The new OPEC Monthly Oil Market Report just came out with their Crude Only production numbers for May. All data in the OPEC charts are in thousands barrels per day.
There was very little in production changes and no surprises in the May data. Total OPEC production was up 142,000 barrels per day and that was after the April numbers had been revised up by 29,000 bpd.
Everyone is concerned about Iraq. Iraq’s April numbers were revised down by 22,000 bpd and May production was up 18,000 above that revised number. Iraqi production stood at 3,331,000 bpd in May but I expect that number will change in June and most definitely in July.
Of course everyone is concerned about Saudi Arabia. Nothing much happened to Saudi Production in May either. April production was revised up 35,000 bpd and May production was up 32,000 above that. Not a big move for Saudi. Saudi Crude Only production stands at 9,646,000 bpd.
Iranian production is creeping up but very slowly. April production was revised up 12,000 bpd and May production was up 18,000 on that to 2,799,000 bpd.
Libyan production is still way down and continues to decline. April production was revised down by 16,000 bpd and May production was down 19,000 bpd below that to 203,000 bpd.
The page OPEC Charts has been updated with the May production numbers of all OPEC nations.
All eyes on Iraq. Things there can only get worse, a lot worse.
Militants Vow to March on Baghdad After Seizing Key Cities
The capital, with its large Shiite population, would be a far harder target for the militants. So far, Islamic State fighters have stuck to the Sunni heartland and former Sunni insurgent strongholds where people are already alienated by the Shiite-led government over allegations of discrimination and mistreatment. The militants also would likely meet far stronger resistance, not only from government forces but by Shiite militias if they tried to advance on the capital.
What has happened so far is the Sunni militants have taken over the Sunni dominated sections of Iraq. That’s why the rebels had such an easy time of it. They found no resistance because the populace welcomed them with open arms. But most of Iraq is Shiite and that includes Bagdad. All the easy conquest are over, it will get bloody from here on out.
Iraq oil shock could kill world economic recovery, experts warn
As violence threatens Iraq’s oil industry, experts fear crude at $130 per barrel would damage the global economy.
“The worst case scenario is that we see production from Iraq slip down to levels in the last Gulf war, then oil could spike $20 a barrel very quickly,” Ole Hansen, vice-president and head of commodity strategy at Saxo Bank told The Telegraph.
“In that scenario, the entire economic recovery, which is still fragile, could stall and we could even slip back into recession in some regions.”
White House mum on pleas from Iraq for airstrikes, as militants gain ground
The Obama administration reportedly has rebuffed calls from the Iraqi government to carry out airstrikes against Al Qaeda-aligned militants who are on a violent march that is threatening to take over the nation’s north.
Should the U.S. help out with air strikes, or even perhaps move troops back into Iraq? My opinion, not just no but hell no! The Shia and the Sunni have been fighting each other for over twelve hundred years and they will continue to fight each other forever or until one of them is completely killed off, which ever comes first. We should never have gone into Iraq and for damn sure we should never go back into Iraq.
Davy, Hermann, MO on Fri, 13th Jun 2014 6:23 am
The Iraqi capital is a whole other fish to catch for these rag tag insurgents especially if Iran and or the US chips in. We just witnessed the de-facto division of Iraq. If these boundaries remain we will not see much damage to Iraq production. We know the Kurd will efficiently bring their production to market and what a prize if they can hold on to Kirkuk. The south of Iraq is in good shape with foreign investment and new infrastructure upgrades. The Sunni’s will get on board with making money and do their part for their own needs. This may actually increase Iraqi production in a year or so. I am not sure if that is enough time to mitigate the dropping world production and the inching up of demand. We are at a critical point in our global economic history where we are seeing limits of growth and diminishing returns in action. Production is stalling but so is the potential at any moment for demand to stall and decline rapidly. This is what an undulating plateau looks like near its end when its tail starts flapping and bobbing around with an unraveling. In the next 18 months the direction will be decided and at that point it will never go up. We are near the pinnacle of human growth, technology, complexity, knowledge, connectivity, and energy intensity. It will be all downhill with ugly consequences. Predicting a home for us in 5 years is folly but it will be an anathema from the above described pinnacle.
bobinget on Fri, 13th Jun 2014 8:46 am
There will be very little diminution of crude shipments
out of Iraq. Only differentiation as to which port or pipeline will be of interest for some.
The nation has already been pro forma, divided.
If US neocons convince our Commander in Chief to bomb something, bets are off.
All this talk of ‘taking Baghdad’ is pure, unadulterated bull pucky. There will be NO last stand in Baghdad.
Iraq is divide along religions and political lines and that’s that.
