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Saudi Arabia Oil Sales to U.S. Imperiled by Shale Boom

After years of keeping the price of crude sold to the U.S. low enough to maintain market share, Saudi Arabia is losing ground as the shale boom leaves U.S. refiners with ample supplies of inexpensive domestic oil. Arab Light crude for sale in the U.S. averaged 48 cents a barrel less than Light Louisiana Sweet, a Gulf Coast benchmark, in August, the narrowest discount in data compiled by Bloomberg back to 1991. The U.S. imported 878,000 barrels of Saudi crude a day in the first four weeks of August, the least since 2009. Shale drilling has boosted U.S. oil output to the highest level since 1986. As refineries turn to lower-priced domestic oil to make fuel at a record pace , the Saudis and other foreign suppliers are left with dwindling slices of the market. In June, imports from Saudi Arabia accounted for the smallest share of crude processed […]

Posted On : Published By : Tom Whipple
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Aging oil fields can turn the Arabian Peninsula into a powder keg

300×300 Monetising Summit If one studies the world’s oil resources and oil production then the Arabian Peninsula is of central interest. The remaining monarchies of the region have established the Gulf Cooperation Council (GCC). This was formed in 1981 as a response to the Iranian Revolution and Iraq’s attack on Iran. The GCC is comprised of Saudi Arabia, Kuwait, Bahrain, Qatar, The United Arab Emirates and Oman. Within the GCC exist enormous oil resources. According to the BP Statistical Review of World Energy 40% of the world’s remaining conventional oil reservs exists within the GCC. The world’s largest conventional oil field is Ghawar in Saudi Arabia and there are also many other gigantic oilfields in the region. Since the 1950s it is mainly oil from the Arabian Peninsula that has been decisive for the economic growth of the global economy. The problem at the moment is that the fields […]

Posted On : Published By : Tom Whipple
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Sources: Saudi Aramco Seeks Interest For Work On Unconventional Gas

KHOBAR, Saudi Arabia, Aug 29 (Reuters) – Four companies have expressed interest in bidding for work on unconventional gas in Saudi Arabia as the world’s top oil exporter pushes ahead with plans to develop challenging shale deposits, industry sources said. The companies are South Korea’s GS Engineering and Construction, Italy’s Maire Tecnimont, Japan’s JGC and Canada’s SNC-Lavalin, the sources told Reuters. State-run Saudi Aramco’s project will involve building processing facilities, wellheads and pipelines for the gas in Turaif in the northern part of Saudi Arabia where the big mining project Waad al-Shamal is under development, the sources said. Saudi Aramco, SNC-Lavalin, JGC and GS declined to comment, while Maire Tecnimont was not available for comment. The search for gas has been a priority for Saudi Arabia as it struggles to keep pace with rapidly rising domestic demand. Aramco plans to produce as much as 200 million cubic feet per […]

Posted On : Published By : Tom Whipple
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Saudi Aramco Plans To Invest $40B A Year For The Next Decade

Saudi Aramco Plans To Invest $40B A Year For The Next Decade STAVANGER, Norway, Aug 25 (Reuters) – Saudi Aramco, the world’s biggest oil producer, plans to invest $40 billion a year over the next decade to keep oil production capacity steady and double gas production, Chief Executive Khalid Al-Falih said on Monday. State-owned Aramco sees more capital going into offshore projects and expects rising costs across the oil sector to underpin oil prices, Al-Falih told a conference. Oil prices fell to a 14-month low of $101.07 last week as global demand growth weakens, even as production ramp ups in several places create a glut of oil. "To meet forecast demand growth and offset (global output)decline, our industry will need to add close to 40 million barrels per day of new capacity in the next two decades," Al-Falih said. "Although our investments will span the value chain, the bulk […]

Posted On : Published By : Tom Whipple
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Saudi Crude Exports Fell to Lowest Since 2011

Saudi Arabia, the world’s biggest oil exporter, shipped the least crude in almost three years in May as domestic refineries processed record amounts and power plants also increased consumption, official data showed. The nation exported 6.99 million barrels a day in May, down from 7.45 million barrels a month earlier, according to data Saudi Arabia submits to the Joint Organisations Data Initiative in Riyadh. The shipments were the smallest since September 2011. Crude production rose to 9.71 million barrels a day from 9.66 million in April. Saudi Arabian refiners processed 2.14 million barrels a day of crude in May, the highest since at least January 2002, the year when JODI started collecting data from member governments. Crude processing in May went up from 1.85 million barrels a day in April, the data showed. “The record refining volume shows that Saudi Arabia is fulfilling its plans to become a major […]

