Medio Oriente, Arabia Saudita, Opec, USA
– Due le principali sfide poste all’OPEC, l’Organizzazione dei Paesi Esportatori di Petrolio, che produce ancora il 40% del petrolio mondiale, ma la cui supremazia si è andata indebolendo.
– 1. una sfida a breve termine rappresentata dalla nuova ondata di produzione extra Opec, in particolare forte crescita della produzione petrolifera degli USA, a circa 8 milioni di b/g, e in Canada, +1 milione b/g negli ultimi due anni; previsione di +1mn. b/g anche per il 2014;c’è poi la potenzialità del Brasile.
– Una controtendenza a breve al rischio di calo dei prezzi OPEC è dato dalla domanda dei paesi asiatici emergenti; sul lungo termine determinanti per l’andamento dei prezzi sarà la dimensione della crescita asiatica e la produzione globale non Opec.
– questo ha portato ad una co-dipendenza tra Opec e paesi emergenti asiatici, soprattutto India e Cina. La Cina ha grossi progetti con Arabia, Irak e Iran; ma anche con il Venezuela; importa dall’Angola, membro Opec, il 15% del petrolio.
– Anche l’India ha forti legami con i paesi Opec, è il maggior acquirente della Nigeria.
o(Storicamente Iran e Irak hanno cercato di mantenere bassa la produzione, per avere prezzi forti, mentre l’Arabia era per il rovescio, per mantenere all’Opec la quota di mercato rispetto alle energie alternative; essa può accontentarsi di vendere a $85/b; gli altri produttori della regione hanno bisogno di vendere ad almeno $100/b)
– Il conflitto Arabia Saudita-Iran sulle quote petrolifere potrebbe avere riflessi anche su questioni regionali, guerra civile in Siria, influenza iraniana sulle regioni confinanti con l’Arabia e sulla sua regione petrolifera sciita, la Provincia Orientale.
– Tra i membri Opec, (Arabia Saudita, Iran, Irak, Kuwait, Venezuela, EAU, Qatar, Indonesia, Libia, Algeria, Nigeria, Ecuador, Gabon, Angola), oggi sono l’Arabia Saudita e in parte gli EAU, Qatar e Kuwait sono ancora in grado di controllare i livelli di produzione.
– Indonesia, Libia, Algeria, Nigeria, Ecuador, Gabon e Angola devono mantenere la produzione per finanziare il bilancio statale.
– Da un rapporto Opec: nel 2012 gli introiti derivanti dall’export petrolifero Opec ha raggiunto il record di $1 260 Miliardi.
– Il miliardario principe saudita Alwaleed bin Talal, nipote di re Abdullah, grande investitore internazionale che possiede quote in Apple, Citigroup, Time Warner, Twitter e News Corp, che è proprietario di Dow Jones &Co, editore del Wsj,
– avverte: la produzione Usa di gas e petrolio ridurrà la domanda per la produzione Opec. Il bilancio dell’Arabia Saudita dipende quest’anno per il 92% dal petrolio.
– The prospect of revitalized oil production in Iraq and Iran may add to tensions between those two countries and Saudi Arabia over export quotas. On Dec. 4, representatives of the Organization of the Petroleum Exporting Countries (OPEC) will meet in Vienna to discuss a number of topics.
– First, OPEC’s historically biggest consumer – the United States – is rapidly increasing its own domestic production.
– At the same time, OPEC must deal with plans to expand oil production envisioned both by Iraq and Iran, which could lead to lower prices than the cartel desires. Ultimately, however, emerging markets in Asia will set global demand, and their energy thirst will determine the scale of the problem OPEC faces.
– OPEC was organized in the early 1960s by Saudi Arabia, Iran, Iraq, Kuwait and Venezuela with the primary goal of unifying the five countries’ oil export policies – and hopefully dictating a high price for their oil. The five countries certainly possessed that power when the cartel was initially formed, and while the cartel still produces about 40 percent of the world’s oil, OPEC’s dominance has declined over the years.
– Today, only Saudi Arabia and to a certain extent the United Arab Emirates, Qatar and Kuwait retain the ability to voluntarily adjust production levels.
– OPEC’s other members – Indonesia, Libya, Algeria, Nigeria, Ecuador, Gabon and Angola – must maintain production to finance their national budgets. Effectively, this means that OPEC wields nowhere near the power it once did. Even a producer of Saudi Arabia’s size is barely able to change the price of oil through boosting or cutting production.
– A new wave of oil production outside the cartel has already hit. Production in the United States has increased to an estimated 8 million barrels per day – the highest level since the 1980s. Elsewhere, production is set to take off in Canada and potentially Brazil.
