Iraq and Iran plot oil revolution in challenge to Saudi Arabia: Iraq's goal of pumping 9m barrels a day of crude could be a game changer for oil pricesWell yes indeed: there is enough oil in Iraq alone to achieve that. Whether there are enough competent oil engineers there is another question: I knew loads of the old Iran hands who were sent packing in 1979, and after their departure the mullahs somehow never managed to get the stuff flowing properly again, despite having all the incentive in the world. It really isn't as easy as it looks, even if the Telegraph is correct when it goes on to say:
BP and Royal Dutch Shell are also poised to benefit from Iraq's ambitious production plans. Both companies are already managing two huge oil fields in southern Iraq which are vital if Baghdad is to achieve its goal.But that's just the technicalities. The plentiful Iraqi resources that are widely said to be 'available' with per-barrel production costs less than $10 are probably real enough; but '$10' is before you factor in the need to pay off or repulse every bugger with a stick of semtex for 500 miles.
Now as we know, our old friend Volodya (that's Mr Putin, Sir, when oil is above $100) will be well up a gumtree were the price of oil to plummet. I don't know what that tells you about the proliferation of semtex in the Middle East but there's probably some kind of inverse relationship to be hypothesised.
One thing the greenie-reds always chime in with at this point is: shale production (gas and oil) is also scuppered by oil prices much below $100. Maybe, but so what ? Supply & demand, commodity cycles - stuff happens. (Sunk costs happen as well and ignorant people are endlessly surprised by how that works out.) I'm a consumer, I like low prices. Still, it might mean Putin has a few fellow travellers down his path.
ND
7 comments:
The problem in Iraq, ever since GWB helpfully intervened, has been that it's quite difficult to get the oil from the pump to the pump, as it were. If someone can solve that then western consumers won't be the only ones celebrating.
I don't think we (consumers) care much whether cheap energy comes from under Kurdistan or Kingston-upon-Hull as long as it's cheap. And the gas will still be under the Northern Rocks when the Iraqi stuff starts to run out.
We might have done some work on energy efficiency by then!
Yes, no shortage of friends wanting to keep the oil price high with chaos in Iraq http://www.gregpalast.com/how-george-bush-won-the-war-in-iraq-really/
Or as The Sun might have put it:
The Price of Oil Looks Sheiky.
yet again, Kev, you are short-listed for whatever prize we may bestow one day
that's quite a story you've linked to, BSJ
yes, it never goes away, BE (but it does help to know exactly what's down there...)
If the Sunni-Shia 30 yrs war is just getting started, then why is Shell selling Brazilian assets? Seems strange to part with safe resources just now.
Used to supply to NIOC but the problem was always payment that was routed through Bank Mellat. There were various levels of bureaucracy and temporary shortages of hard currency to pay - surprisingly.
Then the US would get involved banning this, that and the next even though it was trade between two sovereign countries.
It may have changed but I not heard that is has.
Was it an Iranian cock-up or US/Saudi conspiracy? Would like to know.
it's beyond me, Brian
Anon - in the Khomeini days I was in negotiations with an Iranian team for the sale (to them, don't ask) of some petroleum lubricants
things had reached a bit of an impasse on a knotty item when one of the leaned forward and said - if you don't give me the concession I need, my wife and family will be arrested
an unusual negotiating ploy ...
Post a Comment