Tag Archives: oil market

1st “Berlin Energy Forum” 21 May | A monthly disruption of the local ‘energy echo chamber.’

Dear Colleagues & friends, Below is an invite to our first Berlin Energy Forum (jump to details | jump to register), but first a personal note.

First, a personal note: As some of you know, this is an idea I’ve been floating in Berlin since well before Corona. Then, last October, I had an experimental test run, a one-off, sponsored by the Qatari embassy’s Divan – and it went very well.

However, the biggest success from that event was that Ben Aris, co-founder and editor-in-chief of bne IntelliNews enthusiastically joined me to found the Berlin Energy Forum as a regular monthly sort of membership club. Amongst the longest serving foreign correspondents in Eastern Europe, Ben has been covering Russia since 1993, with stints in the Baltics and Central Asia. He is a former Moscow bureau chief for the Daily Telegraph and was a contributing editor at The Banker and Euromoney for a decade amongst writing for many other publications. He is also a professional photographer, and nowadays based in Berlin.

Ben is one of those rare people who relishes doing analysis and data-driven writing (non-stop!), AND who knows how to do business – and thoroughly enjoys doing it. Just the partner for this endeavor.

My model and inspiration for this forum was always the New York Energy Forum, which has run for over 40 years now. I happily attended while teaching in NYC. My experience with that forum, plus familiarity with a few top DC think tanks, and various foreign diplomats (esp. in NYC/UN), is how, as an academic, I got to know a broad spectrum of USA oil and gas executives, journalists, financial-institution analysts and government officials. Those personal connections have, over the years, anchored my assessments of USA, of OPEC MENA-and-Latin American members’, and of Russian and Chinese strategy. This sort of community doesn’t exist in Europe in such a focused manner, save perhaps in London. Perhaps we can now bring a bit of that world to Berlin with our new BEF.

Continue reading

Why USA alarm? [PL/EN] Analityk: Ukraina pokazała, że może zakłócić eksport rosyjskiej ropy przez porty /Analyst: Ukraine has shown it could disrupt Russian ports exporting oil

Money.pl Getty …

In an Easter Sunday interview in 20+ Polish papers [POLISH & ENGLISH below], I said White House reasons for Ukraine not to hit Russian refineries don’t make sense. The “elephant in the room” alarming DC is that Ukraine can now disrupt Primorsk, UST-Luga and Novorossiskya oil ports, needed for 60% of Russian exports.

This would not only deny Moscow vital oil revenues needed to wage war, it would also spark a spectacular global oil market shock. I explain that the USA and allies can urgently prepare for this, while the Ukrainians are still maintaining strategic patience.

Continue reading

My EuroNews-Serbia: Will oil hit $100? Who suffers? Saudis’ market logic. IEA says Q4 tight. Russia oil-price-cap impact.

Today (Mon., 12.09.23; 12:16 CET) EuroNews-Serbia interviewed me (Video has English audio-overlay).
I explained:

  • Saudi logic for cutting, with Russia, about 125 million barrels from the market so far, and by the end of 2023 some 245 million barrels [1] is its prediction of soft demand due to China’s slow recovery and somewhat the EU too; plus the Saudi minister points to central banks continuing to fight inflation with high rates.
  • However, the IEA disagrees, seeing a shortage of supply in Q4. I added that the market is in backwardian, and so agrees with IEA.
  • My assessment:
    • Price over $100 is likely this year; it is after all fairly close now, in the 90’s.
  • I answered a question about who gets hurt the most from high prices.
    • It is the countries who do not produce oil and are relatively poor. So, mainly some states in Asia and So. Asia, Africa and Latin America.
    • As for Europe, rising oil price will be somewhat inflationary; especially hitting Eastern Europe, where inflation is generally still a greater problem.
  • However, I pointed out that compared to historical peaks in 2008-09 and 2010-11, $100 or even $125/bbl or even higher prices are needed to begin approaching the REAL price of oil back in those cases.
    • So, $100 oil is now not so inflationary as it was back then (and in general oil is not as inflationary as it was in the last century, because economies have larger service and knowledge sectors that are not as strongly affected by fuel prices as manufacturing and chemical industries.
  • I also explained that the Russian oil price cap sanctions have actually “put money in the pockets” of people in poorer states, as its enforcement meant that Russia, while still selling its oil, has been forced to sell it cheaper.
    • In particular, up till the start of last month (start of Sept), Russia was losing about half the revenues it would have ordinarily made on its oil exports. (This can be seen on a chart recently released by the USA Treasury Department. [3])
    • However, as a higher percentage of its oil (about 75% now) is sold via tankers that are not owned or insured by the EU or UK , it can be sold at higher prices without falling under the price cap enforcement mechanism. This higher price is, then, also now contributing to the higher price of oil on the global market. [2]
Continue reading

My Al Jazeera: Defaulting, Putin becomes “Hugo Chavez with nukes.” EU sanctions on Russian oil would force discounted sales “out the back door” to China et al … killing the initial global price spike [English audio. Arabic video]

Above: English Audio – translator asking question (low) and my (louder) answers.
Al Jazeera interview, Doha [Arabic] on the ramifications of the Russian Central Bank default due to USA sanctions. (13 Mar 2022, 22:40, from Berlin).

Note: It is indeed possible for the EU – including Germany too – to immediately cut Russian oil imports to zero and not suffer prolonged high oil prices. How? I will explain in a coming post. This is a topic I have been working on intensively the past couple weeks.

