• 3 minutes TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 1 hour How to Create a Pandemic
  • 10 mins Which producers will shut in first?
  • 27 mins KSA taking Missiles from ?
  • 35 mins There are 4 major mfg of hydroxychloroquine in the world. China, Germany, India and Israel. Germany and India are hoarding production and blocked exports to the United States. China not shipping any , don't know their policy.
  • 56 mins A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 4 mins Trump eyes massive expulsion of suspected Chinese spies
  • 1 hour Breaking News - Strategic Strikes on Chinese Troll Farms
  • 3 hours Eight Billion Dollars Wasted on Nuclear Storage Plant
  • 14 hours Today 127 new cases in US, 99 in China, 778 in Italy
  • 16 hours America’s Corona Tsar, Andrew Fauci, Concedes Covid-19 May Be Just a Bad Flu With a Fatality Rate of 0.1%
  • 17 hours Western Canadian Select selling for $6.48 bbl. Enbridge charges between $7 to $9 bbl to ship to the GOM refineries.
Alt Text

Barclays Slashes Oil Price Forecast On Demand Shock

Barclays slashed its oil price…

Alt Text

WTI Rallies 24% In Panic Stricken Markets

WTI rallied on Thursday for…

Alt Text

Oil Prices Could Fall Another 20%

Oil prices have tumbled as…

ZeroHedge

ZeroHedge

The leading economics blog online covering financial issues, geopolitics and trading.

More Info

Premium Content

Iranian Oil Industry Not Threatened By $25 Oil Claims Minister

The precarious "game theory" equilibrium that worked for decades while OPEC was still a functioning cartel is unwinding before everyone's eyes. Just as Saudi Arabia accurately anticipated, the lower the price of crude goes, the more both OPEC members and their non-OPEC peers (especially shale companies funded by hundreds of billion in junk bonds) will have to produce in order to keep their budgeted revenues roughly in line (and keep creditors happy for the time being) in the process setting off an unprecedented wave of bankruptcies and production capacity declines, which take about 6-12 months after the price plunge to materialize. Case in point: the country formerly known as Iraq (and now better known as that region around the Tigris and the Euphrates that does not belong to ISIS) is pumping crude at a record pace and will continue to boost exports this year, its Oil Minister Adel Abdul Mahdi said.

Those who were rushing to buy Brent on its latest intraday Friday spike, and are wondering why it is back below $50, here is the reason: "The average for Iraqi crude output is 4 million barrels a day, which is a historical record,” Abdul Mahdi said at a news conference after meeting his Turkish counterpart, Taner Yildiz, in Baghdad. Exports from Iraq will rise to 3.3 million barrels a day this year, boosted by oil from the Kurdish region, Abdul Mahdi said.

Related: Low Oil Prices Force OPEC Members To Rethink 2015 Budgets

Bloomberg reminds us that Iraq's central government reached an accord last month with the Kurds to allow increased oil exports through Turkey. Oil prices have fallen about 56 percent since June amid a supply surplus on global markets. That, and also unknown numbers of ISIS crude barrels being transported via illegal channels through Turkey and onward to unknown end-buyers, most of which operated shrouded in secrecy.

More from Bloomberg:

Iraq will ship 60 crude cargoes, equivalent to 3.3 million barrels a day, from the Basrah Oil Terminal in the Persian Gulf in February, according to a preliminary loading program obtained by Bloomberg News today. The whole country exported 2.94 million barrels a day in December, the most since the 1980s, Oil Ministry spokesman Asim Jihad said Jan. 2.

Exports from northern Iraq through a pipeline to the Turkish port of Ceyhan will average 375,000 barrels a day in the coming months, rising to as much as 600,000 barrels a day by April, Abdul Mahdi said. About 500,000 to 600,000 barrels a day of Iraq’s production is consumed locally, he said.

An agreement in December resolved months of feuding between Iraq’s Kurdish region and in the central government in Baghdad over who had the right to export crude from the semi-autonomous area. The deal allowed for as much as 550,000 barrels a day of oil to be shipped through Turkey from northern Iraq, including 250,000 a day from the Kurdish region. Iraq’s central government had previously threatened legal action against any buyers of crude produced in the Kurdish area.

One wonders how little it cost the Saudis to override any Iraqi objection to this deal, considering that this merely accelerated the end goal so sought by the Saudis - the collapse of crude prices.

Related: Iran Hoping Natural Gas Can Save It From Low Oil Prices

And speaking of collapsing prices, how much further can they drop? For the answer we go to Reuters which reports that Iran's oil minister said on Monday that there are no plans to call an emergency OPEC meeting to discuss prices. Bijan Zanganeh, in remarks posted on the oil ministry's website SHANA, called for increased cooperation among OPEC members to balance the market to ensure a reasonable oil price for investors and producers.

The punchline:

Zanganeh said that Iran's budget should be based on oil at $72 per barrel, but Iran could withstand lower oil prices. "Even if the oil price goes down to $25 a barrel, the oil industry will not be threatened," the Fars news agency quoted him as saying.

And there is that magic "$25" number again. For those curious to read more, here is our report from a month ago, "Oil May Drop To $25 On Chinese Demand Plunge, Supply Glut, Ageing Boomers."

By ZeroHedge

Source - http://www.zerohedge.com/ 

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage






Leave a comment
  • Ratheesh on January 20 2015 said:
    But, how long you will sustain...?

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News