Nigeria stands to continue to benefit from an improved oil revenue as the Organization of Petroleum Exporting Countries (OPEC) decided on Thursday in Vienna to extend cuts in oil output by nine months to March 2018 to further battle a global glut of crude. OPEC’s cuts have helped to push oil back above $50 a barrel this year, giving a fiscal boost to producers, many of whom rely heavily on energy revenues. Oil’s earlier price decline, which started in 2014, forced Russia and Saudi Arabia to tighten their belts and led to unrest in some producing countries, including Venezuela and Nigeria. In December, OPEC agreed its first production cuts in a decade and the first joint cuts with non-OPEC, led by Russia in 15 years. The two sides decided to remove about 1.8 million barrels per day from the market in the first half of 2017, equal to 2 per cent of global production. Despite the output cut, OPEC kept exports fairly stable in the first half of 2017 as its members sold oil from stocks.
Saudi Energy Minister, Khalid Al-Falih, has declared to do whatever it is necessary to cut crude output to be extended through all 2017. The organization of petroleum exporting countries (OPEC), whose Saudi Arabia is the leader member, has declared on the first half of this year to cut crude output by 1.8 million barrel per day, but foreign investitures do not agree. Anyway OPEC is confident it will be possible achieving an agreement by the second half of this year. It is expected it will grow the request of oil in the next 25 years, specially from countries such as Vietnam and Philippines, which are considered in the future in the top 20 global economies. The Energy Minister has also declared he trusts in the future oil project, it will see the involvement of ARMCO Industries and the Malaysia ones, which are going to realize a new project. This will meet the increasing demand of oil in the market.
South Korea’s March imports from Iran more than doubled from a year ago to a record of 18.54 million barrels, or 597,935 barrels per day (bpd), data from state-run Korea National Oil Corp (KNOC). For the JanuaryMarch period of 2017, Iran seized the No.2 spot with shipments of 46.73 million barrels, also more than double from the same period last year and the highest on record for a quarter. In the first quarter of 2016, Iran was South Korea’s fifth-biggest oil supplier behind Saudi Arabia, Iraq, Kuwait and Qatar, according to KNOC data. This year’s surge in Iranian crude supply came after Tehran was exempted from production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) to clear a global glut. Iran’s jump to the No.2 spot is also due to solid condensate demand from South Korean refiners such as SK Energy and Hyundai Oilbank. Saudi Arabia held onto its spot as South Korea’s top oil supplier for both March and the full quarter. Shipments from Saudi Arabia rose 10.8 percent in March from a year ago to nearly 26 million barrels, or 838,387 bpd, from 23.46 million barrels last year. In the first quarter, the world’s top oil exporter shipped 77.12 million barrels of crude to South Korea, up 4.4 percent from about 74 million barrels in the same period of 2016, according to the data. Overall, South Korea’s March imports increased 11.7 percent from a year ago to 95.9 million barrels, or 3.09 million bpd, the data showed. The world’s fifth-largest crude importer brought in 278.18 million barrels of crude in the first three months of 2017, up 4.9 percent from 265.3 million barrels last year.
Most oil producers support an extension of output cuts by OPEC and non-OPEC countries, and Iran would also back such a move, Iranian oil minister Bijan Zanganeh said. Zanganeh stressed that most countries want OPEC’s decision to be extended. The market has been oversupplied since mid-2014, prompting members of the Organization of the Petroleum Exporting Countries and some non-OPEC producers to agree to cut output in the first six months of 2017. “Iran does not consider India’s decision as a threat”, he said about India’s decision to cut oil imports from Tehran in 2017/18 by a fifth. “India is one of our good costumers, but we cannot sign (a) contract under threat. India’s cut of oil imports from Iran will not cause any trouble to us as we have other buyers”, Zanganeh added. “Gas exports from Iran to Iraq are definite. The process of gas exports to Iraq may start at any time. There is a financial problem which will be solved soon”, Iranian oil minister also stressed. “More than 50 mcm/d of gas will be exported to Iraq. On the other hand there is a little problem in exporting gas to Pakistan but our policies are clear”, Zanganeh said.
Taiwan is increasing oil imports from Iraqi Kurdistan as local refiners take advantage of an open arbitrage to buy high-sulphur crude that can replace supplies cut by OPEC. State-owned CPC Corp bought 1 million barrels of Kurdish KBT crude for the first time in the second quarter, and Formosa Petrochemical Corp has resumed purchases of this grade after a near nine-month break, company officials said.
Most participants of the meeting of ministers from the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers, which took place in Kuwait City on Sunday, supported the extension of an agreement on oil output cut by six months but the final decision will be taken in May and will depend on the situation on the market. The Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) includes ministers of three OPEC member states – Venezuela, Kuwait and Algeria – and two countries that not part of the cartel, namely Russia and Oman.
Libya’s oil production has climbed back to the level before clashes disrupted output three weeks ago and forced the OPEC nation’s two biggest oil ports to halt shipments. The global target for next month will be to reach 800,000 barrels a day. This objective is close to the previous oil output , before recent clashes, and in all case much more than before, the oil output has decreased to 260,000 barrels a day last August. However it is still lower than before Ghadaffi’s fall, production reached 1.6M barrels a day.
“Close cooperation among OPEC and non-OPEC countries is key to stabilize and raise oil prices,” has said the Iranian President Hassan Rouhani.
The countries should work together to secure implementation of the deals in the first half of next year. The Iranian President specified the position of Latin American countries in the Islamic Republic’s foreign policy and said the Islamic Republic has always attached great importance to its relations and cooperation with these countries, including Venezuela. The OPEC members agreed in November to reduce output by around 1.2 million bpd from January 2017, a move that bolstered crude prices.
In spite of the decrease of oil production decided by OPEC, the American oil companies recorded an increase of production. The decision of American companies has fueled a speculation that pushed up oil prices to $ 1.35 daily, compared with 10 cents of average. Some analysts suspect that there isn’t a long-term agreement between the OPEC countries about the amount of oil to be extracted.
The vice President of Russian energy giant Lukoil said that Russian President, Vladimir Putin, played an active part in bringing about the OPEC deal to cut oil production. Earlier, Reuters reported that Putin helped OPEC rivals Iran and Saudi Arabia set aside differences. Citing its sources, the news agency reported that Putin’s actions helped smooth the way for the deal as he acted “as intermediary” between Riyadh and Tehran. The Saudis had long insisted that Iran comply with the demand to cut production along with other exporters, while Tehran had continued to insist it should be allowed to restore output, as much of it had been lost during the years the country had spent under Western sanctions. Conflicts in Syria and Yemen have not helped relations between the Sunni kingdom and the Shiite Islamic Republic, and reports state that Saudi and Iranian OPEC negotiators had argued all through the run-up to Wednesday’s meeting. Two days prior to the Vienna gathering, Riyadh warned it would back out of the deal, threatening to boost production if Iran failed to contribute cuts. But according to Reuters, this is where the Russian leader stepped in. Citing a source close to Iranian Supreme Leader Ayatollah Ali Khamenei, the outlet reports that Putin discussed the deal in a phone conversation with Iranian President Hassan Rouhani. After the call, Rouhani and Iranian Oil Minister Bijan Zanganeh turned to the Ayatollah to explain their strategy, and subsequently received approval.