I mention some of my (and others’) rationale for saying this in my answer to the second question from Al Jazeera. NOTE: A very good reference on this is: Christof Rühl speaking last week to bne inelligence. I strongly concur with him. (this note added 15 Mar.)

Continue reading

My Al Jazeera comments: OPEC+ strikes delicate balance as UAE & Russia defy Saudis

Here’s an English transcript of my Al Jazeera comments on OPEC+ negotiations and some further remarks on the group’s agreement to raise production.
Good evening from Berlin.
Answer 1. Well, OPEC-Plus is faced with maintaining a very delicate balance.
On the one hand, demand in the Western world is down, its weak, while in the Eastern world, in Asia – in China and India – demand is relatively strong. And this is a complicating matter.
At the same time, in supply, in Libya, for example, the oil production is not under the [OPEC+] agreement and has been coming back on the market.
OPEC has been doing relatively well, in the last few months or so, of balancing the market. The question is, how to maintain this going forward, with its exports, how to balance supply with demand.
But what is appearing is not the big split between Russia and Saudi Arabia that we saw last year in the Oil Price War. Now we have differences … such as we see with the UAE [i.e., versus the Saudis]. The UAE would like, as we have seen, also Russia has said, an increase in production. That would be very difficult for other, more expensive producers to do at this point.
Answer 2: Yes. It does. I mean, of course the UAE has been getting a lot of press [about its demand to increase production], … so it is a matter of how serious the UAE is, and how serious the Russians are to want to raise production in some way.

Continue reading

How fast can Libyan oil recover? (I’m quoted by CNN)

160719181131-chart-libya-oil-production-780x439

CNN 20 July 2016

The oil market remains glutted, with price in the mid-$40’s.  Despite furtive hopes over recent weeks  by the business press about “imminent re-balancing” of global supply v. demand and about “draw downs” of record-high global storage inventories, data reveal only incremental re-balancing has occurred since fall of 2014 when this all began. (And, from November 2014,  the Saudi’s responded by fighting for their market-share rather than for boosting price, which would have been impossible for OPEC to do on its own given the huge supply glut.)

Continue reading

Don’t write off American oil boom despite OPEC – CNNMoney cites my analysis

cnn_money-chart-oil-production-down-slow-01jun16

I was interviewed today by CNNMoney’s Matt Egan on what  OPEC should expect from US shale as they hold their 169th “Ordinary Meeting” in Vienna tomorrow (2 June).  Indeed, at some point oil production and demand will balance (likely in 2017), and then the Saudis and OPEC will have to cautiously test the presently unknown dynamics of high-tech US shale on the rebound. -Egan cites my point  of view in his article. Read on … – Tom O’D.

Don’t bet against the resilience of U.S. oil companies

by Matt Egan @mattmegan5 CNNMoney (New York) June 1, 2016: 12:23 PM ET

Many expected U.S. oil output would collapse under the weight of a lengthy price war with the mighty OPEC, the fractured oil cartel that’s meeting in Vienna Thursday.

The U.S. oil boom, fueled by the shale revolution, has obviously taken a few punches from OPEC’s strategy of all-out pumping. But the latest numbers show that American production continues to remain stubbornly high in recent months despite the crash in crude to as low as $26 a barrel in February.

The U.S. pumped 9.13 million barrels per day in March, down by a miniscule 6,000 barrels from the prior month, according to stats released this week by the U.S. Energy Information Administration. That represents a deceleration from recent monthly declines. By comparison, daily U.S. output dropped by 58,000 barrels in February and by 83,000 barrels in December.

Continue reading

My IP Journal latest: “A firm US-EU partnership on Iran came at great cost, and made a deal possible”

EU and Iranian foreign ministers (foto: Austrian Foreign Ministry)

EU and Iranian foreign ministers in Vienna (Austrian Foreign Ministry)

My latest at the IP Journal of the German Council on Foreign Relations (DGAP)US-EU Cooperate on Iranian Nonproliferation:  Agreement positions Tehran as regional leader — IP Journal 14/08/2014 

Although negotiators failed to reach agreement on Iran’s nuclear program by the late-July deadline set last November, as Iran’s Foreign Minister Mohammad Javad Zarif put it: “We have made enough headway to be able to tell our political bosses that this is a process worth continuing. … I am sure Secretary Kerry will make the same recommendation.” Indeed, Washington, Brussels, and Tehran readily agreed on a four-month extension.

This represents a sea change in tone from the period prior to November 2013, Continue reading

DW in Spanish || Obama y Rouhani: ¿Llegarán a un acuerdo nuclear/petrolífero?

ObamaRouhani-usip

[Note: This post on the Iran crisis is in Spanish, consisting of my written answers to the host of “Agenda” on the Deutsche Welle network–the German international TV service.] 

Hoy mi blog es en Español. Trata de la crisis nuclear entre Iran y los EEUU. Aquí abajo están mis respuestas que escribí a las preguntas del entrevistador de el programa ‘Agenda’ en Deutsche Welle, la red internacional de televisión de Alemania (con algo explicaciones adicionales).

Pregunta: Irán quiere poner en marcha las negociaciones con grandes potencias por el tema nuclear, porque creé usted que lo hace ahora?  En qué términos?

Repuesta: Pues, permítame explicarle las razones por las cuales ambos lados ahora quieren reiniciar negociaciones:

(a) Para el gobierno de los EEUU Continue reading