U.S. ‘’Oil Weapon’’ Could Change Geopolitics Forever

 

In a dynamic that shows just how far U.S. oil production has come in recent years, the U.S. Energy Information Administration (EIA) said on Monday that in the last two months of 2018, the U.S. Gulf Coast exported more crude oil than it imported.

What Would The End Of OPEC Mean?

 

The Organization of the Petroleum Exporting Countries – the oil market institution that has exerted an unyielding power over the price of crude for nearly 60 years – is now in deep crisis. The latest OPEC meeting in Vienna offered new insights into the cartel’s raging civil war that is tearing it apart and threatens to ultimately make the cartel irrelevant.

In a two-year period since the group of 15 major oil producers formed an alliance with Russia, OPEC’s smaller members have been marginalized, their voices have been diminished and Saudi Arabia seems to prioritize its partnership with Moscow above all else. An unlikely partnership between Saudi Arabia and Russia is causing dissension within OPEC, with one of the oldest members announcing it would withdraw from the organization in January just days prior to the talks. With Russia tightening its grip over OPEC’s decisions and the United States officially reaching net oil exporting status in late November for the first time in decades, even if only briefly, the new world oil order is now dependent on three energy superpowers: Saudi Arabia, Russia and the United States.

Saudi Arabia Calls The End Of Russia’s Oil Prowess

 

Saudi Arabia has not only called the end of Russia’s prominence as a global oil behemoth, but anticipates that Russia’s oil exports “will have declined heavily if not disappeared” within the next 19 years, Mohammed bin Salman said in a recent interview with Bloomberg.

U.S. Crude Oil Exports Could Jump To Almost 4 Million Bpd By 2020

 

U.S. crude oil exports could increase to 3.9 million bpd by 2020, mostly driven by rising production in the Permian, the Houston Chronicle reported on Tuesday, citing a new report by S&P Global Platts.

U.S. crude oil exports are expected to reach 2.2 million bpd next year, according to the estimates.

GREAT AGAIN: USA Is Now The Largest Global Crude Oil Producer – Surpasses Russia and Saudi Arabia

In February, U.S. crude oil production exceeded that of Saudi Arabia for the first time in more than two decades. In June and August, the United States surpassed Russia in crude oil production for the first time since February 1999.

Trump To OPEC ‘Allies’: “Reduce Oil Prices Now” Or Lose US Defense Shield

 

Update: For the umpteenth time this year, President Trump has lashed out at OPEC over soaring oil prices (and therefore gas prices): “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher.”

Then Trump escalated his rhetoric, appearing to threaten the withdrawal of support unless action is taken “…the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW! “

This is coming after reports that Trump asked the Saudis to increase production by 2mm barrels and that they agreed.

President Trump has not been shy of expressing his views to OPEC…

The Strategic Petroleum Reserve Is Slowly Dying

 

Forty years ago, in the wake of the Arab oil embargo that made the United States acutely aware of just how dependent its economy was on imported crude, the government set up the Strategic Petroleum Reserve in a bid to make sure there were no repeats of the painful shortages the embargo caused.

Now, there are about 700 million barrels in the SPR. The U.S. is producing 9.42 million barrels daily, as of the week ending August 4th, a figure that is set to continue rising as shale producers keep on pumping more. Imports as of last week averaged 7.8 million barrels daily, with the four-week average at 8 million bpd. This means that the SPR holds crude oil equal to 40 days of local production plus imports.

After Poland, Lithuania Becomes U.S. LNG Buyer

 

Seeking to diversify its gas imports away from Russia’s giant Gazprom, Lithuania’s state-held gas trader Lietuvos Duju Tiekimas said on Monday that it had signed a deal with Cheniere Marketing International to buy LNG directly from the U.S., adding to the growing list of customers of America’s LNG cargoes.

The Lithuanian company expects to receive the first LNG cargo delivery in the second half of August.

The Next Big U.S. Shale Play

 

Media coverage of the U.S. shale oil and gas industry makes it sound like the Permian is the only place where things are happening. Everybody is buying acreage in the Permian, selling acreage in other shale plays, and production costs are falling the fastest in that same Permian.

True as this may be, this shale play is by no means the only one where production is growing. In fact, oil and gas output across the shale patch has been growing, as the Energy Information Administration’s latest drilling productivity report shows. And that’s not all because there is a new actor on stage: Powder River Basin in Wyoming.

Saudis May Enter The Shale Game

 

Flooding the market has quickly emptied the kingdom’s checkbook

In case you missed the past three years, on Thanksgiving Day 2014, OPEC announced it would not cut oil production in the name of gaining customers and growing market share for its members (widely interpreted as Saudi Arabia).

That announcement set off a two + year global commodities price downturn that sent oil from triple digits all the way down to $26 and fostered two years of pain and indigestion in the shale beds of North America that companies are just now getting past.

