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Oil’s Next Casualty: Government Budgets

The 56 percent drop in oil prices in the last six months is fueling more than just jet engines and road trips. It’s also burning through the cushy budget surpluses enjoyed by some of the world’s biggest oil-producing nations.  Saudi Arabia, the world’s top producer of crude, will see the budget surplus it has enjoyed in the past turn into a deficit of 4.7 percent of gross domestic product this year, according to the median estimate of eight economists surveyed by Bloomberg. That would be the first shortfall since 2009, according to  International Monetary Fund  data. The Middle Eastern nation, which derives about 90 percent of its budget revenue from oil, recorded a surplus of 8.7 percent of GDP in 2013. (Data for 2014 surpluses or deficits aren’t yet available in many countries, so we’re using 2013 for comparisons.) Oil exporters Kuwait, Qatar and the United Arab Emirates will also see their surpluses […]

Posted On : Published By : Tom Whipple
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Fossil Fuel Subsidies Fall in Gain for Renewables

(Bloomberg) — Countries from Mexico to Germany and Malaysia are increasingly taking advantage of cheap oil by trimming fossil-fuel subsidies, easing the way for renewable power that can help the environment, according to the chief economist of the International Energy Agency. With the global cost of crude cut by more than half, Fatih Birol said the IEA has scrapped a forecast that had subsidies reaching $660 billion by 2020. In the group’s latest report, fossil fuel producers were paid $548 billion in 2013, a $26.5 billion decline that was the first drop in four years. At least 27 nations are decreasing or ending the subsidies that hold down costs for fuels used to generate electricity, including coal and natural gas, the IEA reported in November. That’s adding momentum to global efforts to limit greenhouse gases by increasing the use of clean energy. “In the absence of subsidies, all of […]

Posted On : Published By : Tom Whipple
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Senate Committee Passes New Iran Sanctions Legislation

WASHINGTON—The Senate Banking Committee easily approved a new bipartisan sanctions bill Thursday on Iran, raising the likelihood that new financial penalties on Iran will be passed into law before a final June diplomatic deadline for an agreement on Tehran’s nuclear program. But politics will be a big factor in the fate of the legislation. Majority Leader Mitch McConnell (R., Ky.) could send the bill to the floor at any time now that it has passed out of committee. Earlier this week, Democratic lawmakers including the bill’s co-author, Sen. Robert Menendez (D., N.J), pledged not to support a vote on the bill until after a March deadline set by negotiators to reach a political framework. A final agreement is due by the end of June. As a result of that Democratic pledge, Mr. McConnell is considered by many to be unlikely to call up the bill for a floor vote […]

Posted On : Published By : Tom Whipple
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Libyan crude oil came to USGC in November, first time since mid-2013: EIA

Houston (Platts)–30Jan2015/520 am EST/1020 GMT Crude oil from Libya was imported to refiners in the US Gulf Coast in November for the first time since August 2013, according to data released Wednesday by the US Energy Information Administration. In November, two Aframaxes arrived in the Gulf Coast from Libya, chartered by BP and Citgo, carrying 32.5 and 36.6 API crude, respectively, and both with a sulfur content of 0.14%, the EIA data showed. The BP-chartered cargo delivered to Oil Tanking PL in Houston carrying 449,000 barrels, while the cargo chartered by Citgo headed to Lake Charles, Louisiana, where Citgo owns a 425,000 b/d refinery, contained 552,000 barrels. Platts cFlow ship-tracking software shows the EuroChampion 2004 deported from Ras Lanuf on October 18, and arrived at Offshore Galveston Lighterage on November 5. The Nissos Delos left the port of Marsa el Hariga on October 27, and arrived the Port of […]

Posted On : Published By : Tom Whipple
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With compromise budget, Iraq buys some time

Members of Parliament gather to vote on Iraq’s new government in Baghdad on Sept. 8, 2014. (THAIER AL-SUDANI/Reuters) Iraq’s Parliament passed the 2015 budget Thursday, including spending reductions and provisions governing the relationship between Baghdad and the autonomous Kurdistan region. The new budget also leaves key questions unanswered. For example, it is not clear how Iraq will find additional financing if the price of oil remains so low; how leaders in Baghdad and Erbil will reconcile competing interpretations of their past and future obligations; or how southern provinces will respond to the disap…