Posted On : Published By : Tom Whipple
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Saudi Arabia's Ability to Plug Oil Gap May Be Limited

Saudi Arabia may be willing to use less than half of its declared oil-producing spare capacity to make up for any possible supply shortfalls in Iraq, according to several Gulf officials, meaning its ability to act as a supplier of last resort could be restricted. The Gulf producer, the only country with a significant base of idle capacity, has often said it could ramp up its production to 12.5 million barrels a day in the event of unexpected disruption to oil supplies elsewhere. But Gulf oil officials say that pumping anywhere near that level and sustaining it is only possible on paper. "Saudi Arabia is now producing around 9.7 million barrels a day. Our best case scenario is seeing its output rising by another 1 million barrels a day or 1.3 million if the oil market is in a disastrous state," one Gulf official at the Organization of the […]

Posted On : Published By : Tom Whipple
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Saudi Arabia’s Ability to Plug Oil Gap May Be Limited

Saudi Arabia may be willing to use less than half of its declared oil-producing spare capacity to make up for any possible supply shortfalls in Iraq, according to several Gulf officials, meaning its ability to act as a supplier of last resort could be restricted. The Gulf producer, the only country with a significant base of idle capacity, has often said it could ramp up its production to 12.5 million barrels a day in the event of unexpected disruption to oil supplies elsewhere. But Gulf oil officials say that pumping anywhere near that level and sustaining it is only possible on paper. "Saudi Arabia is now producing around 9.7 million barrels a day. Our best case scenario is seeing its output rising by another 1 million barrels a day or 1.3 million if the oil market is in a disastrous state," one Gulf official at the Organization of the […]

Posted On : Published By : Tom Whipple
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Insurgency in Iraq Widens Rivals’ Rift

Tensions between Iran and Saudi Arabia, Islamic rivals of the Middle East, appeared to escalate on Wednesday over the Sunni extremist insurgency convulsing Iraq, as President Hassan Rouhani of Iran declared readiness to defend Iraq’s Shiite holy sites with force and Saudi leaders issued a barely veiled admonishment not to intervene. The sharpened tone coming from both countries, which have long regarded each other with suspicion — Iran is overwhelmingly Shiite and Saudi Arabia Sunni — suggested that their recent tentative efforts to improve relations might be faltering over the Iraq crisis. Both countries have long vied for influence in the region and support opposing sides in Syria’s civil war. The Saudis are also increasingly concerned about Iran’s efforts to ease its longstanding estrangement with the United States, a close strategic and economic partner of Saudi Arabia. While the United States and Iran differ on many issues, most notably […]

Posted On : Published By : Tom Whipple
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ISIL's advance puts Saudi Arabia between Iraq and a hard place

The battle between Iraq’s government and the Islamic State of Iraq and the Levant (ISIL) which threatens to  plunge Iraq back into the chaos of sectarian civil war  puts Saudi Arabia in an increasingly awkward position. The Saudis have long been at loggerheads with the Iran-backed Shia-dominated government   of Prime Minister Nouri al-Maliki, seeing Iraq as a key theater of its battle for influence with Tehran that also plays out in Syria, Lebanon and elsewhere in the region. But while ISIL poses the deadliest challenge yet to Maliki, its rapid emergence as a key regional player threatens Saudi interests as well as those of Iran. Still, the military effort to reverse ISIL’s rapid gains over the past week with possible U.S. and Iranian assistance is likely, at least in the short term, to strengthen the hand of Riyadh’s adversaries in Iraq. The Saudis took several days to respond to […]

Posted On : Published By : Tom Whipple
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ISIL’s advance puts Saudi Arabia between Iraq and a hard place

The battle between Iraq’s government and the Islamic State of Iraq and the Levant (ISIL) which threatens to  plunge Iraq back into the chaos of sectarian civil war  puts Saudi Arabia in an increasingly awkward position. The Saudis have long been at loggerheads with the Iran-backed Shia-dominated government   of Prime Minister Nouri al-Maliki, seeing Iraq as a key theater of its battle for influence with Tehran that also plays out in Syria, Lebanon and elsewhere in the region. But while ISIL poses the deadliest challenge yet to Maliki, its rapid emergence as a key regional player threatens Saudi interests as well as those of Iran. Still, the military effort to reverse ISIL’s rapid gains over the past week with possible U.S. and Iranian assistance is likely, at least in the short term, to strengthen the hand of Riyadh’s adversaries in Iraq. The Saudis took several days to respond to […]

Posted On : Published By : Tom Whipple