Showing posts with label Iranian Oil. Show all posts
Showing posts with label Iranian Oil. Show all posts

Friday, January 15, 2016

Saudi Arabia ready to tolerate low oil prices to $ 10 a barrel for sake of market share.


Saudi Arabia ready to tolerate low oil prices to $ 10 a barrel for sake of market share. (Taz).

Saudi Arabia is ready to tolerate the low oil prices to preserve its market share and displace the US from the market, Talgat Mamyrayymov, the former head of the Real politik analytical service, independent political analyst from Kazakhstan, told Trend.

He said that oil prices are falling for objective reasons.

"First, Iran will soon enter the market,” he said. “Second, Saudi Arabia said that it is ready to tolerate a price of $10 per barrel. Saudi Arabia seeks to find its niche on the market and press the US shale oil suppliers."

He said that oil prices continue falling and can reach up to $10-15 per barrel, adding that big oil players intend to leave the oil business and count on alternative energy sources.

"Thus, the games on the stock markets will not be in favor of the oil market because the major Western capital is beginning to leave it," he said.

According to the forecasts of the US Energy Information Administration (EIA), the average price of North Sea Brent oil will reach $40 per barrel in 2016 and $50 per barrel - in 2017. The EIA forecasts the average price on the US WTI oil at $38.54 per barrel in 2016 and $47 per barrel - in 2017. Hmmm......What will happen to those countries selling low quality crude Oil?

Tuesday, January 12, 2016

OPEC waiting for US oil companies’ bankruptcy, then cut production and raise prices.


OPEC waiting for US oil companies’ bankruptcy, then cut production and raise prices. (Taz).

OPEC will cut crude production and export in order to raise oil prices, after the US companies extracting hydrocarbons go bankrupt due to the current low energy prices, said Alexander Razuvayev, economist and director of the analytical department at Russian company Alpari.

Alpari is one of the leading companies offering forex trading in Russia.

"The price war will end sooner or later,” he told Trend Jan. 11. “We can expect positive changes this year. As a result of falling oil prices, budgets are running out, shale companies go bankrupt. Those, who survive the crisis, will take the new position on the market at comfortable prices."

He said that none of the largest oil producers will be able to work at current low prices for a long time.

Razuvayev believes that the current conflict between Saudi Arabia and Iran is unlikely to impact the world oil prices.

“There won’t be a massive clash between the parties,” Razuvayev said. “Iran has just been released from the sanctions. Saudi Arabia is weaker than Iran militarily. The sides do not need a war." Read the full story here.

Related:   Shale Producer Gets $1.4 billion Wall St. Help in Re-Arming for OPEC War

Thursday, January 7, 2016

Oil prices will rise in case of Riyadh-Tehran conflict turns into a military confrontation.


Oil prices could rise in case of Saudi Arabia-Iran hot conflict. (Taz).

Supplies continue to exceed demands on the world hydrocarbon market, Valentyn Zemlyansky, the director of energy programs at the Center of World Economy and International Relations of Ukraine’s National Academy of Sciences, told Trend Jan. 6.

The oil price growth is not expected in the short term,” he said.

The expert said that the oil price can increase on the world market if Saudi Arabia-Iran conflict deteriorates.

He did not rule out the possibility that Riyadh-Tehran conflict can turn into a military confrontation.

"The world economy is in a serious crisis,” he said. “This is the first sign of a possible big conflict."

Iran produces 2.8 million barrels of oil per day and exports 1.1 million barrels of this volume per day.
Saudi Arabia produces more than 10 million barrels of oil daily and exports more than seven million barrels per day.

Relations between Saudi Arabia and Iran soured after execution of Nimr al-Nimr, a prominent Shia cleric, by the Kingdom along with other 46 people, which was followed by a strong protest from Iran.

Iranian Kharg Terminal is getting ready to receive big tankers, once the sanctions on Iran are lifted.
Right now nine tankers can simultaneously berth at Kharg Terminal, which is able to receive giant tankers with 360 barrels capacity, Qolamhossein Gerami, an official with Iran’s Oil Terminals Company said.

Referring to Kharg as the biggest oil terminal in Iran, he said the terminal is currently responsible for letting through 94 percent of Iran’s exported oil, Mehr news agency reported January 6.

Oil is pumped through five pipelines to the terminal and stored in reservoirs as big as one million barrels, he explained.

He said the terminal is able to store 28 million barrels of oil, both light and heavy.

At the eastern terminal, with a T pier, six tankers can birth at the same time and receive 67,500 barrels of oil per hour, the official further said.

The pier’s waterline is 21 meters and can serve tankers with capacities of 275 thousand metric tons, he noted.
According to the official, the western front can receive three tankers at a time and transfer 360 thousand barrels of oil in one hour.


The pier’s waterline is about 30 meters and is therefore able to serve the biggest tankers there is, he stated.

Any coordination within OPEC is highly unlikely amid the tensions between Iran and Saudi Arabia, Sam Barden, the director of Wimpole International, an energy market development company believes.

OPEC has no future what so ever. It does not fit the notion of a modern economy, and given current tensions between Iran and Saudi Arabia the likely hope of any coordination is zero,” Barden told Trend.


Over the past few days, the relations between Iran and Saudi Arabia deteriorated following the kingdom’s execution of a prominent Shia cleric Nimr al-Nimr on Jan. 2.