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Government Allies Are Said to Have Slaughtered Dozens of Sunnis in Iraq

BAGHDAD — Some of the men were shot on their doorsteps, their bodies left crumpled in the streets. Others were lined up, led to a field and killed there. Their relatives, ordered to stay in their homes, heard the gunfire. At least 72 people from a majority Sunni village in eastern Iraq were methodically singled out for slaughter this week, according to witnesses and local Sunni leaders, who said the victims were killed by Shiite militiamen who were supporting Iraqi security forces. A spokesman for Iraq ’s prime minister said Thursday that the government was investigating the claims. Some local security officials in Diyala Province have asserted the victims were militants killed in battle by the security forces, denying that sectarian executions had occurred. But witness accounts suggest that is what happened in the village of Barwanah starting on Monday. Several survivors described seeing a column of troops drive […]

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Baghdad-Erbil cooperation fraying

Iraqi Oil Minister Adil Abd al-Mahdi (L) meets with Kurdistan Prime Minister Nechirvan Barzani in Erbil on Nov. 13, 2014. (STRINGER/Reuters) Recommend 898 people recommend this. Sign Up to see what your friends recommend. A cooperative oil export and revenue sharing agreement reached by Iraq’s federal government and Kurdistan region is in danger, with the two sides failing to meet each other’s expectations. The dispute over oil exports nearly derailed the passage of the 2015 budget, which was approved by Parliament on Thursday, as MPs demanded language be amended to explicitly forbid the KRG from exporting oil independently of the federal government. Much remains to be reconciled, however, as the disappoin…

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Bombs in central Baghdad kill 12: security sources

BAGHDAD (Reuters) – At least 12 civilians were killed on Friday morning when two bombs exploded in central Baghdad, security sources said. An initial blast in the Bab al-Sharqi district was followed by a car bomb, the sources said. At least 30 people were also wounded in the attack. The area is home to a large market and lies across the Tigris river from the Green Zone, which houses most government buildings. Bombings are frequent in Baghdad, where Sunni insurgents from Islamic State, which controls large swathes of territory in Iraq’s north and west, regularly target Shi’ite neighborhoods with car bombs. At least 21 people were killed on Thursday in bombings at five separate locations and a shooting on the outskirts of Baghdad. (Reporting By Stephen Kalin; Editing by Crispian Balmer )

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Explorers Curb 2016 Drilling Plans in Namibia on Oil-Price Drop

(Bloomberg) — The plunge in crude prices to below $50 a barrel has curbed oil and gas explorers’ plans for drilling in Namibia next year, the country’s petroleum commissioner said. “We have at least three majors which have indicated to us that they will be drilling in 2016, Immanuel Mulunga said by phone on Thursday from the capital, Windhoek. ‘‘I am more confident of three instead of five or six’’ announced last year, he said. While Namibia was interesting to explorers ‘‘way before’’ oil rose to $100 a barrel, ‘‘the current trend is worrying,’’ Mulunga said. Explorers are cutting back or delaying projects and drilling plans after crude plunged more than 50 percent since June. Basins off Namibia have attracted attention from the world’s biggest oil explorers on a bet that the southwest African nation’s coastal shelf may mirror that of Brazil across the Atlantic and neighboring Angola, the […]

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Saudi King Reshuffles Cabinet, Keeps Oil Minister in Place

ENLARGE Saudi Arabian Oil Minister Ali Al-Naimi retained his post in a government shake-up Thursday, but King Salman canceled the kingdom’s top oil decision-making council. Photo: European Pressphoto Agency Saudi Arabia’s new king announced Thursday a shake-up of the kingdom’s government, but kept veteran Oil Minister Ali al-Naimi in place. Mr. al-Naimi, who has been the kingdom’s oil minister since August 1995, was instrumental in the recent decision by the Organization of the Petroleum Exporting Countries, or OPEC, to keep its oil production target steady , a move that has since sent global oil prices into a tailspin. But King Salman canceled the Supreme Council for Petroleum and Minerals, which has been traditionally kingdom’s top decision-making body on oil, according to royal decrees announced on the state-owned television. The council was led by the king and includes senior royal family members, ministers including Mr. al-Naimi and top industry executives. […]

Posted On : Published By : Tom Whipple