Iran’s interim deal with global powers on its nuclear program may do little to remove the risk premium on Middle East oil and may even send prices higher, according to an analyst.
“Price reaction may be subdued in the short-term,” said Michael Cohen, analyst at Barclays Bank Plc. in a telephone interview from New York. “There are so many geopolitical tensions that, if anything, could actually be worse off [due to] this deal.”
Oil prices have been on a strong run this month, as the situation in Iraq has deteriorated, but over the last few days, prices have taken a bit of a breather. From a market perspective, we haven't seen the real nightmare scenario yet.
A global deal to lift sanctions against Iran could unleash a flood of oil on to world markets by next year just as crude output recovers in Libya and Iraq, triggering a slide in prices and a major shake-up of the energy landscape.
The prospect of cheaper oil is a welcome relief for the West, but poses a major threat to Russia and a string of countries that depend on oil revenues to finance their budgets.
SINGAPORE/SEOUL — Many Asian refiners say they are shying away from buying the flagship grade of Iraqi crude in spot markets, worried that the militant insurgency in the country could spread to the area where the oil is churned out and exported.
Although the mounting conflict that has swept parts of Iraq is still hundreds of kilometers away from the southern region which produces and ships Basra Light crude, Asian buyers say they are concerned about possible supply disruptions.
What is Saudi Arabia’s bottom line for propping up oil prices unilaterally before it leans on the rest of OPEC to help share the burden?
At $112 a barrel for Brent crude, well above OPEC’s preferred $100, it may not look like a hot issue just yet.
As Ali al-Naimi, oil minister for Saudi Arabia, OPEC’s biggest producer said this week, the oil market is in “the best situation it can be” and at “the right price.”
Middle East oil exporters are locked in an increasingly fierce battle for the world’s fastest-growing markets in Asia, as producers worldwide ship more crude east to compensate for shrinking demand from the United States and Europe.
The fight for the trillion-dollar Asian oil market has ended decades of comfortable dominance for Middle East producers, who faced so little competition that refiners in Asia complained of being charged a premium of a dollar or so per barrel above what buyers in Europe or the Americas paid.
Events in Iraq are changing by the hour, now that US combat boots are "on the ground", expect them to change even faster. For those looking to catch up on the most recent overnight news out of this latest civil war torn country, here is the full update.
Iraq is sharpening a push to sell its swelling crude output and sit at oil’s top table with Saudi Arabia, sweetening terms for contract buyers next year, its customers say.
Iraqi Oil Minister Abdul-Kareem Luaibi held court to oil executives in Vienna’s Hotel Imperial last week on the sidelines of an OPEC meeting. Some buyers have said they were concerned by higher prices and variable quality.
VIENNA — OPEC oil exporters on Thursday were in no mood to fight over how much crude to produce and instead weighed the impact of rising supplies of U.S. shale and a looming turf war in Asia.
The Organization of the Petroleum Exporting Countries has little room to pump more oil due to the U.S. oil boom that has sparked competition for marketshare in Asia and set off a rivalry between its top two producers Saudi Arabia and Iraq.