And then there's this:

First of all, the prices may increase in reaction for the potential threat of failures in supply of raw materials via the Strait of Hormuz, which is of strategic importance to the world market, through which one-third of the world’s maritime oil supplies pass. The northern coast of the strait belongs to Iran, the southern – to the United Arab Emirates, which have lowered the rank of its embassy in Tehran as a result of the recent conflict.

For temporary diversification and security of oil supplies to the world market, Iran can potentially start transportation through Azerbaijan, which has an extensive network of oil pipelines. Technically, Iran can deliver its oil to Baku via the Caspian Sea or railway with a view to its subsequent export via the Baku-Tbilisi-Ceyhan (BTC) pipeline with access to the Mediterranean Sea. However, the economy of such deliveries should be seriously studied, especially against the background of low global oil prices.
Thus, on one hand, a mess in the OPEC may lead to uncontrolled oil supplies to the global market, which would reduce oil prices to historic lows, 
on the other hand - the deliberate blocking or, at least, a threat of restrictions in the Strait of Hormuz with the further development of the conflict may cause an increase in oil futures prices.

Related:

On average, the “all-in,” breakeven cost for U.S. hydraulic shale is $65 per barrel, according to a study by Rystad Energy and Morgan Stanley Commodity Research.

Saturday, December 19, 2015

Global redistribution of oil market coming.


Global redistribution of oil market coming. (Taz). By Vagif Sharifov.

OPEC’s dumping oil prices, Saudi Arabia’s desire to constantly expand its market share, and expectations of coming of Iranian oil after removal of sanctions on Tehran, have forced the US to urgently take the historic decision to start exporting its own oil.

Experts have already reacted negatively to this news, saying that oil prices will fall significantly, at least, due to a psychological factor. However, the US itself doesn’t think so – the Department of Energy believes that by 2025 the price of Brent oil will reach $90.23 per barrel or only $0.18 per barrel less than if the export ban had been kept.

Greatest difficulties will be faced by the business in the domestic US market, where a limited supply of WTI will increase its value at oil refineries, leading to higher prices for gasoline, and dragging consumer price inflation in the economy. On the other hand, it will be easy for China, as it will be selling its consumer goods in the US for higher prices, while their prime costs being kept due to lack of a significant impact from WTI on the Brent oil price.

Meanwhile, Saudi Arabia - the main market player physically pressing the prices - is trying by all means to “pour” oil even to places where others have previously worked.

This, in turn, causes a conflict of interests with Russia, which, because of different prime costs, can’t afford such level of dumping in Europe, as Saudi Arabia does.

Apparently, this “overdumping” game will soon be joined by the US. By the way, the estimates presented by the US Department of Energy look at least strange against the backdrop of the fact that Iran expects the lifting of sanctions in Q1, 2016 in order to begin oil exports.

There is no doubt that Iran would offer its oil cheaper than the market price, pursuing the following objectives:
- to gain market share in the world as fast as possible;
- to fill its budget with money coming from oil exports as quickly as possible to use them for restoration of domestic market infrastructure, including the construction of new oil and gas pipelines.

The whole situation will lead to an unplanned meeting of OPEC in the first six months of 2016, where the countries will blame each other of deliberate glutting the market. But the decision will not be taken to cut the production because there will be the US oil on the market.

Any reduction in any direction will immediately lead to a decrease in a market share, despite the break-even point of the state budgets of Iran, Algeria, Iraq, Saudi Arabia and the UAE is rather less compared to the current oil price. Libya will be in the worst situation. Its state budget may be deficit-free only at the price of $207 per barrel.

The global redistribution of the oil market between Saudi Arabia and the US is obvious. OPEC ceased to be a locomotive. It became a purely commercial company making a profit regardless of anything. Many specialists believe that there is no need for the cartel any more.

Alberta’s Finance Minister once said that we need such a position when we would not listen to OPEC to decide how many schools we should build. If OPEC wanted, it could increase the prices, forgetting about the market share. It is always possible to restore as it was in 1973, when the cartel cut its production so that the price has risen from $3 to $12 per barrel.

Thursday, December 3, 2015

'We don't need permission' Iran won't wait to increase its oil output.


'We don't need permission' Iran won't wait to increase its oil output. (Taz).

Iran does not need permission to increase its oil production after the sanctions against are lifted, the Islamic Republic’s Oil Minister Bijan Namdar Zanganeh said.

He made the remarks while commenting on its recent letter to the Organization of the Petroleum Exporting Countries (OPEC), in which he asked the cartel to reduce production by at least 1.3 million barrels per day (mbpd), the oil ministry’s SHANA news agency reported Dec. 2.

Ahead of the upcoming OPEC meeting which is scheduled for Dec. 4, Zanganeh wrote a letter to OPEC chief Abdallah Salem el-Badri, saying that the cartel members should be committed to the ceiling level, which had been set at 30 mb/d.

Zanganeh said that he did not write the letter to the OPEC for approval. He added that the letter was written to remind OPEC about the commitments regarding the ceiling level as well as explaining Iran’s position.

The Iranian minister further said it is not the first letter that was sent to the organization members. He underlined that Iran was forced to exit the oil market illegally under the sanctions, emphasizing that Tehran doesn’t need any permission to return.

Tehran hopes to increase its oil production by 500,000 barrels per day immediately after the international sanctions’ removal.

Iran’s current oil production is estimated to be around 2.8 million barrels per day of which about one million barrels are exported.

One of the biggest mysteries in the oil market surrounds just how much oil Iran is hoarding at sea.

Iran claims it's not stockpiling oil in tankers in the Persian Gulf, but no one believes it. Up until recently, energy experts thought Iran's vessels held 30 million to 40 million barrels of oil.

