Page 16 - MEOG Week 27

MEOG n e W s in B rie F MEOG

ADNOC to boost August oil barrel in April, helped by OPEC+ cuts and
oi L a barrel from a 21-year low below $16 a
Jordan says Iraq to resume exports as OPEC+ cuts set a recovery in demand as governments ease
coronavirus lockdowns.
oil supplies this week to ease russia have to perform a balancing act of
Saudi Arabia, OPEC’s de facto leader, and
Jordan said that neighbouring iraq expected Abu Dhabi National Oil Company (ADNOC) pushing up oil prices to meet budget needs
to resume transporting crude oil over the plans to boost its oil exports in August, while not driving them too high to avoid a
border by truck in the next few days after the first signal that OPEC and its allies are resurgence of U.S. shale production.
Baghdad suspended supplies last week due to preparing to ease record oil output cuts reUters
a steep fall in global oil prices. next month, three sources familiar with the
Jordanian Energy Minister Hala Zawati development told reuters. Iran’s oil storage almost full
told reporters on Tuesday that iraqi officials The Organization of the Petroleum
had notified the Amman government they Exporting Countries and allies led by russia, as sanctions and pandemic
would begin loading from the Kirkuk oilfields known as OPEC+, have been cutting oil
on Wednesday, with deliveries expected to output since May by a record 9.7 million weigh
arrive at Jordan’s border on either Thursday or barrels per day after the coronavirus crisis
Friday. destroyed a third of global demand. iran has slashed crude oil production to its
Under an agreement signed last year, iraq After July, the cuts are due to taper to 7.7 lowest level in four decades as storage tanks
provides Jordan with 10,000 barrels per day, million bpd until December although a final and vessels are almost completely full due to
covering 7% of the country’s daily needs, decision has yet to be taken. a fall in exports and refinery run cuts caused
Zawati said at the time. Key OPEC+ ministers hold talks next by the coronavirus pandemic, industry data
Jordan said on July 2 that iraq had asked week. showed.
to suspend supplies when oil prices went industry and trading sources said ADNOC Total onshore crude stocks surged to
below $20 a barrel, making it uneconomic for plans to raise its crude oil exports by as much 54 million barrels in April from 15 million
Baghdad to sell under a price formula tied to as 300,000 barrels per day in August, citing oil barrels in January, and swelled further to 63
Brent oil prices and accounting for transport loading programmes by the company. million barrels in June, according to FGE
and insurance costs. Gulf OPEC producer the United Arab Energy.
“We were understanding of the iraqi Emirates will pump according to its output Market intelligence firm Kpler estimated
position,” Zawati said on Tuesday. quota under the OPEC+ agreement, which iranian average onshore crude storage for
The deal was part of a broader push by is 2.590 million bpd, up from 2.446 million June to be around 66 million barrels.
Jordanian Prime Minister Omar al razzaz to in July, the sources familiar with ADNOC’s That is around 85% of available onshore
expand trade ties with his country’s eastern exports and production plans said. storage capacity.
neighbour and press ahead with an oil ADNOC declined to comment. “However, it will technically not be
pipeline project to export iraqi crude from ADNOC has notified its customers of its possible to fill tanks to 100% given technical
Jordan’s red Sea port of Aqaba. plans to cut crude oil nominations for August constraints at storage tanks and potential
Zawati said she expected the oil pipeline by 5% for all grades in line with OPEC+ pact infrastructure bottlenecks,” said Homayoun
to take three years to construct once a final to reduce oil supplies, a source told reuters Falakshahi, a senior analyst at Kpler.
agreement was signed with Baghdad. The two last month. Tensions between Tehran and Washington
countries reached a preliminary agreement Last month, OPEC+ sources told reuters have ratcheted up since 2018, when the
last year to pursue the project, estimated to that OPEC and russia will likely ease record United States withdrew from a 2015 nuclear
cost about $5 billion. oil production cuts from August as global oil pact between iran and six major powers and
reUters demand recovers and prices have bounced President Donald Trump reimposed sanctions
back from their lows. on iran, hammering vital oil exports.
Oil prices have recovered to above $43 iran’s floating storage is also filling up.
Shipping sources said iran was estimated to be
using in the region of 30 tankers to store oil –
most of them supertankers, each of which can
carry a maximum of 2 million barrels of oil.
This would equate to over 50 million
barrels of oil being stored, which has been
static for some months. This is likely to be a
combination of crude and condensate, a very
light grade of crude, the sources said.
refinitiv data showed a maximum of 56.4
million barrels were being held in floating
storage by July 3.
iran’s fleet of crude oil tankers numbers
54 vessels, data from valuations specialist
VesselsValue showed.
“iran storage is expected to continue as we
do not see these vessels being able to trade

P16 www. NEWSBASE .com Week 27 08•July•2020