BP’s Stunning Warning: “Every Oil Storage Tank Will Be Full In A Few Months”

It was just last week when we said that Cushing may be about to overflow in the face of an acute crude oil supply glut.

“Even the highly adaptive US storage system appears to be reaching its limits,” we wrote, before plotting Cushing capacity versus inventory levels. We also took a look at the EIA’s latest take on the subject and showed you the following chart which depicts how much higher inventory levels are today versus their five-year averages.

South Stream ‘Plan B’ opts for route through Greece and Turkey

A Russian newspaper has published an article suggesting that the Kremlin-favoured South Stream gas pipeline could drop Bulgaria, Serbia, Hungary, and Slovenia for its route, and instead reach its final destinations, Italy and Austria, through Turkey and Greece.

On Monday (18 August), Russian business newspaper Vzglyad published an article by journalist Oleg Makarenko, claiming that Gazprom has a “plan B” in case Bulgaria continues to obstruct the construction of the South Stream pipeline.

A caretaker government in Sofia, which took office on 6 August, has frozen the construction of South Stream, following clear indications from Brussels that the EU executive would impose infringements on Bulgaria, unless the country re-negotiates its bilateral agreement with Russia for the construction of the pipeline, which is in breach of EU law.

U.S. Sanctions Push Putin Toward His Dream of A New Financial System

Although Monday’s sanctions will hurt Russia in the short term, they will also force Putin to step up his efforts to weaken U.S. influence over the global economy, which so far has been “little more than wishful thinking because of the difficult reforms it would require”

A little over a year ago, in early March 2013, the Russian state energy czar Igor Sechin made his American debut at an oil summit in Houston, Texas, reportedly accompanied by armed guards equipped with a K-9 unit. The speech he gave that day at the СERAWeek conference, an annual gathering of energy titans from around the world, was part of a pit stop for Sechin. He was on his way to a more high profile event, the funeral of his old friend Hugo Chavez, the truculently anti-American President of oil-rich Venezuela. But since he was passing through the Western hemisphere anyway, Sechin clearly felt it was worthwhile to court some American investors. “I call for us to work together,” he told the audience that day, according to Russia’s Vedomosti daily, “to drive our business for mutual benefit.”

Commodities: Iran challenges US sanctions with plans to double oil output by 2018

As already mentioned here a few times, third world countries have no bottom, thus making any sanctions against Iran’s oil industry worthless. The world has a high demand for oil and all sanctions will do is force the oil route to change direction towards another country.

Iran has unveiled plans to double its oil production by the end of the decade and, ignoring sanctions, pump billions of dollars of its currency reserves into developing its share of the world’s largest natural gas reservoir in the Persian Gulf.

The country’s new oil minister, Bijan Zanganeh, has set a new output target of 5.7m barrels per day (bpd) of crude by 2018, according to the official state-run news agency Shana. The latest figures produced by the Organisation of Petroleum Exporting Countries (Opec), show that Iran is currently pumping about 3m bpd of crude.

Tehran is also sending strong signals to the international community that it plans to press ahead with the development of vast natural gas reserves that it shares with Qatar in the Persian Gulf. Moshtaq Ali-Gohari, head of the National Iranian Oil Company, told Shana over the weekend that the Islamic republic plans to invest almost $14bn (£8.3bn) to develop oil and gas fields that it shares with neighbours in the region. This could signal that Tehran is preparing for the further development of the South Pars field in the Gulf.

Russian Oil Behemoth Rosneft Has Unlocked the Arctic

Last year, Russian state-controlled oil conglomerate Rosneft became the largest oil company in the world after acquiring one of its major competitors. The company has had its sights on tapping Russia’s vast, treacherous Arctic reserves, and after making a few huge deals, it looks like it now has the resources needed to do so.

Russia’s Arctic is estimated to have 25 to 30 billion tons of recoverable oil reserves, which is stunning when you consider there are around 359 billion proven reserves worldwide, including shale oil and oil sands. The only problem is that the Arctic reserves are incredibly hard to exploit, as we saw with Shell’s platform disaster earlier this year. Fields in the Kara and Barents Seas are stuck in incredibly cold and rough seas, and the huge reserves in Siberia’s Laptev, East Siberian, and Chuckchi Seas are additionally separated from population centers by thousands of miles of tundra.

Those vast oil and gas fields aren’t impossible to tap, just expensive. With oil platforms in the farthest reaches estimated to cost somewhere between $5 billion and $8 billion apiece, it should come as no surprise that the Arctic has remained quiet this long. (It’s also a reason why Soviet scientists wanted to melt the whole thing.)

Russia’s Stranglehold on European Energy

Meet Rosneft—Russia’s third-largest oil conglomerate that is about to buy out tnk-bp. This strategic move will not only propel Rosneft to the top of Russia’s oil industry, but it will also make both of the nation’s largest oil and gas companies state owned.

tnk-bp is currently co-owned by British oil firm BP and a Russian group of billionaire investors called aar. According to Marin Katusa of Casey Research, Russian President Vladimir Putin’s oil company Rosneft is about to purchase BP’s 50 percent stake in tnk-bp. The move will cost Rosneft approximately $27 billion in cash and stock. At the same time, Rosneft is trying to purchase the other 50 percent stake from aar, although this deal is yet to be finalized. In the end, according to Reuters, the deal as a whole will be worth $55 billion.

If the deal succeeds, it will be the largest purchase since Exxon bought out Mobil over a decade ago.