But maritime surveillance firm Windward has harnessed sophisticated technology to determine Iran is actually hoarding 50 million barrels of oil. That's up nearly 150% from April 2014 when Windward started tracking this closely-watched metric.

It's important to remember the oil hiding at sea is ready to be shipped to a buyer -- likely in Asia -- at a moment's notice. It's already been pumped out of the ground, cleaned up and processed.

"Iran has been trying to downplay what they have in floating storage because they don't want those figures to spook the market," said Tamar Essner, an energy analyst at Nasdaq Advisory Services.

Platts said Iran is storing as many as 53 million barrels of oil and condensate at sea, up from a previous estimate of 40 million to 42 million.

"There's no real clarity in international oil data. It's got the precision of cutting your hair with a chain saw," said Kloza. Hmmm......We are heading to very interesting times. Fasten your seat belts.

Tuesday, December 1, 2015

Iranian Oil Minister urges OPEC to cut output.


Iranian Oil Minister urges OPEC to cut output. (Taz).

Iranian Oil Minister Bijan Namdar Zanganeh has asked the Organization of the Petroleum Exporting Countries (OPEC) to reduce production by at least 1.3 million barrels per day (mbpd).

Ahead of the upcoming OPEC meeting, Zanganeh has written a letter to OPEC chief Abdallah Salem el-Badri, announcing that the cartel members should be committed to the ceiling level, which had been set at 30 mb/d, Mehdi Asali, an Iranian oil ministry official said, Mehr news agency reported Dec. 1.


It is time for certain OPEC members to cut their output, ahead of lifting sanctions against Iran, said Zanganeh's letter.

Asali, who is Iranian oil ministry’s secretary for OPEC affairs and relations with energy organizations, said that the Iranian minister has informed the organization that Iran will revive its pre-sanction output and the OPEC members should open space for the Islamic Republic’s output.

Iran’s crude output and export was decreased by 4.2 mbpd and 2.6 mbpd as a result of the sanctions, the official said, adding Tehran will return to former output level as soon as sanctions are removed.

The OPEC members' total crude oil output has dropped by some 256,500 barrels per day to 31.382 mbpd in October compared to September, the organization said in its latest monthly report.

Iran increased crude oil production (excluding condensates) by 4,700 barrels per day in October, compared with the previous month. The country's oil output reached 2.874 mb/d per day.

Iran’s oil output was about 3.7 mb/d in 2011, Hmmmm........Drop it or else.......? Read the full story here.

Sunday, November 22, 2015

Iran intends to produce more oil but asks OPEC to stay within quota.


Iran intends to produce more oil but asks OPEC to stay within quota. (Taz).

Tehran has asked the 12-nation OPEC cartel of oil producers to cut its total oil production to stay within the daily quota, Iran's Oil Minister Bijan Zangeneh said Saturday, Press TV reported.

"The OPEC is extracting [more oil] than the allowed quota. I asked them to cut oil output to meet the quota. But it does not mean that we will not be producing more oil because it is our right to come back to the market," Zangeneh has been quoted as saying by Sputnik news agency.

The current OPEC quota stands at 30 million barrels of crude a day. Iran said earlier today it planned to boost oil production by 1 million barrels a day within the next 5-6 months.

"I do not expect a new agreement [on the quota] to be made on December 4," he added.

OPEC member countries are due to meet on 4 December to assess the bloc’s production policy and the global oil market, months after their June decision not to cut oil production despite a slump in global oil prices.

Iran’s oil minister stressed that Iranians "do not need a permission to restore our oil production levels" as seen prior to the 2012 sanctions.

Zangeneh said in early September: “Immediately after lifting sanctions, it’s our right to return to the level of production we historically had,” adding, “We have no other choice.”

He noted that the country will raise its output by 500,000 barrels per day soon after sanctions are lifted and by one million barrels per day within the following five months. Hmmmm......Sounds like interesting times are ahead of us.

Related: Global Oil Job Cuts Top 250,000

Friday, November 13, 2015

Iran unconcerned about Saudi crude export to Europe, ready to increase its crude oil export by 500,000 B/D.


Iran unconcerned about Saudi crude export to Europe, ready to increase its crude oil export by 500,000 B/D. (Taz).

Deputy Oil Minister of Iran Roknoddin Javadi has said his country is not worried about Saudi crude exports to Europe, asserting that Iran would still find a market in European countries.
Iran has been in talks with Shale and Total and is going to secure itself a place in the European oil market, Mehr news agency quoted him as saying on Nov. 10.

As Iran gears up for relief from sanctions, Saudi Arabia has started to increase its oil exports to Europe.

The countries currently boosting their exports to Europe are able to do so only in Iran's absence, Javadi claimed, noting, however, that it would take a while for Iran to return to the European market.

He pointed out that the National Iranian Oil Company (NIOC) had already held comprehensive talks with all its traditional customers, adding that there was no concern over the resumption of oil sales after the lifting of sanctions.

He hoped that Iran would achieve its goal since European countries have a policy of diversifying their oil import sources to reduce the risk of a shortage in critical times.

Mohsen Ghamsari, executive director for international affairs at the NIOC, asserted in September that Iran was fully prepared to increase its crude oil export by 500,000 barrels per day once sanctions are lifted, adding that the global oil market could easily absorb Iran’s surplus output. Iran’s current oil production stands at some 2.7 million barrels per day.


There are three main sanctions on the Iranian oil sector that the country expects to be removed. These affect transfers of petrodollars, the provision of oil tankers, and the ability to insure the tankers.

