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Iran breaking economic ties with oil

Iranian President Hassan Rouhani steering country out of recession despite bear market for crude oil. File Photo by Monika Graff/UPI TEHRAN, Jan. 5 (UPI) — An Iranian government spokesman said he expected the share of oil revenue designated in next year’s budget to be down by about 30 percent. The low price of crude oil is pushing economies like Russia’s, which relies heavily on export revenue, toward the brink of recession. Iran historically has been a hawk in the global oil sector, advocating for a price per barrel of around $100. Government spokesman Mohammad Bagher Noubakht said the share of oil revenues in the budget proposed for next year is down by about a third. "Now the government has to try hard to pull two big stones — inflation and recession — out of the bottom of the well," he said Sunday. Iran is restricted to exports of around […]

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Iran ‘Won’t Give In’ After 60% Decline in Oil Exports

Iran ’s oil exports have fallen 60 percent to 1 million barrels a day, the Tehran-based Shargh newspaper reported, citing comments by Oil Minister Bijan Namdar Zanganeh. Iran, constrained by international sanctions on its energy and financial industries, “won’t give in over 1 million barrels a day,” the paper reported Zanganeh as saying yesterday at a conference in Tehran. The minister didn’t elaborate, nor did he specify dates for the 60 percent cut in the nation’s exports, according to Shargh. U.S. and European sanctions on Iran over its nuclear program have curbed foreign investment and hindered development of the Persian Gulf state’s oil and natural gas reserves. Iran produced 2.77 million barrels a day of oil in December, down from an average of 3.58 million in 2011, data compiled by Bloomberg show. Oil exports are its main source of income. Brent crude, a pricing benchmark for more than half […]

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Saudis Report Deadly Border Clash With Infiltrators From Iraq

BEIRUT, Lebanon — Four heavily armed men from Iraq attacked a Saudi Arabia border patrol early Monday, firing automatic weapons and detonating suicide belts in a confrontation that left three guards and all the assailants dead, Saudi officials said. The early morning clash, which the Saudis described as an attempted infiltration near an isolated patch of the Saudi-Iraq frontier, was one of the deadliest episodes of border violence for Saudi Arabia.

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Guest blog: Scrap “The Call on OPEC”

Steven Kopits is the President of Princeton Energy Advisors, and has been a guest blogger on The Barrel numerous times in the past.  Seven years ago, when I first turned my attention full time to oil, one of the strangest concepts I encountered was the “call on OPEC”. The call on OPEC means different things in different contexts, but fundamentally, it is as non-economic and culturally imperialist a term as one could imagine. The call of OPEC works like this. Non-OPEC countries are assumed to produce as much as they can, guided essentially by price signals. Whatever demand is left over can be served by OPEC. OPEC is thus assumed to “balance the market” and the number of barrels necessary to do so is the “call on OPEC.” Now, imagine this concept grafted onto, say, automobile production. Suppose an American policy-maker argued that GM and Ford should produce as many cars as they […]

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Saudi Arabia Raises Price of Main Oil Grade for Asian Buyers

Saudi Arabia raised the cost of its oil sales to Asia in February, prompting speculation the world’s biggest exporter is retreating from using record price discounts to defend market share. Saudi Arabian Oil Co. will sell its Arab Light grade for $1.40 a barrel less than a regional average next month, the company said yesterday in a statement. That’s a narrowing from January, when the discount was $2, the biggest in at least 14 years. It decreased 11 prices globally and increased six. Brent oil fell 5.9 percent yesterday. Oil prices collapsed 32 percent since the Organization of Petroleum Exporting Countries decided to maintain its output target on Nov. 27, amid signs Saudi Arabia and other members are determined to let North American shale drillers and other producers share the burden of reducing an oversupply. When Aramco lowered prices for November it prompted speculation the nation was seeking to […]

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Michael Lynch: King Abdallah’s Illness, Political Change And The Oil Market