All Iraq’s people are crying out for is peace after decades of wars. If sectarian killing stops, Iraq will get back to making beautiful carpets and being world’s #2 oil producer.
rockman on Fri, 13th Jun 2014 9:39 am
At the moment I see potential disruption, if not entire curtailment, solely at the discretion of the insurgent group. If the Iraq military is incapable of defending entire cities how could one expect them to protect pipelines and oil processing centers. Folks need to refresh their memories and look at a map of Iraq. At 60 mph it’s about a 3 hour drive from he insurgent held territory to Baghdad. And the another 3 hours to the major oil production infrastructure. And the insurgnt
rockman on Fri, 13th Jun 2014 9:44 am
And the insurgents need not capture and hold the oil fields. A few hundreds pounds of C4 in the right spots and Iraq exports probably fall close to zero. And that’s the big question IMHO: what is the current priority of the Iraq military: protect citizens/cities, the gov’t officials, the oil fields or perhaps themselves?
Northwest Resident on Fri, 13th Jun 2014 9:54 am
rockman — Great question. Another one might be, what is the priority of the insurgents? To take Baghdad and perhaps gain control over functioning oil fields, or to simply blow up and destroy anything and everything? Who knows what those rascals are up to. Whatever it is, there is a good chance that a lot of those insurgents would like nothing better than to destroy the global economy and western control over their region. A few hundred pounds of C4 placed in the right spots just might do the trick.
John D on Fri, 13th Jun 2014 10:09 am
Saudi Arabia has been quite coy about whether it has the capability to ramp up its production. This may force their hand to admit there is not much more behind the curtain.
Northwest Resident on Fri, 13th Jun 2014 10:41 am
What is the priority of the insurgents?
From the Washington Post:
In fact, there’s more than one (priority). That’s because the insurgents are actually several groups of people who might share tactics, but possess different motivations and long-term objectives. … one group of the insurgency: those who were fired from their jobs in the military and other government institutions for being members of the Baath party but who don’t really believe in Saddam Hussein’s doddering old brand of Arab socialism. But two other important factions of the insurgency — the die-hard Baathists and the pro-al Qaeda Islamist militants… Promoting instability by disrupting public services and crippling the security apparatus of the new Iraq is the heart of their strategy.
Goal of former Saddam loyalists: The return of Baathist rule through a military coup.
One Syrian combatant told a reporter, who was posing as a local resident, that he was in Iraq fighting the United States because “if we don’t fight them here, we will have to fight them in Syria.”
Although the disparate insurgent allies are fighting different wars for different reasons, for now they are fighting the same battle — destroying the current Iraqi government and driving out the Americans. One wants a return to rule by Saddam or some other Baathist; another wants a Taliban-style Iraq. But they’re all waiting for the United States to leave.
washingtonpost dot com/wp-dyn/content/article/2005/05/07/AR2005050700152_2.html
Davey on Fri, 13th Jun 2014 10:44 am
Wait until they are hungry then they will be trading oil for food with the Americans they hate
Perk Earl on Fri, 13th Jun 2014 11:13 am
“At the moment I see potential disruption, if not entire curtailment, solely at the discretion of the insurgent group.”
Absolutely right Rockman, as they will undoubtedly use oil infrastructure as hostage against US attacks. Can’t you just hear it now, “attack us and we’ll blow up this refinery, or pipeline, or both, etc.” All wars are won and lost based on power; to inflict casualties, to inflict economic strife (via oil flow reduction as an option in this case), take and hold positions (oil fields), humanitarian displacement and
so on.
Just look at what the Iraqi’s did to the Kuwaiti oil fields as they retreated. So even in a losing set of battles or even war, a lot of damage can occur. The insurgents also know how important the flow of oil is to the west. “Stop the flow of spice and all eyes will turn to Iraqis.” Dune
rockman on Fri, 13th Jun 2014 1:04 pm
NR had a good point: various subsets have different priorities. Some want the global western economy to crash. But the smart ones (who will hopefully control the other subgroups) should just want power. And they should know power = money = oil. They should want the global consumers to continue buying Iraq oil…as long as they get piece of the pie. Suicide bombers are cheap compared to armor and arty. The world didn’t mind buying from Saddam as long as he kept it in his pants. Unfortunately for him his ego drove him to start screwing the wrong people. Hopefully whoever ultimately controls Iraq oil will know how to keep the balance.
Davey on Fri, 13th Jun 2014 1:13 pm
Rock, one party we know has their shit together is the Kurds. Sounds like Kirkuk is their prize.
redpill on Fri, 13th Jun 2014 8:05 pm
Dammit Perk, you scooped my Dune quote.
And Davey, sure seems like the Kurds in Iraq are getting along just fine with Turkey, a key NATO ally.
How convenient for them there appears to be a new buffer state forming between them and Maliki.