The reduction of oil output in Iran has made the global energy market nervous,
but rising Iraqi production and a boost to the GCC’s output has proved calming. The drama on the global energy stage never seems to end, but it rather continues to throw surprises and ends up influencing prices. The official European Union-
imposed embargo on Iranian oil, including a ban on insurance of Iranian oil
supertankers, has played a major role in keeping crude price toward the north. While Iran is bad news, Iraq is an emerging giant. The comparative
stability in Iraq has enabled the nation to become the second largest producer by pumping three million barrels per day in July – replacing Iran where oil production was below 3mbpd in July. Iraq has signed several contracts in the past few years and it is the country’s policy to sign more oil contracts with foreign oil firms such as Exxon Mobil, Royal Dutch Shell, British Petroleum, France’s Total,
Russia’s Lukoil and China’s CNPC to
develop oil infrastructure and to acheieve goals. The country’s new target is to
produce 12mbpd by 2017. The UK-based Centre for Global
Energy Studies, in it recent monthly oil report, said oil prices rebounded sharply in June, with the price of Dated Brent jumping by 20 per cent between June
21 and July 18. “A number of factors have combined to push oil prices back up above $100/bbl, with the formal imposition of the UN embargo on imports of Iranian oil and, perhaps more importantly, a ban on the insurance of vessels carrying Iranian oil high on the list,” said a CGES statement. “However, Iran is not the only factor that has contributed to the rebound in crude oil prices. Although the global economic outlook has weakened again, markets now appear to expect this weakness to result in further economic stimulus measures in the United States, the
EU and even in China. “Despite the apparent huge over‐
supply of oil during the first half of 2012, the market is not reacting as though it is awash with crude. Reported stock figures have not risen by the 1.8mbpd suggested by the imbalance between global oil
supply and demand over the past six months, while the prospect of oil workers striking in Norway was enough to send oil prices up again,” it said. Another upbeat development in the Middle East and North Africa region comes from Libya, where according to the CGES the oil rig equipment that was moved out of Libya to neighboring countries as the fighting intensified during the early part of 2011, have subsequently been returning to Libya. The Organization of Petroleum Exporting Countries (Opec) estimates that active rigs are now back at levels close to those seen before the Libyan revolution began.
