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Iraq's oil production will rise about 0.6 million barrels per day in 2012
On: Sun 12/18/2011 19:40
Diplomatic agreement in OPEC in order to avoid problems in the Middle East
* Walid Khadduri
Reach the Ministerial Council of the Organization of «OPEC» a compromise, a diplomatic nature to avoid the raging political differences between countries in the region, especially Saudi Arabia and Iran, as happened in the ministerial meeting last June. But it is clear that the diplomatic side dominated the content of the agreement, rather than on details of the oil markets usually want to hear, as is the custom in the WTO agreements. Perhaps the mysterious diplomatic solution was the best possible in the current status of the agreement of all parties after the sharp differences in the past ministerial meeting, where the Ministerial Council was unable to reach any decision, only a recognition of some public officials fail to reach a compromise solution.
Ambiguity lies in the adoption of the current agreement for the production ceiling of OECD countries by about 30 million barrels per day, without setting production quotas for each state, as is customary. In addition, the ceiling of 30 million barrels per day production include Libya «current and future», which currently produces about one million barrels per day, and plans to produce 1.6 million barrels per day in June. The agreement also included Iraqi production is planned to rise about 0.6 million barrels per day in 2012, of course. Since the agreement is on the roof of the organization of production, this means that total production of the Member States must not exceed this level, despite the potential of both Libya and Iraq to increase production or not, or the continuation of Iranian production on the European level, although the province has.
However, the most important thing is that the level of 30 million barrel a day, is already a production unrealistic to OECD countries in the current period, ie, that the demand for oils «OPEC» is at this level already, and not nearly 24.8 million barrels per day as agreed in Oran after the collapse of the bank «Lehman Brothers »in 2008. Saudi Arabia has confirmed once again its commitment to security of supply according to the needs of the market, which meet global demand.
But the organization did not reflect honestly what will do in the event of falling demand, ie it will cut production, and Sakhvdah, how much and what is the rate of each country. Since the projections indicate recession in European countries during 2012, with the economic crisis in the United States, the markets feared from this deliberate ambiguity in the policy of the organization, and oil prices fell as a first reaction to that.
The agreement in Vienna, very clearly, the fact is clear is the weight and the strength of Saudi Arabia in the Organization of «OPEC», and the global oil, of each of the level of production higher, but more importantly, in the spare capacity available to these countries, especially Saudi Arabia. And tried to both Iran and Venezuela to avoid these facts in the ministerial meeting the previous failure of the meeting. And was able to continue in Riyadh's policy after the meeting of June, but recognizes, as well as other Member States, the importance of reaching a consensus in the «OPEC» in the long term.
Contrary to what it used to do when the differences between the countries of the Organization, production remained the Gulf States to meet global demand and sinking markets. The best proof of the continued level of prices above $ 100 a barrel, Iran's exports and about 2.5 million barrels a day, and the annual rent to Iran about $ 100 billion. This means, that the dispute was not to break the price, but in the interest of major oil-producing countries in the balance of supply and demand constantly varying according to demand, so that is not affected by chronic political differences between the exporting and consuming countries.
There is no doubt that the decision was preceded by a lot of the Vienna consultations between Riyadh and Tehran, as it is clear that the Secretary-General of the Organization of Abdullah al-Badri has played an important role in reaching this compromise. The best reflects the success of these negotiations is the Vienna Agreement, but also the statement by the Iranian Oil Minister Rustam Ghasemi, who confirmed to reporters far the agreement, that the decision «reflects the close and friendly relations with Saudi Arabia».
The use of «OPEC» usually solutions «General» and «vague» When I fail to reach unanimous agreements detailed the Member States. The market is aware of these things, they followed up carefully, and then try to reduce the price it does not trust this kind of decisions that do not oblige Member States of specific quotas. Indeed, prices have fallen far end of the meeting. However, we believe that this decision, despite Amomyate, also accompanied by a political understanding - between the oil major producing States, and that the result of talks between the countries concerned, the main lines. We must not forget that the Middle East was pregnant a set of political developments that may affect the supply of oil: «Arab spring», provincial European Iranian oil (as well as the Syrian), United Nations reports on the Iranian nuclear program, and the withdrawal of U.S. troops from Iraq. It is expected that these developments individually or collectively to supply disruptions, increasing speculation, and then prices are likely to continue at high levels.
