GIF Energy Tracker

April 24, 2019

Global Spare Oil Production Capacity Increased to 3.3 Million b/d

In a statement by the International Energy Agency (IEA), the organization said oil markets are adequately supplied and “global spare production capacity remains at comfortable levels.”

IEA estimated the global spare production capacity to be at 3.3 million bpd (2.2 million from Saudi Arabia and 1 million from the UAE, Iraq, and Kuwait). The statement linked the increase of spare production capacity to the oil producers’ high compliance with the production cut agreement in the OPEC+ group.

April 23, 2019

Gulf States’ OPEC Members Are Ready to Increase Production

OPEC and oil industry sources said that Arab Gulf OPEC members are ready to increase production if there is a shortage in oil supply. This comes one day after the Trump Administration decided to not renew waivers for Iranian oil importers.

Reuters sources said that Saudi oil production for May is not expected to be much higher than April, while Saudi Energy Minister Khalid Al-Falih said that Riyadh will coordinate with other oil exporters to ensure adequate oil supplies to the market. Other sources in OPEC clarified that in order to increase output “There must be actual impact on the market and a real demand from customers,”

April 22, 2019

Trump Will Not Renew Iran Sanction Waivers

The White House said today in a statement that President Donald Trump will not renew Iran sanction waivers with intentions to bring Iran’s oil exports to zero. The statement said that the U.S., along with Saudi Arabia and the United Arab Emirates will ensure that oil markets are adequately supplied.

Oil prices rose to $73.87 a barrel on Sunday and Monday with reports that the waivers will not be extended.

April 19, 2019

Saudi Arabia Expects Oil Market to Balance in 2019

An official in the Saudi Energy Ministry expects the oil market to balance this year as a result of the oil production cut policy agreed between OPEC and its allies. Also, Russian Energy Minister Alexander Novak told reports in Moscow that Russia has been committed to the production cut policy.

April 17, 2019

India Looks for Replacement for Iranian Oil

Prior to the expiration of U.S. waivers to buy oil from Iran, officials from India’s state-owned refineries told Reuters they are confident of securing oil imports from the U.S., Mexico, Saudi Arabia or Iraq.

The four refineries did not place oil supply orders with Iran for May, while last year several refineries signed agreements with Baghdad to import Iraqi oil during 2019.

April 16, 2019

Oil Price Dropped and U.S. Oil Stockpiles Are Up

Oil price dropped slightly today after comments from Russia raised concerns about the renewal of the oil cuts agreed to by Russia and OPEC. Also, as analysts expected the U.S. oil stockpiles have increased by 1.9 million barrels last week, the fourth straight increase.
OPEC is set to meet in June to discuss the extension of the production cuts agreement to the end of 2019. In previous comments from officials in OPEC member-states, the cuts will be decided based on the status of oversupply in oil markets.

April 15, 2019

Investors Are Avoiding Iranian Oil

Bloomberg report said Tehran has offered investors as much as 6 million oil barrels in 2019 and only one deal was closed for the minimum of 35,000 barrels. This week Iran has offered another million barrels of light crude for a 6% down payment and 90 days of credit.

Iranian oil exports have significantly dropped since the U.S. reinstated sanctions in 2018. Deputy head of the Iranian Association for Energy Economics, Morteza Behrouzifar said: “Iran’s crude is sanctioned and under no circumstances can anyone buy Iranian crude except those who were granted waivers.”

April 11, 2019

OPEC May Raise Oil Production from July

Reuters report said OPEC might increase oil production starting from July if Iran and Venezuela oil production drops and prices increase.

Last month Venezuela’s oil production dropped to 1 million bpd, and it is expected that Iran’s oil exports will further drop in May.

OPEC is expected to meet on June 25-26 to decide whether or not to extend the oil cuts or not.

April 9, 2019

Saudi Aramco Issues $12 Billion in Bonds

Saudi Arabia issued $12 billion of bonds for its state-run oil company Aramco. The demand for Saudi Aramco’s debut offering was so robust it allowed the company to borrow at a lower yield than its sovereign parent. The high demand to buy Aramco’s debt has also helped to lower the borrowing costs for Riyadh.

The bond sale was managed by JPMorgan, Morgan Stanley, Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings Plc, and NCB Capital Co.

April 9, 2019

Oman Awards French Total Block 12 Exploration Rights

The Omani government awarded France Total 100% exploration and operatorship rights in onshore Block 12. The Block is spread over an area of 3860 square miles and believed to have significant gas resources.

Prior to that, Total, Oman’s Ministry of Oil and Gas and Oman Oil Company reached an agreement to execute their integrated gas project to develop gas resources in the Greater Barik area in Blocks 10 and 11. In 2018, Total’s oil production in Oman was 38,000 bpd.

April 8, 2019

Saudi Energy Minister Says OPEC and non-OPEC to Make a Decision on Oil Cuts Extension in May

Saudi Energy Minister Khalid Al-Falih said OPEC and non-OPEC members will meet next month to make a decision about the extension of oil cuts.

The meeting -also known as JMMC- will include major oil producers such as Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Nigeria, and Kazakhstan.

