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Hazem Hussein – Agencies
In 2017, the Organization of the Petroleum Exporting Countries (OPEC) approved a 1.8-million-barrel-a-day production decline in June, which was Partially appeased and reached its highest level in 2018.
During the months in which OPEC reduced its production, the world oil market experienced a strong evolution, pushing crude to high price levels compared to the two. Previous years: In just a few weeks, the price of Brent's world-leading crude rose from about $ 50 a barrel to $ 1 a barrel, requiring an urgent intervention to balance supply and demand levels. request, and with the payment of Russia and Saudi Arabia, the organization responded and the balance was partially restored.
OPEC production increases in the midst of growing fears 1945899
Crude oil production of OPEC member countries has recently reached its highest level in 2018, Main markets of production and increased production capacity, as well as the positive effects of the previous decision to lift restrictions on partial reductions in production in early July, more than 18 months after the loss of more than 900 million barrels of the market. energy.
In addition to the decision to withdraw from production cuts, some Member States have concluded parallel contracts with the United States, as well as the liberalization of a number of independent producers of production reduction policies and previous agreements with OPEC. OPEC reports that it exceeded the production limit in accordance with the coordination between OPEC and its independent partners.
According to a survey conducted by Reuters, the results showed that OPEC's commitment to previously set targets and procurement levels approved by Member States fell to 111% in July Compared to 116% in June, the current ratio indicates that FAO still recognizes production constraints and has not yet reached the level of flow it approved at the Vienna meeting last June.
Limited increase in Nigeria and the Gulf
According to the survey, the list of countries having seen its production increase, 80,000 barrels in Kuwait, 40,000 barrels in the UAE, In Saudi Arabia, and 50,000 in Nigeria, and increased oil flows from Iraq with the steady movement of southern ports' exports in a way that has contributed to the increase in the price of oil. Iraq offer.
The total increase of 220,000 barrels in the Gulf and Nigeria does not correspond to the relative weight of these countries and their production, reserve and export capacities: for example, Nigeria n & # 39 is not subject to production restrictions While Saudi exports are not growing significantly, despite an increase of 50,000 barrels from last June's levels, refinery and plant consumption are increasing with summer consumption. and stays close to 10 million and 600,000 barrels a day. What I recorded in June.
Given OPEC's decision to withdraw from production cuts and requests from the former Saudi Arabian and others to pump a million barrels per day, it seems necessary to mitigate stock losses of more than 100 million barrels. Reduction of production), these elements suggest that the increase in production has supported the productive reserve, which increases the capacity of producing countries to cope with emergency situations and to ensure the sustainability of their flows. or to a direct buyer outside the declared trades. Ml Reserve price levels.
Iran loses 100,000 barrels
Oil production from Venezuela, Libya, and Angola continued decrease, The barrel a day and the decline of Iranian exports in the absence of companies to buy Iranian oil because of the new US sanctions.
Libyan production, still unstable because of the unrest, has resumed and the eastern fields have resumed production after an armed arm in the ports of export, but the production is still in progress. halted mid-month spark, the largest oil field in Libya.
Production in Venezuela also fell, as the oil industry ran out of cash due to the economic crisis, and Angola, due to a drop in exports in July, while the oil fields have weakened.
Increased flows between the desire of Washington and the threats of Tehran
While the output of the OPEC meets in The Austrian capital Vienna in early June, The decision to reduce production after 18 months (from January 2017 to June 2018) was motivated by the direct pressure of the United States, combined with the Russian and Saudi willingness to increase the number of employees. global supply, expressing rather anxiety than pressure.
The OPEC meeting meets a month before the United States announces their withdrawal from the nuclear deal with Iran and announce their intention to approve a package of sanctions military and economic against Tehran, including the shutdown of Iranian exports in November. It was normal for these developments to have a negative impact on the assessment of OPEC and its allies of the state of the market and the balance of supply and demand. demand, as well as industry pressures and energy concerns.
Contrary to what most people think, sometimes the rise in oil prices is not excessive for the benefit of the producing countries, even if this increase represents more profits and cash flow, and an imbalance. demand. To absorb even limited flows: if demand falls, global growth (including the growth of oil-producing countries) is at stake and threatens to sink into a downward spiral of recession accompanied by an inflationary recession that benefits neither the buyers or sellers. 19659003] The OPEC has already declined, but Iran, a leading player in the oil market, felt that it was an attempt to fill its place in the organization and the market and reduce the effects of the embargo on its oil flows, withdraw from the OPEC to offset its production quotas and then threaten to close the Strait of Ormuz in the sphere of influence, and guide the Houthi militias affiliated with the closure of the Bab al-Mandab Strait, disrupting half of the world's oil flows. Remains a signal The risk can be caused by an increase in production, with the aim of strengthening the reserves of countries and major buyers, anticipating any sudden development and securing the contingency maneuvers of any party until They are processed and ensure the sustainability of the flows and the stability of the market.
[19459007HowdoesIranseeanincreaseinproduction?
At the June meeting, Iran was present and accepted OPEC's decision to waive production cuts, even though approval was reluctant or forced. To offset their quota, they will withdraw from the organization, and now production will increase the market balance and moderate prices, and although the available figures do not indicate the breakdown of the agreement or do not replace Iran, what is important for Iran?
19659003] in the interest of Saudi Arabia and the Gulf Group, and the countries of the region, even non-oil, to withdraw from one This will reduce the revenues of Iran and limit its ability to support extremists and militias in Iraq, Syria, Yemen and elsewhere: even though US sanctions and Tehran's exports are banned, China, Turkey and Russia do not will not provide good financial flows. Ankara is a means of smuggling Iranian oil and gas flows, as it did during previous sanction periods.
The balance between supply and demand, lower prices, pressure on the market and futures, Iran will see a hidden manipulation of the oil market and a direct threat, and the growing economic pressure will coincide with the national currency (riyal). And threaten the Gulf and the Strait of Ormuz, which means that more than 30% of global oil flows will be threatened, which will force the price and strengthen the position and financial results of Tehran, but it will certainly represent an adventure dangerous.
It is not known which course will adopt Iran. At the same time, Tehran could announce its withdrawal from OPEC, but this venture could move it away from the ring and affect its presence and market share in the future. Oil could threaten the Gulf and the Strait of Hormuz, but it could become vulnerable. With chances and risks, it does not seem that Iran will go ahead, often in its position, looking left and right, calculating the calculation and making it explode, threatening and soothing, and finally returning to the "house of obedience".
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