Monday, November 2, 2015

OPEC Oil price-2016: "There is no one who really knows the world oil prices projection" U.S. expert.


OPEC Oil price-2016: "There is no one who really knows the world oil prices projection" U.S. expert. (Taz).

Lifting the sanctions against Iran could increase the supply of Iranian oil to the world energy market for half a million barrels per day next year. This amount of Iranian oil supply will hold the world’s oil prices at the current low level. The International Monetary Fund (IMF) believes that Iran will increase its oil production (including condensate) by 20 percent to 3.7 million barrels per day in 2016.

Tehran now is actively promoting its new type of oil contracts, claiming Iranian energy market’s foreign investment openness.

US oil experts hardly believe Iran is able to strongly influence the world oil market in the nearest future that is to increase production up to 4.2 million barrels per day. There are two reasons for that disbelief: no effective economical methods for enhanced oil recovery and weak oil infrastructure in Iran. Tehran needs a lot of investment to solve these two major issues.

"There is no one who really knows the world oil prices projection. Iran may be able to increase oil production by one million barrels per day only after few years," said a US expert who asked to remain anonymous.

It is obvious no one can predict oil prices with absolute certainty but taking into account Iran, Russia and Saudi Arabia oil production increase, a lot of experts assume the oil price is going to be $58-60/barrel next year.

None of the experts, oil ministers expect a sharp oil price recovery or harsh "back to the good old" $100/barrel within the nearest future. Current oil market situation leads experts to wonder about the necessity to maintain OPEC. Is there a need? OPEC hardly carries out its functions and barely protects the market from the oil prices rapid decline.

An American economist who has decades of oil consultancy experience believes that OPEC's time is long gone, and there is no need for it today.

There are many OPEC member countries that carry out totally independent policy from OPEC since the cartel has been created. Since they have an independent policy from OPEC it adds a lot of economic misunderstandings to the oil market forecast.


"OPEC declares one projected oil production figure but the physically produced oil amount is another number all-together. These things are never plain sailing with OPEC," the expert stated.

In fact, the strong independent policy of some OPEC members has led them to state budget deficits. Next year the IMF experts’ expectation of Iran, Algeria, Iraq, Saudi Arabia and the United Arab Emirates’ state budget’ will face deficit, taking into account the 2016 year oil price forecast at $60/barrel. Libya will face the worst budget deficit. IMF experts think Libya’s breakeven oil price is $207/barrel. That is above and beyond the most optimistic wishful thinking. Oil at this price is a mirage in the sand.

The oil dependence reduction is the question of the hour , more than ever. Last September’s situation when the oil price has started to decline rapidly once more, reflected that neither OPEC nor anyone else can stabilize the prices as they wish. It is a true fact that the average Brent price since the beginning of 2015 is $54/barrel vs $98/barrel in 2014.Read the full story here.

Saturday, September 12, 2015

'This cartel isn't big enough for the Both of Us' - Iran's Former OPEC Gov Says New Ceilings Needed.



Iran's Former OPEC Governor Says New Ceilings Needed for Opec cartel Members. (Fars).

Iran's former OPEC Governor Mohammad Ali Khatibi said his country is needed to work on plans to lower the export quotas of the oil cartel members in a bid to find enough space in the market to hike its crude supplies.

Khatibi expressed dissatisfaction in the country's current production capacity that stands at 4 million barrels per day (bpd) and asked the oil ministry officials to boost the figure.
"Saudi Arabia stands atop global crude exports by supplying 10.5mln bpd while Iraq stands the second with 4.3mln oil bpd," he told a press conference on Saturday.
"And Iran can go up the ladder to stand the second from its current third via making proper investments," he added.

He said Iran should boost output but it should first work on plans to lower the production quotas of OPEC members.

In August, the Director of the international affairs at National Iranian Oil Company (NIOC) said that Iran had no plans to raise its oil exports until the western embargoes on the Islamic Republic's energy sector are lifted.

Currently, Iran sells around 1.1mln bpd of crude oil to its traditional customers, the oil ministry website reported at the time.

Mohsen Qamsari's remarks came as a reaction to some media reports which said Iran is planning to raise its crude oil sales before the western sanctions on the country are lifted.

Earlier in August, managing director of the National Iranian Oil Company Roknoddin Javadi said the same about Iran's output level. 

He said: “Any increase in Iran's oil production depends on the removal of sanctions and [the country’s] oil output will not undergo any change as long as sanctions are in place.,”

Recently, some media reports have suggested that Iran aims to boost its crude output by 500,000 bpd within the coming week.  Hmmm.....I said it before and say it again: 
1.'Iran will use it's huge stockpile as leverage to gain back their OPEC Share, if OPEC doesn't give in to their demands the will dump all their stocks on the market crashing the OIL market prices.' Nobody wants $20/Barrel prices. 
 2.Worst case scenario Iran blocks the strait of Hormuz even if it s for a few weeks the price of oil will sky rocket.By the way there will be no carriers in the Gulf as well....compliments of the Obama 'admin'.

Sunday, August 2, 2015

Iran Claims It can Boost Oil Output Just Days After Sanctions End.



Iran Claims It can Boost Oil Output Just Days After Sanctions End. HT: UOI.

Iran’s Oil Minister Bijan Zanganeh said today in an interview with state TV that Iran can boost oil production “in one week” after international sanctions are lifted.