In Flames (III)

Lest we forget the Obama administration’s foreign policy that has allowed Iran to strengthen and impose its hegemony in the Middle East — in this case, Yemen. Iran is backing Houthi rebels who are attempting to overthrow the country, which is of enormous strategic importance. According to the US Energy Information Administration’s (EIA) fact-sheet on global oil chokepoints, over 3.8 million barrels of oil and refined petroleum products pass through the Bab el-Manded strait. It’s shipped to Europe, Asia and even the U.S.. This strategic chokepoint is the world’s fourth-busiest. Whoever owns the straight controls access to numerous oil pipelines and terminals which are state owned by Egypt, the Saudis, UAE and Qatar.

Knowing this, you now know the reason behind Saudi Arabia’s involvement. It is not Saudi Arabia and Co. who are the “aggressors” which this article states. Rather, they are simply reacting to Iran’s actions and America’s inaction. Germany plays a key role as a weapons supplier in the sense that America is refusing to back its Saudi allies and is simply filling the vacuum. Saudi Arabia is fed up with America, which has become an unreliable partner for it, and is now taking the initiative. This is why you also see Saudi Arabia considering going nuclear and it has been once reported that they might’ve bought nuclear weapons from Pakistan already. It also gives Germany an opportunity to gain and strengthen footholds within the region as well.

In summary, a weak and corrupt administration in the White House has paved the way for all hell to break loose in the Middle East. Only time will tell when it comes to seeing who (aside from Israel) will remain the dominant Middle East power: Saudi Arabia or Iran.

 

SANA’A/RIYADH/DOHA/ABU DHABI/BERLIN (Own report) – Germany’s close Arabian allies are using German weapons to launch their deadly offensive on Yemen’s capital. Saudi Arabia has been carrying out its aggression on that country for about half a year, seeking to drive the Huthi rebels, considered allies of Iran, out of Sana’a. The Saudi military is using German weapons to wage its war, and its allies – the United Arab Emirates and Qatar – have also been equipped by German arms manufacturers. The air forces of these three Gulf dictatorships have been training aerial combat with the Bundeswehr and acquired skills that they could now put to use in their offensive on Sana’a. This is significant because observers have noted their extreme ruthlessness in combat methods. More than 5,000 people, half of them civilians, have been killed; a vast number of others have fled. However, the majority of those fleeing cannot leave their country – also because German technology blocks their routes at the Yemeni borders. Relief supplies into the country are insufficient due to a Saudi blockade. More than a quarter of the population is currently suffering acute starvation. Germany, however, is continuing its arms deliveries to Saudi Arabia’s war coalition.

OPEC Is Winning The Price War Says IEA

Oil markets may not balance until late 2016, but supply is finally contracting in a big way.

Early last week the EIA confirmed that U.S. oil production was down sharply since peaking in April at 9.6 million barrels per day (mb/d). The agency estimates that U.S. output fell by 140,000 barrels per day in August, a steeper decline than in previous months. In its latest weekly estimate (which is less accurate than monthly retrospective estimates), U.S. oil production is now down to just 9.1 mb/d.

Why China will intervene in Iraq

China has consistently maintained its core principle of non-interference in the domestic affairs of other countries for over six decades, and it continues this policy toward Iraq during its ongoing battle against the Islamic State In Iraq and Syria (ISIS).  Although Beijing maintains this strong position of non-intervention, over the past several decades its sharp economic rise and growing middle class, together with its need to secure natural resources, represent markers for potential deviation from this longstanding approach.

Iran Likely to Produce 600,000 Barrels of Oil Per Day Upon Sanctions Relief

WASHINGTON (Sputnik) — Iran will likely produce hundreds of thousands of barrels of oil daily by the end of next year once international sanctions on Tehran are fully lifted, the US Energy Information Administration (EIA) said in a report on Thursday.

“Iran is also expected to increase production as sanctions are lifted,” the agency’s report read. “EIA estimates that Iran has the technical capability to increase crude oil production by about 600,000 b/d by the end of 2016.”

US Shale Declining And OPEC Still Climbing

Essentially, OPEC has killed off the U.S. shale industry, which was predicted last year. See the OPEC category for further articles on Saudi Arabia’s economic warfare scheme against the United States.

 

 

There is new data out today. The EIA published their International Petroleum Statistics yesterday. The EIA also published their Drilling Productivity Report which gave their expected shale oil and gas production through September. Then this morning OPEC published their Monthly Oil Marketing Report with OPEC crude only production numbers through July.

First the Drilling Productivity Report. Of course most of the Drilling Productivity Report is projection, not history. And that projection goes through September 2015.

The EIA has the Bakken peaking in December and declining 107 thousand barrels per day since that point. A secondary peak was reached in April and declining steadily since then.