About the possibility of Saudi Arabia making more output cuts, the Saudi minister said “I don’t think we will need (to do more) … the market is on its way toward balance. We have done a lot more than others,”

April 2, 2019

Saudi Arabia Threatens to Stop Oil Trade in USD if NOPEC Passes

Reuters report said that Riyadh is threatening to use currencies other than U.S. dollar in its oil sales if NOPEC passes. The bill would expose OPEC member-states to antitrust lawsuits. The report mentioned that Riyadh has discussed the matter with other OPEC members, and communicated the threat to American officials.

April 2, 2019

Saudi Arabia’s Largest Oil Field Produces Less Than Expected

An Aramco report released yesterday revealed the real production capacity of the Saudi Ghawar oil field, the world’s largest at 3.8 million bpd, well below the 5 million bpd widely known in the oil market.

Ghawar’s production capacity suggested in the report is 33% less than the U.S. government estimations in 2017 when the U.S. Energy Information Administration listed Ghawar’s production capacity at 5.8 million bpd. Also, the new figure puts the U.S. Permian oil production basin as the largest world’s producer since it pumped 4.1 million bpd in March.

April 1, 2019

Survey Shows OPEC Oil Production Reached Four-Year low

According to Reuters survey, OPEC oil production during March reached a record low in four years due to Saudi Arabia’s production cuts and Venezuela’s sanctions and power outages.

The survey showed that OPEC member-states produced in March 30.40 million bpd, 280,000 less than February production. Also, last month 11 of the 14 OPEC member-states achieved 135% of the pledged cuts, 34% more than February. The biggest cuts came from Riyadh which produced 220,000 bpd less than February.

March 29, 2019

Japanese Refineries Halt Oil Imports from Iran

According to industry sources and data on Refinitiv Eikon, Japanese Refineries halted imports of Iranian oil ahead of the expiry of a temporary waiver on U.S. sanctions. The waiver expires in early May, however, Japanese refineries want to ensure enough time for all cargoes to arrive to Japan and payment to be completed.

As its imports of Iranian oil fell, Japan has increased imports from other Gulf states, in addition to Russia and the Americas.

March 27, 2019

Aramco Buys Majority Stakes in Sabic

Aramco reached a deal to buy majority stake in petrochemicals firm Sabic from Saudi Arabia’s sovereign wealth fund. In the deal Aramco will buy 70% stake in Sabic held by Saudi Arabia’s Public Investment Fund for $69.1 billion in a share purchase agreement.

The purchase is a major step for Aramco’s efforts to expand its footprint in refining and petrochemicals.

Public Investment Fund Managing Director described the deal as “a win-win-win transaction and a transformational deal for three of Saudi Arabia’s most important economic entities.”

March 26, 2019

Bahrain LNG Terminal Begins Operations in May

Bahrain’s LNG terminal within the Khalifa bin Salman Port facility in Hidd will starts commercial operations in May. The first LNG shipment will mostly be imported from the UAE’s Abu Dhabi National Oil Company.

Bahrain’s National Oil and Gas Authority Chief Executive Jassem al Shirawi said his country made agreements with more than 25  companies and countries to import LNG from around the world.

March 20, 2019

The U.S. is about to Claim Saudi Arabia’s Energy Exporting Crown

Rystad Energy research firm expects U.S. to surpass Saudi Arabia’s title as world’s largest exporter of oil, natural gas liquids and petroleum products.

Over the past decade, drilling innovation has increased shale oil production, and overall oil production in the U.S. has more than doubled in the last decade, which made the U.S. the world’s largest oil producer surpassing Saudi Arabia and Russia.

Saudi Arabia’s daily exports of oil, gas, and petrochemical liquids are 9 million barrels, exceeding the U.S. by one million barrel, a gap that will probably vanish according to Rystad experts.

March 20, 2019

Morgan Stanley Sees Oil Prices Rising to $75

Morgan Stanley sees oil prices rising to $75 by the third quarter of 2019. Analysts at the American banking and investment company are more convinced now that OPEC is able to drain oversupply in the oil market since it has extended its production cuts and could possibly increase them.

The analysts also linked their forecast to the deteriorated situation in Venezuela which could affect the country’s oil production.

March 19, 2019

Oman Awards Ibri II Solar Independent Power Project

A joint Saudi Kuwaiti companies consortium won a $400 million bid to develop the Ibri II Solar Independent Power Project for the Oman Power and Water Procurement Company.

The project has a generation capacity of 500 MW and will supply 33,000 homes with electricity which will offset 340,000 tones of carbon dioxide emissions a year.

March 19, 2019

OPEC Cancels April Meeting

OPEC members decided to cancel their meeting planned for April, leaving the current production cuts in place until the group’s usual meeting in June.

Saudi Energy Minister Khalid Al-Falih said OPEC expects the oil market to remain oversupplied until June, and the delay will allow the group to assess U.S. sanctions’ impacts on Iran and Venezuela oil production.