– At the same time, increased production outside OPEC is dwarfed by the ambitious expansion plans put forward by OPEC members Iraq and Iran. While production outside the cartel is manageable, together with Iraq and Iran’s plans it could represent a significant threat to oil prices in the latter half of the decade.
– Iraq’s energy sector has been revitalized after the past five years and is now producing nearly 3.5 million barrels per day. Its oil ministry has set several ambitious goals, including production hitting 9 million to 10 million barrels per day by 2020.
– Iran, too, sees prospects for boosted production on the horizon. Complementing the negotiations with the United States on a possible long-term rapprochement, Iranian President Hassan Rouhani has started a significant reform campaign hoping to bring oil production back to the pre-sanction level of 4.2 million barrels per day within six months and increase it to the pre-revolution level of 6 million barrels per day within 18 months. To be clear, both goals are not attainable within their respective time frames, but significant increases are possible.
– The amount of production that comes online in Iraq will largely depend on two factors. First, the political system and violence will shape the pace of investment and regulatory procedures, such as issuing contracts and permits.
– Second and more important, there are logistical limitations to bringing online that level of production in such a short period of time. Some of these limitations can be overcome with proper coordination between international oil companies, oil services providers, the Shia surrounding the Basra region and the various political interest groups in Baghdad. Adroit cooperation between all of these parties is unlikely, meaning Iraq will fall short of Baghdad’s lofty goals, but Iraq can reach about 5 million to 6 million barrels per day by 2020, and closer to 6 million to 6.5 million barrels per day within a decade.
– For Iran, the challenge is somewhat simpler, since its limitations are largely caused by external sanctions. As seen in other countries, typically when oil production has been interrupted following regime change, sanctions and other causes, production levels rarely reach the level achieved prior to the disruption.
– However, should sanctions be removed, Iran could quickly revive about half of its offline production within 12 to 18 months – about 500,000 to 750,000 barrels per day. In the longer term, there are some reasons to believe that Iran could buck the trend and increase its production back to previously achieved levels, and perhaps even increase it, but the time frame would be measured in years, not months. All of this, of course, is subject to geopolitical events that could slow the process down or stop it entirely – such as internal backlash in Iran and a slow timetable for negotiating with Washington. After bringing shut-in production back online, Iran (like Iraq) is more likely to slowly increase its daily oil production by about 250,000 to 300,000 barrels per year, pushing Rouhani’s goals to after 2020.
– OPEC is facing short-term and long-term challenges. In the near term, rising production in the United States and Canada has been unexpectedly quick – increasing by 1 million barrels per day in each of the past two years. Although most of the U.S. increase has been offset by production taken offline due to instability in Libya, added U.S. exports have already forced Saudi Arabia to reduce production levels at times to maintain prices. U.S. production is set to grow by another 1 million barrels in 2014, potentially straining OPEC’s preferential price points.
– In the longer term, Iran and Iraq’s production is the key issue. Should Iran and Iraq together boost production to a reasonably achievable level of 11 million barrels per day by 2020, that would represent an increase of 5 million-6 million barrels per day above present levels.
– OPEC’s export quotas have already been a source of tension among its members, but producers have always found ways to skirt around them. That may no longer be possible. While Iran’s domestic consumption will increase significantly, the potential export increases are still too high for Saudi Arabia to offset.
– This will cause stress within the organization among regional rivals Iran, Iraq and Saudi Arabia. Saudi Arabia may ask Iran and Iraq to voluntarily limit export growth, but without other incentives there is no reason to believe they would do so when it is in their short-term economic interest to boost exports as much as possible.
– Increased exports by Iran and Iraq also play into the broader rivalry between Saudi Arabia and Iran over issues such as the Syrian civil war and Iranian influence in Saudi Arabia’s border regions as well as its oil-producing Shiite-dominated Eastern Province.
– Historically, Saudi Arabia has argued for increased production from the cartel to preserve OPEC’s market share, since high prices have helped encourage alternative energy development elsewhere, whereas Iran and Iraq have argued for moderate production levels and strong prices.
– Additionally, while Saudi Arabia can afford to sell oil at $85 per barrel, many of the governments surrounding it need prices at or above $100 per barrel, and Riyadh does not want to see its neighbors engulfed in even more turmoil than they already are due to lower oil revenue. Iran and Iraq are pursuing this boost for their long-term production and believe they can do so without reducing prices by relying on increased demand from developing Asian markets.
– Asia is now the world’s biggest net importing region – bigger than Europe and North America combined. Naturally, this has led to increased codependence between OPEC and developing Asian countries, principally India and China.
– Indeed, China has massive projects with Saudi Arabia, Iraq and Iran. China’s footprint has expanded dramatically in Venezuela and it imports about 15 percent of its oil from OPEC member Angola. India has also deepened its connections to OPEC countries and has emerged as Nigeria’s biggest customer.