Michael Lynch: King Abdallah’s Illness, Political Change And The Oil Market thumbnail With King Abdallah of Saudi Arabia in serious condition, oil market participants are undoubtedly nervous that this could portend change and even upheaval in Saudi Arabia. Concern that his death could lead to a coup attempt or unrest in the Shi’ite population will no doubt be voiced, but is also likely to prove overblown. The overthrow of the Shah of Iran in 1979 came as a great surprise to most pundits. Indeed, as street demonstrations were growing more violent, a group of European bankers visited to lend more money to the Iranian government, dismissing the protests as nothing the Shah couldn’t handle. Among the more shocking revelations, it came to be known that the CIA station didn’t even have a farsi-speaking agent. The US government was so close to the Shah that it avoided doing anything that […]

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No Income Tax for North Dakota?

North Dakota’s Governor, Jack Dalrymple In a few short days, the North Dakota legislature heads back into session. Expected to take center stage are several key funding issues recently made more crucial by the continued decline in oil prices First is an initiative by GOP members that would effectively wipe out the state income tax. A new bill that is expected to be introduced early in the session will reduce the income tax rate to zero. This is a counter to Gov Dalrymple’s proposal for a 10% decrease in personal and corporate income tax that was made in an effort to draw more people to the region. This issue is highly contested since there is great concern over the potential lost revenue due to plummeting oil prices. North Dakota’s state funding is tightly tied to taxes on oil and gas production and was responsible for more than half the state’s […]

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Revamped U.S. oil hedges may test OPEC’s patience

NEW YORK (Reuters) – As a war of nerves between U.S. shale producers and Gulf powerhouses intensifies, OPEC’s biggest members are counting down the months until their upstart rivals lose the one thing shielding them from crashing oil prices – hedges. They may need much more patience than they reckon, however, because those hedges are a moving target. Rather than wait for their price insurance to run out, many companies are racing to revamp their policies, cashing in well-placed hedges to increase the number of future barrels hedged, according to industry consultants, bankers and analysts familiar with the deals. OPEC officials hope that once U.S. oil companies get fully exposed to the impact of an over 50 percent slide in crude prices since last June, they will have to drill fewer new wells, causing U.S. production growth to stall and putting a floor under oil prices now testing $50 […]

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Statoil’s new North Sea operations will run by remote control

Norwegian energy company Statoil starts work at North Sea platform that will eventually be run by remote. Photo courtesy of Statoil STAVANGER, Norway, Jan. 5 (UPI) — Norwegian energy company Statoil said it started operations at a North Sea platform that will eventually be run by remote control from the shore. The company brought the Valemon natural gas and condensate field into production Saturday. It’s the second platform to be put into production by the company in the last nine months. "Valemon is one of several new projects on the Norwegian continental shelf that will help add value, activity and innovation, demonstrating well the long-term perspective that characterizes Statoil’s activity on the Norwegian continental shelf," Arne Sigve Nylund, executive vice president for development and production in Norway, said in a statement. The North Sea platform has accommodations for as many as 40 workers. Long-term, the facility will be unmanned […]

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House Plans to Vote on Keystone XL Bill Friday

ByAmy Harder A sixty-foot section of pipe is lowered into a trench during construction of the Gulf Coast Project pipeline in Prague, Okla. The Gulf Coast Project is part of the Keystone XL Pipeline Project and will run from Cushing, Oklahoma to Nederland, Texas.  Bloomberg News The House is planning to vote Friday on legislation approving the Keystone XL pipeline, House Majority Leader Kevin McCarthy (R., Calif.), said in an interview Monday. With Republicans holding even more seats in the lower chamber after November’s elections, the measure is sure to pass. The vote will be the tenth time since 2011 that the GOP-controlled chamber has passed measures approving the controversial oil-sands pipeline, which has been under review by the Obama administration for more than six years. The most recent vote came in November, when the House  passed it 252-161 . The Senate, now also controlled by Republicans, is expected […]

Posted On : Published By : Tom Whipple