He said production could increase by 500,000 bpd within a week after sanctions and by 1 million bpd within a month following that. Zanganeh warned that OPEC’s refusal to accommodate Iran in export markets would result in lower crude prices. (IRNA/Bloomberg, 2 August)

Our lost share of market, which was about 1 million barrel a day, will manifest itself,” Zanganeh said. Even if crude prices fall, Iran’s (oil export) revenues will stay the same because exports are due to double, he added. (Shana/Bloomberg, 2 August)

Iran produced an average of 2.85 million barrels a day in July compared with 3.6 million at the end of 2011 when oil and banking sanctions went into effect. The Iranian oil exports declined to 1.4 million bpd after sanctions compared to 2.6 million bpd in 2011.

“Some of the most effective sanctions with regard to the oil industry were those targeted aspects such as sales, volumes, shipment, insurance and the transfer of the money,” Zanganeh said. “If those issues are resolved, Iran will regain the market share that it has lost which amounts to more than one million barrels a day.” (IRNA/Press TV, 2 August)

Amid surplus crude supply, the global benchmark Brent crude fell about 50 percent last year and dropped 2.1 percent on Friday to $52.21 a barrel on the London-based ICE Futures Europe exchange. Hmmm.......This will be the death of shale oil and oil sands exploitation, in 6 months Iran only has to close the strait of Hormuz to put North America on it's knees. By the way there will be no carriers in the Gulf as well....compliments of the Obama 'admin'.

Friday, April 17, 2015

Oil prices rise amid doubts on ability of Iranian oil export.


Oil prices rise amid doubts on ability of Iranian oil export. (Taz).

Oil prices rise amid the doubts on the ability of Iran to export oil until 2016, British economic research and consulting company Capital Economics said in a report obtained by Trend.

Analysts mentioned that oil prices have rebounded since the middle of March after having fallen in the first two weeks of last month. They have been especially strong this week.

Prices were volatile in March as fighting in Yemen escalated causing prices to rise and details of a deal between Iran and the West were released, which then caused prices to drop sharply. However, they quickly rose again as it became apparent that Iran would be unable to export oil until 2016 at the earliest,” analysts said.

Tehran and P5+1 (the US, UK, France, Russia, China, and Germany) reached a political framework for the ongoing nuclear talks on April 2.

Oil prices initially fell by around 5 percent on the announcement but have since recovered all of their losses.

Crude oil prices jumped to fresh 2015 peaks on April 16. Brent crude for June delivery rose 66 cents to settle at $63.98 a barrel, rallying from a $62.00 low and reaching a 2015 peak for front-month Brent of $64.95.

U.S. May crude rose 32 cents to settle at $56.71, hitting a 2015 high of $57.42 after recovering from a $55.07 intraday low.

Brent's premium to U.S. crude was back above $5 a barrel, now comparing June contracts, after the spread narrowed to $3.34 intraday on Wednesday, the day Brent's May crude contract expired, Reuters reported.

Capital Economics’ analysts forecast Brent prices at $60 per barrel in 2015 and $65 per barrel in 2016. WTI price is forecasted at $55 per barrel in 2015 and $65 per barrel in 2016.


OPEC basket crude price is forecasted by British analysts at $57 per barrel in 2015 and $62 per barrel in 2016.

Monday, December 2, 2013

Why US is walking away from the Middle East.


Why US is walking away from the Middle East. (BI).By: Luke Rodeheffer and Lewis King.

