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Page added on November 20, 2016
Iran Pivots Toward Oil Deal; Expect Iraq To Go Rogue
A member of forces from Iraq’s elite Rapid Response Division monitors the area at the site of a suspected mass grave on November 19, 2016 on the outskirts of the village of Tall Adh-Dhahab, located some 10 kilometres (6 miles) south of Mosul. Iraqi forces have found another suspected mass grave containing the remains of victims of the Islamic State group in territory recaptured from the jihadists near Mosul, AFP journalists reported on November 18, 2016. (Photo ODD ANDERSEN/AFP/Getty Images)
Iran is learning from its geopolitical rival and fellow OPEC-member Saudi Arabia . Pivoting from its reluctance in April and even last month that it would balk at joining any OPEC production cuts later this month when the cartel meets in Vienna, Iran’s oil minister Bijan Zangeneh said on Saturday that a production cut will probably be put in place.
Zangeneh said “it is highly likely” that oil and energy ministers of the member countries of the Organization of the Petroleum Exporting Countries (OPEC) will reach an agreement on November 30. Iran’s oil ministry news agency, Shana, quoted Zangeneh as saying that if producers manage to cooperate, oil prices could rebound to $55 to $60 a barrel, the level OPEC members deem appropriate for producers and consumers.
Decide for yourself if the oil minster’s words hold water since the country still wants to reach pre-sanction oil output levels of 4 million barrels per day (bpd). Zangeneh hasn’t specified how Iran would participate in the anticipated oil production cut.
However, an Iranian oil ministry official did say, “we are almost there,” referring to reaching the pre-sanction output mark. According to Iranian data, the country pumped around 3.92 million bpd last month, while some new projects are now on-line since then.
Iraq, OPEC’s second largest producer, is also reportedly upbeat on an OPEC production cut. On Friday, Iraq’s oil minister, Jabbar al-Luaibisaid, told the Wall Street Journal that he was “optimistic” about OPEC reaching an agreement at its next meeting. The report said that it’s a change in tone that suggests the cartel’s most recalcitrant member is coming around to the idea of cutting oil output.
Going rogue
However, it remains to be seen if Iraq’s recently announced optimistic tone will carry any credence at the upcoming meeting. In other words, Iraq has decidedly good reasons to not participate in an OPEC production cut.
First, as Baghdad has said for over a month now, Iraq needs to keep oil production high to raise more revenue in its efforts fighting ISIS. Second, Iraq has the most convincing case of any of the recent potential oil cut agreement hold-outs (Iran, Nigeria and Libya) since the country’s oil sector was placed under international sanctions during the helm of Saddam Hussein. These sanctions caused Iraq, according to Baghdad, to lose market share to other OPEC members.
Finally, though Iraq says its optimistic about OPEC reaching a deal, it still sent the word out last month to foreign oil companies operating in the country to ramp up production next year. Not likely, that those statement will be rescinded. Iraq may express optimism on a production cut, but that doesn’t mean it will come from a concession from Baghdad. Iraq could still go rouge forcing OPEC de facto leader Saudi Arabia to most likely pick up the pieces.
10 Comments on "Iran Pivots Toward Oil Deal; Expect Iraq To Go Rogue"
Davy on Sun, 20th Nov 2016 7:49 am
An excellent read on the battle brewing on American foreign policy.
“War Breaks Out Between Neo-Cons And Libertarians Over Trump’s Foreign Policy”
http://www.zerohedge.com/news/2016-11-19/war-breaks-out-between-neo-cons-and-libertarians-over-trumps-foreign-policy
“I think we are overdue for American retrenchment. Americans are beginning to suffer from hegemony fatigue,”
Davy on Sun, 20th Nov 2016 8:00 am
Maybe or maybe not but there is definitely a fight going on
“Fear And Loathing Inside The Deep State”
http://www.zerohedge.com/news/2016-11-19/fear-and-loathing-inside-deep-state
“The Deep State is in deep trouble.”
Norman on Sun, 20th Nov 2016 8:12 am
This deal/no deal, output cut/no cut BS is beyond sickening at this point. I believe all of this crap is just hiding the fact that they can´t control output at will, and I mean phisically. Every major field in the world has to be undergoing EOR extraction techniques now. If you try to mess with it, you are shooting yourself in the foot. Cutting down output will harm you more than anything else, you may even damage the reservoirs permanently.
Someone from the industry to shed some light on this? I would really appreciate that. Rockman, short…you are more than welcome.
Apneaman on Sun, 20th Nov 2016 11:29 am
Norman, never will you get more horseshit than from “someone from the industry” and that includes all those industry employees at the revolving door counting agencies like the IEA who are nothing more than taxpayer funded industry lobbyists.
Anonymous on Sun, 20th Nov 2016 4:29 pm
Brought to you by the amero-zionist empire. Exporting ‘democracy and freedom fries’ for over 200 years.
.5mt on Sun, 20th Nov 2016 4:48 pm
Lol, kook anon has Mossad under his bed.
Sissyfuss on Sun, 20th Nov 2016 8:16 pm
We give you democracy and then you give us your resources. Win-Win!
makati1 on Sun, 20th Nov 2016 10:02 pm
.5mt, kick ALL Jews out of the U$ and see real freedom return. If you doubt that, check the religion of the elites who run things there.
GregT on Sun, 20th Nov 2016 11:03 pm
“Lol, kook anon has Mossad under his bed.”
Highly unlikely half empty. Anonymous wouldn’t be speaking out if they were. You, on the other hand, ………..
rockman on Mon, 21st Nov 2016 9:31 am
Norman – “If you try to mess with it, you are shooting yourself in the foot.” A valid point. But impossible to quantify. OTOH despite what many folks think individual fields undergoing EOR don’t tend to be big producers. There are a few exceptions like Ghawar. But still most EOR projects, like the Rockman’s horizontal redeveloment, still might be pushed to the max for the same reason all of OPEC is pushing production: maximizing cash flow.
So back to the point I’ve pushed from the beginning of the oil price decline: increased production has been a result of lower oil prices…not the other way around. To believe so means to believe the KSA et all gave up $700+ BILLION in revenue to shut down the US shale players and are just now interested in reducing production to increase the price of oil. An increase that would incentivize the shale players.
Again not enough details but I have no doubt that some fields are being produced at a damaging high rate that will reduce URR. I’ve seen that happen a number of times over the last 40 years. And typically during lower price periods.