– As OPEC’s biggest customer, Asia will continue its strong demand in the near future, and so stress on OPEC will not necessarily mean lower oil prices.
– The impact on long-term prices is less certain, however; the price will be determined not only by the size of Asian growth in the future, but by global oil supplies in non-OPEC countries as well.
– While OPEC historically has been used as a political tool to increase oil prices or place an embargo on exports, as can be seen from the 2008 price spike, OPEC’s modern challenge is more concerned with keeping oil prices reasonably low, not artificially raising them or embargoing oil.
– In order to preserve its long-term health, OPEC will need to preserve relatively low oil prices, both to ensure that developing markets in Asia can afford to keep buying the oil and to prevent alternatives such as shale oil, electric cars or natural gas-to-liquids technology from becoming more economically feasible. Furthermore, tempered oil prices for consumers in Asia will only reinforce the region’s economic growth, contributing to increased demand for OPEC’s oil.
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Shale Threatens Saudi Economy, Warns Prince Alwaleed – Investor Says Kingdom’s Economy Increasingly Vulnerable
– Saudi billionaire Prince Alwaleed bin Talal has warned that the kingdom’s oil-dependent economy is increasingly vulnerable to rising U.S. energy production, breaking ranks with oil officials in Riyadh who have played down its impact.
– In an open letter dated May 13 addressed to Saudi Oil Minister Ali al-Naimi and several other ministers, a link to which was published Sunday on Prince Alwaleed’s Twitter account, he warned that the boom in U.S. shale oil and gas will reduce demand for crude from members of the Organization of the Petroleum Exporting Countries.
– Not long after the prince issued his warning, a report from OPEC published Monday showed the group’s oil export revenue hit a record high of $1.26 trillion in 2012.
– However, forecasts from the group raise questions over whether that level of earnings can be sustained amid the competition from shale oil.
– Saudi Arabia, the world’s biggest oil exporter, is now pumping at less than its production capacity because consumers are limiting their oil imports, Prince Alwaleed said in the letter. This means the kingdom is "facing a threat with the continuation of its near-complete reliance on oil, especially as 92% of the budget for this year depends on oil," said the prince.
– Prince Alwaleed, a nephew of Saudi King Abdullah, is a major international investor, with stakes in Apple Inc., Citigroup Inc., Time Warner Inc., Twitter and News Corp, which owns Dow Jones & Co., publisher of The Wall Street Journal.
– In contrast to Prince Alwaleed, Mr. Naimi, the Saudi oil minister, has so far played down the significance of rising shale-oil production, despite the fact that some OPEC members, such as Nigeria and Algeria, have seen a sharp drop in their exports to the U.S. At an OPEC meeting in late May, he said it wasn’t the first time OPEC has had to compete with a surge in output from countries outside the group.
"We disagree with your Excellency on what you said, and we see that rising North American shale gas production is an inevitable threat," Prince Alwaleed’s letter said, in comments directed at Mr. Naimi.
Neither Mr. Naimi nor a spokesman for the ministry could be reached to comment.
– Despite posting record revenues from oil exports in 2012, OPEC data showed some members’ earnings were already under pressure.
– Algeria’s oil-export revenue fell last year by 6% and the selling price of its flagship Saharan Blend crude was down by 1.3%, compared with the previous year. Algeria has seen its oil exports to the U.S. fall sharply and earlier this year its finance minister, Karim Djoudi, said lower oil export revenue tied to mounting shale production could force the government to cut domestic spending.
– Oil revenues in Iran, whose oil exports have been sharply curtailed by Western sanctions, fell 8% to $133 billion, according to OPEC data.
OPEC data suggests other members could soon face an earnings squeeze.
– The group expects demand for its crude to fall to 29.6 million barrels a day next year, 600,000 barrels a day lower than in 2012, because of rising production outside the group. The average price of the group’s main crude export grades so far this year has been 4% lower than last year, OPEC data show.
– The International Energy Agency expects demand for OPEC crude to decline again in 2015 to 29.2 million barrels a day, before starting to rise gradually in the following years.
Prince Alwaleed also warned in his letter that competition from shale oil means Saudi Arabia won’t be able to increase its crude production capacity to 15 million barrels, adding to a rare public disagreement over whether Saudi Arabia should expand its current production capacity of 12.5 million barrels a day.
– In April, Prince Turki al-Faisal, a former Saudi intelligence chief and ambassador, said the kingdom needs to increase its crude production capacity to 15 million barrels a day by 2020 in order to meet rising domestic consumption and maintain its export capacity. Mr. Naimi has ruled out increasing Saudi Arabia’s capacity until at least 2030 or 2040.