March 17, 2019

Iran Inaugurates Four New Phases of the South Pars Gas Field

Iranian President Hassan Rouhani inaugurated four new phases of the South Pars gas field. The field is the world’s largest gas field and it is shared with Qatar.

Iran has invested $11 billion to complete the new phases and it will increase its gas production capacity by 110 million cubic meters per day.

Oil minister expects gas production from the South Pars field to reach 750 million cubic meters per day by the end of this year.

March 15, 2019

Venezuela Oil Production Could Drop; Would Saudi Arabia Increase its Output?

The International Energy Agency warns that power failure in Venezuela could disrupt oil supplies, which raises expectations of Saudi Arabia’s intervention to balance the market and cover any supply shortages, mainly because Riyadh made the highest production cuts among OPEC members in the recent OPEC production agreement.

March 14, 2019

Iraq’s Oil Exports to Drop to 3.5 Million bpd in March

Iraqi oil minister said his country is planning to drop oil exports in March to 3.5 million bpd in compliance with Iraq’s quota decided by OPEC last January.

Iraq is OPEC’s second largest producer, and its new exports target is 100,000 bpd lower than Jan and Feb exports.

OPEC members will meet in Vienna next month to discuss extending production cuts till end of 2019.

March 14, 2019

India’s Oil Imports from Iran Drop 60% from Last Year

India’s oil imports from Iran dropped to 260,000 bpd in February 2019; 60% lower than February 2018.

Iran was the third oil supplier to India in February 2018, while now it is ranked the eighth.

The sanctions waivers provided by the U.S. to India allows New Delhi to import up to 300,000 bpd from Iran until May 2019.

March 12, 2019

Iran to Launch Four Development Phases At South Pars Gas Field

Iranian oil minister says his country will launch four new phases in the South Pars gas field with a production capacity 110 million cubic meters per day.

The field is the world’s largest gas field and it is shared between Iran and Qatar. Last month, Iran’s production capacity reached 610 million cubic meters per day.

Last year both French Total and China National Petroleum Corp ended the investment in the field as the U.S. re-imposed sanctions on Tehran.

March 11, 2019

Saudi Arabia to Cut Oil Production and Exports for April

Saudi official source said Riyadh’s oil exports on April will be 7 million bpd while demands are at 7.6 million bpd.

The new exports target will keep production well below 10 million bpd, also below Riyadh’s 10.3 million bpd production quota agreed with OPEC members.

The decision shows Saudi Arabia’s determination to regain control over oil prices.

March 8, 2019

United States to become World’s Leading Oil Exporter in 2019

CNN reports says the US will surpass Saudi Arabia in 2019 in the exports of oil and petroleum products to become the world’s leading exporter of oil.

This breakthrough is mainly attributed to technology which changed the landscape of energy market.

March 7, 2019

Saudi Arabia Discovers Large Quantities of Gas in the Red Sea

On March 7, 2019, the Saudi Minister of Energy Khalid Al-Faleh said his country has discovered large quantities of gas in the Red Sea.

The minister also reiterated Saudi Arabia’s Aramco plans to invest in the U.S. LNG sector.

March 4, 2019

Current OPEC’s Oil Production Cuts to be Extended Until June

According to Reuters, OPEC and its OPEC+ partners will likely extend the current oil production policy until June, instead of making a new decision during the upcoming meeting in April.

Last month supplies from OPEC members fell to lowest in four years, and today oil price went up 1% in light of reports about a possible agreement between China and the U.S. to end the “trade war”

February 28, 2019

Qatar Petroleum and ExxonMobil Discover Natural Gas Field in the Mediterranean

Qatar Petroleum and ExxonMobil announced discovering the world’s third largest natural gas field found in the last two years which approximately contains 5 to 8 trillion cubic feet.

The field was found off the coast of Cyprus in the Eastern Mediterranean. State-owned Qatar Petroleum and ExxonMobil won in 2017 the rights to explore the area for gas and oil.

February 27, 2019

Saudi Oil Exports to U.S. Gulf Refineries Down by Half

According to U.S. Customs data, Saudi oil shipments to U.S. Gulf refineries reached 2.69 million barrel in January and 1.6 million in February comparing to 5.75 million last year.

Total Saudi oil exports to the U.S. fell in the third week of February to 346,000 bpd, the lowest in almost nine years.

An expert expected West Coast refineries to continue importing Saudi oil due to limited supply options.

February 26, 2019

Bahrain Discusses with U.S. Oil Companies Developing Recently Discovered Fields

Last April Bahrain discovered its biggest oilfield since the 1930s with estimation to contain 80 billion barrels of tight oil.

Yesterday, Bahraini oil minister said Manama is considering the development of the oilfield by American companies with shale oil expertise.

February 26, 2019

Saudi Arabia Plans Major Investments in LNG

Saudi Arabia announces plans to become a major player in the growing natural gas industry and looking to make investments in Russia, Australia, the U.S., and Africa.

Saudi Aramco Chief Executive said: “Gas is a major market and we want to be one of the largest players,”

Riyadh is planning to increase its LNG export to 3 billion cubic feet per day by 2030, and replace the 800,000 oil barrels used daily to generate electricity with LNG.