Politicians and pundits from Riyadh to Washington have castigated recent American foreign policy in the Middle East for being unfocused, misguided or harmful to national interests.
Contrary to these accusations however, the Obama policy is none of the above: It is a pragmatic approach that takes into account a progressive decline in the political and economic importance of the Middle East.
This policy change is currently making headlines in Syria where the United States, despite accusations of hypocrisy and strategic blundering, remains skittish about engaging in a conflict that is drawing in almost every other regional player, many of whom are long time American allies.
This policy change is also reflected in other recent developments in the region, such as Turkey’s courting of CPMIEC, a Chinese weapons manufacturer under US sanction, Saudi Arabia’s de-coupling from America’s intelligence networks and renewed dialogue with Iran. These diplomatic changes already reflect a very different Middle East than the one most politicians acknowledge.
Furthermore, there is a simple explanation for this shift: The region no longer warrants the same level of attention that it did when it was a nexus of global conflict during the Cold War and the two decades that followed, when Middle Eastern oil’s role in the global energy market allowed it to hold the world economy hostage.
The results of the shale oil revolution, which is set to make America the world’s biggest oil producer by 2015, and the United States’ shift towards oil reserves in the Western Hemisphere are not the only factors in the decline of Middle East oil fortunes.
Even China is now jumping on the shale bandwagon, with a 5-year plan that is predicted to produce 60-100 billion cubic meters of shale gas by 2020. In the Middle East, Israel’s recent natural gas discoveries amount to approximately 950 billion cubic meters of reserves.
Further complicating matters is the continued instability of the region, which drives up the price of oil and makes alternatives more attractive. The Saudi ruling coterie is clearly worried, as Prince Alwaleed bin Talal demonstrated in an open letter to the Kingdom’s government last spring. He warned that revenues from oil form over 90% of the Saudi state budget, and the consequences of producing below capacity could be devastating.
Former National Security Agency specialist Paul D. Miller noted in his 2012 article “The Fading Arab Oil Empire,” peak oil production in the Middle East is either soon approaching or already behind us. Although oil production in the Middle East has reached levels unseen in two decades, the IMF recently warned Arab oil producers that they will face deficits by 2016.
Last month, the Kingdom announced it would no longer engage in the high level of intelligence sharing with the United States that had marked the two countries combined efforts in fighting terrorism in the region. In the same vein, the Saudis rejected a position on the UN Security Council that they had campaigned relentlessly to obtain. In a recent interview, Saudi Arabia’s Turki Bin Faisal Al Saud questioned whether Obama, “gets it” while condemning a “worldwide apathy—a criminally negligent attitude toward the Syrian people.”
But the reality is much more complicated than the picture Al Saud painted. In addition to a human rights catastrophe, the situation in Syria represents perhaps the most fundamental regional contest for power in decades.
The policies of the House of Saud and its allies, as well as those of Assad and his supporters, are both fueling the carnage, with neither side backing down. With so much at stake, longtime allies like the Saudis find it surprising that America remains so uncommitted, while America has every reason to abstain.
Domestically, boots on the ground is a non-starter and other interventionist alternatives are almost as unpopular. Just as importantly, the deference showed to Russia and China reflects a more balanced approach to foreign policy.
From Obama’s perspective, any marginal gains made by saving face on the Syria issue would be sharply offset by serious diplomatic fallout with Russia and China, not to mention Iran where a groundbreaking agreement was just inked.
Without the ability to use oil as a diplomatic weapon, there is very little that Persian Gulf countries can do. The Russians and Chinese, on the other hand, wield far more economic and diplomatic influence over not only the United States but its European allies as well. For the time being, the primary belligerents in this conflict are of Middle Eastern origins and America would prefer to keep the conflagration localized.
If Saudi Arabia is so concerned about the degeneration of human rights conditions, there is little stopping them from taking a more interventionist role. Aside from arming rebels, many of whom are hardline extremists, Saudi Arabia has shown little willingness to engage Syria militarily.
This is not for wont of weapons: America has granted the Kingdom an enormous amount of military support since 1950, with the Saudi Armed Forces absorbing huge amounts of armaments to keep the Gulf free of Soviet influence. Arms sales exploded again in the wake of the Islamic Revolution. After 9/11, arms sales received another shot in the arm.
Turkey has expressed its discontent with the US and the West through a variety of moves. Announcements concerning the planned purchase of a $3.4 billion high-altitude missile defense system from China have already raised the ire of NATO’s leadership.
ErdoÄźan has also successfully drawn Turkey closer to the Shanghai Cooperation Organization (SCO), stating that the organization shares Turkey’s values and gaining observer status earlier this year. Ankara has also expressed interest in joining the Eurasian Union, an economic block being formed between former Soviet states.
In spite of its aggressive signaling however, Turkish policies seem to have had no real impact on America’s regional shift. NATO officials maintain that any Chinese missile systems will not be compatible with the organization’s defenses, leaving Turkey with very little room to negotiate.
During the Cold War, Turkey was a valuable ally and it remains a key strategic state. In the current climate, however, the former ally is no longer able to command the same attention and must make threats to go elsewhere in search of economic and military alliances.
The erosion of American support has reduced Turkey’s ability to wield influence in the region. Two of its major projects, Syria and Egypt, have both ended poorly, alienating the Erdogan regime and damaging Turkey’s ability to act as a regional leader. It is clear now that Turkey engaged in the Syrian conflict with the expectation of far more Western support that it received.
With an 822 kilometer shared border with Syria and a refugee crisis on his hands, Erdogan has everything to gain from an intervention and has repeatedly lobbied Turkey’s allies for one. Yet without Western support beyond defensive Patriot missile batteries, Turkey finds itself saddled with a humanitarian crisis and uncomfortably close to a perturbed and resilient Assad.
The unwillingness of the United States to condemn the recent coup in Egypt is another illustration of this divergence. Ever since they came to power in Egypt, Erdogan closely aligned himself with the Muslim Brotherhood. When Morsi was ousted, Erdogan saw the West’s compliance as a personal and ideological betrayal. Just as importantly, Washington’s response showed that it was more interested in maintaining the status quo than defending Erdogan’s allies.
The status quo of the last half century was predicated on American interventionism, which is dwindling. Under the new circumstances, states in the region will do well to follow a path of increased cooperation and compromise.
The current feud between Turkey and Israel over the death of Turkish activists on board the Mavi Marmara is dividing countries that would benefit from an improvement in relations. The Saudis, for their part, will need to either look elsewhere for allies against Iran, or opt for a peaceful resolution. And as the sectarian conflict rages on in Syria, those chances are dwindling.
In a classic 1973 Foreign Affairs article, “The Oil Crisis: This Time the Wolf is Here,” U.S. Ambassador to Saudi Arabia James E. Akins bemoaned the inability of the global economy to break itself free from Middle Eastern oil, and pined for the day when America’s shale oil reserves, alongside supplies from the emerging field of renewable energy, would allow the U.S. to reduce oil imports.
Four decades later, Akins’ dreams of an American foreign policy no longer held hostage to the international oil market is coming into focus. After a decade of heavy investment, renewable energy supplied almost 15% of U.S. demand in the first half of 2013, and the United States has pushed aside Saudi Arabia and Russia to become the world’s top oil producer.
The first half of the 20st century demonstrated that oil has the ability to alter regional and global power balances, placing the Middle East at the center of the world stage. But the dawn of a new century has brought with it new geopolitical realities, including America’s new surge in domestic energy production, allowing Washington to begin its ‘pivot towards Asia’ while avoiding becoming mired in an increasingly unstable and unpredictable Middle East.Hmmmm.....Great insight still doesn't explain why the US is cozying up to Iran.