* Iraqi writer specialized in energy
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On: Sun 12/18/2011 19:40
Diplomatic agreement in OPEC in order to avoid problems in the Middle East
* Walid Khadduri
Reach the Ministerial Council of the Organization of «OPEC» a compromise, a diplomatic nature to avoid the raging political differences between countries in the region, especially Saudi Arabia and Iran, as happened in the ministerial meeting last June. But it is clear that the diplomatic side dominated the content of the agreement, rather than on details of the oil markets usually want to hear, as is the custom in the WTO agreements. Perhaps the mysterious diplomatic solution was the best possible in the current status of the agreement of all parties after the sharp differences in the past ministerial meeting, where the Ministerial Council was unable to reach any decision, only a recognition of some public officials fail to reach a compromise solution.
Ambiguity lies in the adoption of the current agreement for the production ceiling of OECD countries by about 30 million barrels per day, without setting production quotas for each state, as is customary. In addition, the ceiling of 30 million barrels per day production include Libya «current and future», which currently produces about one million barrels per day, and plans to produce 1.6 million barrels per day in June. The agreement also included Iraqi production is planned to rise about 0.6 million barrels per day in 2012, of course. Since the agreement is on the roof of the organization of production, this means that total production of the Member States must not exceed this level, despite the potential of both Libya and Iraq to increase production or not, or the continuation of Iranian production on the European level, although the province has.
However, the most important thing is that the level of 30 million barrel a day, is already a production unrealistic to OECD countries in the current period, ie, that the demand for oils «OPEC» is at this level already, and not nearly 24.8 million barrels per day as agreed in Oran after the collapse of the bank «Lehman Brothers »in 2008. Saudi Arabia has confirmed once again its commitment to security of supply according to the needs of the market, which meet global demand.
But the organization did not reflect honestly what will do in the event of falling demand, ie it will cut production, and Sakhvdah, how much and what is the rate of each country. Since the projections indicate recession in European countries during 2012, with the economic crisis in the United States, the markets feared from this deliberate ambiguity in the policy of the organization, and oil prices fell as a first reaction to that.
The agreement in Vienna, very clearly, the fact is clear is the weight and the strength of Saudi Arabia in the Organization of «OPEC», and the global oil, of each of the level of production higher, but more importantly, in the spare capacity available to these countries, especially Saudi Arabia. And tried to both Iran and Venezuela to avoid these facts in the ministerial meeting the previous failure of the meeting. And was able to continue in Riyadh's policy after the meeting of June, but recognizes, as well as other Member States, the importance of reaching a consensus in the «OPEC» in the long term.
Contrary to what it used to do when the differences between the countries of the Organization, production remained the Gulf States to meet global demand and sinking markets. The best proof of the continued level of prices above $ 100 a barrel, Iran's exports and about 2.5 million barrels a day, and the annual rent to Iran about $ 100 billion. This means, that the dispute was not to break the price, but in the interest of major oil-producing countries in the balance of supply and demand constantly varying according to demand, so that is not affected by chronic political differences between the exporting and consuming countries.
There is no doubt that the decision was preceded by a lot of the Vienna consultations between Riyadh and Tehran, as it is clear that the Secretary-General of the Organization of Abdullah al-Badri has played an important role in reaching this compromise. The best reflects the success of these negotiations is the Vienna Agreement, but also the statement by the Iranian Oil Minister Rustam Ghasemi, who confirmed to reporters far the agreement, that the decision «reflects the close and friendly relations with Saudi Arabia».
The use of «OPEC» usually solutions «General» and «vague» When I fail to reach unanimous agreements detailed the Member States. The market is aware of these things, they followed up carefully, and then try to reduce the price it does not trust this kind of decisions that do not oblige Member States of specific quotas. Indeed, prices have fallen far end of the meeting. However, we believe that this decision, despite Amomyate, also accompanied by a political understanding - between the oil major producing States, and that the result of talks between the countries concerned, the main lines. We must not forget that the Middle East was pregnant a set of political developments that may affect the supply of oil: «Arab spring», provincial European Iranian oil (as well as the Syrian), United Nations reports on the Iranian nuclear program, and the withdrawal of U.S. troops from Iraq. It is expected that these developments individually or collectively to supply disruptions, increasing speculation, and then prices are likely to continue at high levels.
* Iraqi writer specialized in energy
[You must be registered and logged in to see this link.]
