysis explores the threat presented by ISIS and the PKK, by looking at what impact they have had on the oil sector, as well as the role they may yet play. Moreover, it builds on a report released by Shadow Governance earlier this month, detailing the dynamics and drivers of the Kurdish […]

Iran Aims To Develop Its Largest Oil Field

13 Jun 2017   Iran

One of Iran’s top energy priorities this year would be developing onshore and offshore oil fields that it shares with neighboring countries, the official Islamic Republic News Agency (IRNA) quoted deputy oil minister Ali Kardar as saying on Monday. The official named South Pars phase 11 (oil layer) and the Azadegan oil field as priority developments, and Iran hopes to sign contracts for them by the end of the current Iranian year, through March 20, 2018. “The fields are on priority list and the Ministry of Petroleum emphasizes their development, as they are shared fields,” IRNA quoted Kardar as saying. According to the official news agency, the official also noted that new oil contracts worth US$15 billion would be signed with international companies by the end of the Iranian year. While Iran was under the Western sanctions, its neighbors developed their parts of the shared fields with the help […]

Flying Cows to Qatar Is One Man’s Way to Beat the Saudis

13 Jun 2017   Qatar

Call it the biggest bovine airlift in history. The showdown between Qatar and its neighbors has disrupted trade, split families and threatened to alter long-standing geopolitical alliances. It’s also prompted one Qatari businessman to fly 4,000 cows to the Gulf desert in an act of resistance and opportunity to fill the void left by a collapse in the supply of fresh milk. It will take as many as 60 flights for Qatar Airways to deliver the 590-kilogram beasts that Moutaz Al Khayyat, chairman of Power International Holding, bought in Australia and the U.S. “This is the time to work for Qatar,” he said. Photographer: Brent Lewin Led by Saudi Arabia, Qatar stands accused of supporting Islamic militants, charges the sheikhdom has repeatedly denied. The isolation that started on June 5 has forced the world’s richest country by capita to open new trade routes to import food, building materials and […]

Qatar crisis to speed the rise of Asia’s spot LNG trade

13 Jun 2017   Qatar

Qatar’s isolation by other Arab nations has dealt a strong hand to Japanese utilities in talks reviewing long-term gas contracts with the top LNG exporter, likely accelerating a shift to a more openly traded global market for the fuel. If Japan gets its way in the periodic contract review, the world’s biggest buyer of LNG would have to import more short-notice supplies from producers such as the United States, another step away from rigid deals that run for decades towards a more active spot market. At stake for Qatar are 7.2 million tonnes of annual liquefied natural gas (LNG) sold in contracts that expire in 2021. The $2.8 billion a year in gas mostly goes to Japan’s JERA, a joint venture between Tokyo Electric […]

Saudis accelerate plans for renewable energy

13 Jun 2017   Saudi Arabia

President of the OPEC Conference and Saudi Arabian Energy, Industry and Mineral Resources Minister Khalid Al-Falih speaks during a news conference at OPEC headquarters in Vienna, Austria, on May 25. Photo by Lisi Niesner/EPA June 12 (UPI) — The Saudi government is making good on its pledge to introduce solar and wind power into the kingdom’s energy mix so that renewable energy becomes a growing part of the feedstock for the country’s electricity generation. This will free up more of the Gulf country’s crude products and natural gas for export sales. In April, Riyadh announced the names of 51 companies, primarily foreign, that have been shortlisted for two renewable energy projects: 27 firms were selected to bid on a 300 megawatt solar project to be developed in the northern part of the kingdom and 24 firms were chosen to vie for a 400 MW wind farm project in the […]

Iran prioritizes development of shared oil fields

13 Jun 2017   Iran

Iran aims to prioritize the development of the oil and gas fields that straddle the land and maritime borders with its neighbors. File photo by Maryam Rahmanian/UPI June 12 (UPI) — Tapping into the oil reservoirs straddling Iran’s land and maritime borders are among the top priorities for the year, a deputy minister said. Ali Kardar, the deputy petroleum minister, said neighboring Iraq and Qatar have extracted oil and gas reserves with the help of multinational energy companies and Iran is looking to replicate that success . Iran shares borders with Iraq in the Azadegan oil field and with Qatar in the South Pars oil and gas complex in the Persian Gulf. “The fields are on priority list and the Ministry of Petroleum emphasizes their development,” the deputy minister told the official Islamic Republic News Agency. Highlighting the Azadegan prospect has been commonplace for Iran as it looks to […]

Qatar remains committed to oil supply cut deal: minister

12 Jun 2017   Qatar

OPEC President Qatar’s Energy Minister Mohammed bin Saleh al-Sada addresses a news conference after a meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, November 30, 2016. REUTERS/Heinz-Peter Bader Qatar’s energy minister said on Sunday Qatar remained committed to an oil output cut deal agreed upon by OPEC and non-OPEC producers last month. Mohammed al-Sada said in a statement “circumstances in the region shall not prevent the state of Qatar from honoring its international commitment of cutting its oil production.” (Reporting by Rania El Gamal; editing by Jason Neely)

Saudi Arabia says oil inventory drawdown to accelerate in coming three to four months

12 Jun 2017   Saudi Arabia

Saudi Arabia’s Energy Minister Khalid al-Falih, talks to journalists before the beginning of a meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, May 25, 2017. A drawdown in crude oil inventories will accelerate in the next three to four months, Saudi Arabian Energy Minister Khalid al-Falih said on Sunday. Falih, speaking to reporters in the Kazakh capital of Astana, also said Saudi Arabia planned to grow exports to the United States in the long-term. “The U.S. market will always be key (to us), in the long term we will continue and grow exports to the Unites States, today the United States is well supplied,” Falih told a briefing. (Reporting by Olzhas Auyezov; writing by Maria Kiselyova; editing by Jack Stubbs)

Gulf Mediator Says Qatar ‘Ready to Understand’ Region’s Concerns

12 Jun 2017   Qatar

Kuwaiti minister says his country to continue mediation effort Saudi-led alliance cut ties and transport links with Qatar Gulf crisis mediator Kuwait said on Sunday that isolated Qatar was “ready to understand” the concerns of its neighbors and bolster stability in the region, in a sign that the week-old spat may be easing. Kuwaiti Foreign Minister Sheikh Sabah Al-Hamad Al-Sabah said his country would not abandon mediation efforts until the impasse was resolved, the state-run KUNA news agency reported. Qatari leaders are “willing to hold dialogue” to end the crisis, he said. Anwar Gargash, the United Arab Emirates’ minister of state for foreign affairs, retweeted the Kuwaiti remarks from France 24, and then added in a separate message: “Is this the beginning in which wisdom and reason prevail? I hope so.” Saudi Arabia, the U.A.E., Bahrain and Egypt last week cut diplomatic relations and transport links with Qatar, saying […]