[ad_1]
A month after President Donald Trump announced that the United States was pulling out of the Iranian nuclear deal and re-imposing sanctions on Tehran's oil, Iran's rival and de facto leader of OPEC, Saudi Arabia, reunited fellow cartel members in the Gulf and his partner in OPEC + on board to start pumping more oil to make up for the expected loss of oil. Iranian supply.
Barely five months later, Saudi Arabia and OPEC allude to a further reduction in oil production, rising production and signs of slowing growth in demand, suggesting a glut of offer next year.
The oil market and analysts – who questioned Saudi and Russian capacity two months ago to compensate for the expected heavy Iranian losses – now think that OPEC and its allies reacted too early to come to the rescue of the global supply of oil.
Analysts say that President Trump, intentionally or not, has "duped" Saudis to overproduction to compensate for what should surely represent more than a million bpd and even nearly 2 million bpd loss from the 'Iran.
The Saudis and Russia never actually said they were compensating Iran – their goal was, as always, to ensure "market stability", OPEC's favorite buzzword.
Throughout the summer and early fall, the United States has suggested that sanctions would be more severe than under the Obama administration and that the goal was to reduce Iranian oil exports to "zero ".
In fact, few people thought that Iranian exports would be zero in early November, but the oil market and analysts began to worry that the Iranian loss would be much larger than expected. As a result, the market has welcomed the rise in production from Saudi Arabia and Russia, and even asked if that would be enough.
Oil prices reached their highest level in four years. Brent Crude reached $ 86 in early October, a month before US sanctions against Iran were reinstated.
But rising oil prices have begun to weigh on the import bill for many emerging markets, particularly the world's third largest oil importer, India, compounded by the slide of local currencies against the US dollar. .
Add to that the escalation of the trade war between the United States and China, which has begun to weigh on the growth prospects of the world economy and the demand for oil, and the fear of a tightening of the economy. supply shifted the fear of a decline in demand. In just two months, the key question posed by market players and analysts has also shifted from "are they sufficiently active" to "not overproduce"?
Next come the start of US sanctions on Iran and, with him, waivers to eight Iranian oil customers – including the biggest buyers, China and India – because of the particular situation of some countries and the guarantee of a well-stocked oil market, said US Secretary of State Mike Pompeo m said.
Related: natural gas markets remain tight
The sanctions imposed on Iran and the United States were lifted on the eve of the mid-term elections in the United States. President Trump saw the price of US gasoline drop to its lowest level in six months the week before the elections. As analysts say, there is little more frightening about a US president than soaring fuel prices.
According to analysts who had spoken to CNBC, the Saudis would have been pumped further in anticipation of serious losses for Iran and a certain position of the United States in terms of waivers and zeroing. Iranian exports.
Iranian exports are down about 1 million bpd from May, but 1.2 million bpd – 1.5 million bpd are likely still shipped to Tehran customers, while 1.5 million bpd bpj and even 2 million bpd of exports would be stifled. .
The Saudis have been duped to increase oil production, ClipperData head of commodity research, CN Smith, told CNBC.
Oil prices rise as Saudis reduce exports
"They have been very successful in bringing down the price of oil, but it has done to the detriment of some of those relationships there, because it is obvious that the Saudis have to be quite dissatisfied with the way things are done. happened here, "Smith said.
The Saudis are now referring to another U-turn: a new cup next year. Saudi Energy Minister Khalid al-Falih reiterated that "we must do all that is necessary to balance the market," but Russia would be reluctant to participate in another collective reduction of the energy supply. offer.
President Trump is not referring to anything at all – he said prices should be even lower in his last tweet targeting OPEC this week: "Let's hope that Saudi Arabia and OPEC will not reduce their oil production. Oil prices should be much lower depending on the supply!
The next OPEC plenary meeting at which production policy decisions could be made will take place during the first week of December. We are expected for two and a half weeks of interesting rumors, leaks, hints and comments from Saudi Arabia and Russia, and probably from President Trump.
By Tsvetana Paraskova for Oilprice.com
More from Reading Oilprice.com:
[ad_2]
Source link