Friday, September 6, 2013

"Sanctions that Bite" - Iranian Oil Company cannot pay out profit for South Pars bonds.


Iranian Oil Company cannot pay out profit for South Pars bonds.(Taz).

Iran's National Oil Company cannot pay the profit for South Pars gas field project's participation bonds, the Iranian Jahanesanat newspaper reported.
The time for paying 20 per cent profits has now come while none of the South Pars phases have been inaugurated yet, the report said.
Ex-president Mahmoud Ahmadinejad sold foreign currency bonds worth $1.5 billion and 40,000 billion rials (approximately $1.61 billion based on official rate of 24,800 rials per each USD) to finance the South Pars gas field's development projects.
According to the report, the pay-out time for the foreign currency bonds has now arrived and the national currency bonds` profit pay-out time will arrive in a few months.
In January 2012, Iran's Pars Oil and Gas Company (POGC) head Mousa Souri argued that offering a profit of up to 35 per cent on the South Pars gas field bonds to attract public participation is economically justified, whilst 18 months year after that statement paying the offered 20 per cent profit seems impossible.
Considering the decrease of foreign investments in Iran due to international sanctions as well as increase of liquidity, Ahmadinejad`s administration issued 13.7 trillion rials (some $950 million) in bonds in 2011, but just $250 million of the bonds were sold.
Iran refers to the low interest rate as the main reason for the small public demand for the bonds which held 17 per cent in profit. So the Central Bank increased the interest rate to 20 per cent in February 2012.
Unlike the first round of issuing the bonds for the South Pars gas field, when 84 per cent of the bonds did not sell, some $1 billion of the bonds were issued and totally sold out for the second time.
The South Pars gas field is jointly held by Iran and Qatar. The Iranian section, which is divided into 29 phases, holds around 14 trillion cubic meters of natural gas. Iran's total gas reserves amount to 34 trillion cubic meters. The country's daily natural gas production and consumption are estimated at 554 million cubic meters and 551 million cubic meters, respectively.

Tuesday, February 12, 2013

Get ready for higher gas prices? Iran’s chances to win OPEC sec. gen. post rise as Saudi Arabia quits.


Get ready for higher gas prices? Iran’s chances to win OPEC sec. gen. post rise as Saudi Arabia quits.(TI).Iran has gained new chances to win the post of the OPEC secretary general as Saudi Arabia's Majid al-Moneef withdrew his candidacy, the Fars News Agency reported.
Al-Moneef, who formerly served as Saudi Arabia's governor to the Organization of Petroleum Exporting Countries and as a senior economic adviser to Oil Minister Ali al-Naimi, had been vying for the producer group's top administrative position against candidates from Iran and Iraq. He dropped out of the contest on Monday.
In October 2012, Iranian foreign ministry spokesman Ramin Mehmanparast said that all the necessary measures will be taken to support ex-oil minister Gholamhossein Nozari to win the secretary general post in the Organization of Petroleum Exporting Countries.
The Shana News Agency quoted him as saying that Iran is a founding member as well as an influential member of the organization and it is natural for it to win the post.
The OPEC's current Libyan secretary general, Abdallah el-Badri, has been in the position for two terms since 2007.
Although Iran is the OPEC's second major producer, the only Iranian secretary general has been Mr Foad Rohani, who held the post between 1961 and 1964.
Iran has attempted several times to take OPEC general secretary post during last 30 years by nominating Hadi Nejad-Hosseinian and Hossein Kazemi Ardabili, but could not succeed.
Iran announced on June 2 that it will introduce a nominee for the post of secretary general of the Organisation of the Petroleum Exporting Countries (OPEC), but a day later Iraqi deputy Prime Minister Hussain al-Shahristani said that Iran will support Samir Ghazban, the Iraqi nominee for the position.
OPEC's current secretary-general, Abdalla el-Badri of Libya, will complete his second three-year term at the end of this year.
OPEC ministers will probably consider the nominations at their June 14 meeting at the organization's Vienna headquarters.
OPEC's members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.Hmmm....How many 'like' the US and the West?Read the full story here.

Thursday, January 31, 2013

Iran oil exports rise to highest since EU sanctions.


