OPEC will be holding its ministerial meeting on Thursday. Iran-Saudi
rivalry is expected to dominate the discussions on the level of crude production
and its effect on oil prices. Iran is expected to push for production cuts,
with Iraq supporting that position, and the Saudis will push for higher
production levels to keep a lid on prices. The disagreements might be too deep
to be resolved during the meeting and the 12-nation group will likely leave
output unchanged.
Source: AP, 13 July 2012
Sanctions against Iran have already cut into exports of Iranian crude
— from about 2.5 million barrels a day last year to reportedly between 1.2 and
1.8 million barrels now. The EU embargo on Iranian crude that goes into effect
on 1 July will tighten the squeeze. It would then be in Iran’s interest to have
all OPEC countries cut their production as well to keep the prices high, a very
unlikely outcome. Iran is also concerned that the Saudis would increase supplies
to soften the blow after the 1 July embargo of Iranian crude by the EU and has
warned the Saudis against it.
“Saudi barrels have already been replaced Iranian barrels from the
partial embargo in place, and they will replace even more barrels after July 1st,”
said Jason Schenker of Prestige Economics. “As such, there is going to be some
serious tension between the members at this OPEC meeting.”
Source: AP, 13 July 2012
4 comments:
the Saudis have already shown that they have the capacity to replace every single barrel of the 2.5 million that Iran, back in the good old days, used to export.
it is ,however, doubtful, that the Saudis will be able to keep pumping and exporting that extra 2.5 million for much longer than 100 years.
Saudi barrels will replace Iranian barrels and they will be richer for it.
This is what happens when you have ignorant members of society take control of the helm of a ship when in reality they can't even row a boat.
Anon 6:36 PM
it is ,however, doubtful, that the Saudis will be able to keep pumping and exporting that extra 2.5 million for much longer than 100 years...
... or even less than a decade! In fact, Saudi oil production did hit a snag last year (see link below).
Saudi Arabia burns its own crude to keep cool, limiting the amount of oil it can export
thanks for the link, but that's really not much of a snag.
Post a Comment