Iran oil exports rise to highest since EU sanctions.(JPost).GENEVA/DUBAI - Iran's crude oil exports in December leapt to their highest level since European Union sanctions took effect last July, analysts and shipping sources said, as strong Chinese demand and tanker fleet expansion helped the OPEC member dodge sanctions. Exports rose to around 1.4 million barrels per day (bpd) in December, according to two industry sources and shipping and customs data compiled by Reuters on a country-by-country basis and corroborated by other sources and consultants. The sources said they expected exports to dip in January from the December peak ahead of new US sanctions. Western sanctions aimed at curbing Iran's disputed nuclear program halved Iran's oil exports in 2012 from 2.2 million bpd in late 2011, leading to billions of dollars in lost revenue and a plunge in the Iranian currency.
But continuous robust demand from top buyer China and others such as India and Japan, as well as the purchase of new tankers, allowed the Islamic Republic to unexpectedly boost exports late last year.
The United States and the EU are hoping the economic pressure will force Iran to address international concerns about its nuclear program, which Tehran insists is for peaceful purposes but the West suspects is for making weapons.
Salar Moradi, oil market analyst at oil and gas consultancy FGE, estimated that Iran shipped more than 1.4 million bpd of crude oil in December and forecast that exports would remain between 1.1-1.3 million bpd in the first quarter of 2013.
This represents an increase from a low-point of less than 900,000 bpd in September and suggests monthly revenues worth approximately $4.7 billion based on December Brent prices.
"They (Iran) bought a number of tankers from China and can now do more deliveries ... It's taken some pressure off Iran and facilitated tanker traffic and we are seeing higher exports to China," he told Reuters this week.
The second industry source said the rise in exports to near 1.4 million bpd was a result of traditional buyers finding new ways to secure shipping insurance.
But, like FGE, he estimated that they would fall slightly to around 1.3 million bpd in January. Previously, Iran's tanker fleet had struggled to meet delivery schedules to China because EU measures in July barred Europe-based insurers from covering tankers that carry Iranian oil.
"China is saying let's up the numbers because no-one is doing anything about it and it looks like Obama has made a political decision not to go to war with Iran," said a senior source with a large independent trading house.
Elena McGovern, oil and gas analyst at Business Monitor International, said: "The implications of preventing Chinese imports from Iran would be too damaging to the (U.S.-China) bilateral relationship. I would be very surprised if Obama were to take China to task on Iranian imports."
India's imports of Iranian crude were up 29 percent in December from November at around 275,000 bpd, according to tanker arrival data.
Tracking Iranian shipments has become increasingly difficult as companies have sought to conceal tanker movements from Western governments by turning off satellite signals. Still, some analysts think Iran will continue to find ways to safeguard against significant drops in its oil revenues.
"What we have seen is that when Iran is pushed to a do or die situation, they have looked for creative solutions to get around sanctions," said McGovern.
"The system will always find a way to cope."Hmmm.....'Sanctions that Benefit'Read the full story here.

Related: Iran-Turkey Trade Value Touches $20bln in 2012

Friday, October 26, 2012

Lawmaker: Iran may use oil to counter EU hostilities.


Lawmaker: Iran may use oil to counter EU hostilities.(TI).In the wake of the European Union (EU)'s illegal sanctions on Iran over its nuclear energy program, a senior Iranian lawmaker says the Islamic Republic will use oil to counter the hostilities of the 27-nation bloc, PressTV reported. "If Iran intends to retaliate against Europeans, it has the capability to; but we do not want to do that because the European people will face problems," Chairman of the Majlis Energy Committee Massoud Mir-Kazemi said on Wednesday.
However, Iran will retaliate in case the European Union continues its obstinacy, he added. "When the Westerners use oil as a political tool, they should know that oil is Iran's political tool not theirs, because it is Iran that possesses oil," the legislator added. Mir-Kazemi said that Iran seeks to meet its demands through non-oil resources. The lawmaker's remark came after Iranian Oil Minister Rostam Qasemi warned on Wednesday that Tehran would halt its oil exports if more sanctions were imposed on the country. If the West continues "to add to the sanctions, we will stop our oil exports to the world... The dearth of Iranian oil in the market will increase the price drastically," Qasemi stated. The illegal US-engineered sanctions were imposed based on the unfounded accusation that Iran is pursuing non-civilian objectives in its nuclear energy program. Iran rejects the allegations, arguing that as a committed signatory to the Non-Proliferation Treaty (NPT) and a member of the International Atomic Energy Agency (IAEA), it has the right to use nuclear technology for peaceful purposes.Read the full story here.

Sunday, October 14, 2012

"Sanctions that Benefit" - India’s HMEL bought 2 million barrels of Iranian oil.


"Sanctions that Benefit" - India’s HMEL bought 2 million barrels of Iranian oil.(AA).India’s HMEL, part-owned by steel tycoon Lakshmi Mittal, has emerged as a new oil client of sanctions-hit Iran, potentially complicating New Delhi’s bid for a renewal of its waiver from U.S. sanctions for buying crude from Tehran. HPCL-Mittal Energy Ltd (HMEL) has taken two shipments of Iranian oil since the start of September to maximize margins at its 180,000 barrels per day (bpd) Bathinda refinery in northern India, two sources with knowledge of the deals told Reuters.
The purchases came to a total 2 million barrels. In June Washington granted India a waiver on sanctions that would have cut it off from the U.S. financial system because it had reduced its purchases of the OPEC nation’s oil. India's waiver from the sanctions, which are designed to dissuade Tehran from pursuing its nuclear program, will only be renewed in December if imports have been cut further.
Mark Dubowitz, a U.S. lobbyist for tougher sanctions on Iran and head of the Foundation for Defence of Democracies, said HMEL was taking a significant risk in buying this oil. “The U.S. government in December will be looking to see whether India has indeed significantly reduced its purchases of Iranian oil and the addition of one more customer - especially with significant exposure to the U.S. and Europe - will raise eyebrows in Washington,” Dubowitz said.
In September HMEL bought a million barrels each of Arab Medium and Khafji, while for October it is scheduled to lift 2 million barrels of Arab Medium from the kingdom. “I am sure they can get good discounts (on Iranian oil). The problem is banking. If they can resolve it, they get cheap crude and not illegally,” said one Asian oil trader. None of the sources were aware of the payment mechanism that HMEL would use for oil imports from Iran. Indian refiner Bharat Petroleum Corp (BPCL) has not received Iranian oil since February as it could not open an account with Turkey’s Halkbank, which is used by other Indian refiners to pay for oil from Tehran in euros. “How HMEL will make its payment is yet to be seen,” said one of the sources. The rial has plunged in the open market against the U.S. dollar and has boosted inflation in Iran.Hmmmm....Mark Dubowitz, a U.S. lobbyist for tougher sanctions on Iran would better look at Turkey's total oil imports since Jan 2012 before 'judging' India.Read the full story here.
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