Oil Supply Problems
Posted: Mon Mar 28, 2016 9:24 am
Crude oil macro: Meaningful physical outages continue, with total lost production of about 400,000 b/d.
Nigeria: Loss of 250,000 b/d to 300,000 b/d due to pipeline attack/explosion on or about 3/7/2016, various updates this week indicate the pipeline will be down until May.
Iraq/Kurdistan: The Ceyhan pipeline, which was shut in on or about 3/7/2016: various updates this week indicate Iraq will not resume pumping crude through the pipeline unless it reaches a financial agreement with the Kurdish regional government. Impact: Loss of about 150,000 b/d.
Venezuela: On March 24, 2016, Reuters reported serious delays to load and unload vessels at Venezuela's main crude port have created a backlog of tankers that is now extending to the island of Curacao, according to traders, a union representative and Thomson Reuters data. Some 70 tankers were anchored around state-run PDVSA's ports in Venezuela and the Caribbean, most of them waiting to load oil for exports and also to discharge imported crude and products, according to Thomson Reuters vessel tracking data. A union leader and a legislator blamed technical problems with the Jose Port's loading arms that are causing incremental delays for filling and discharging cargoes. Oil traders and union sources said the situation could worsen if out of service equipment is not repaired soon.
Iran: On March 24, 2016, Reuters reported Iranian oil flows to Europe have begun to pick up from a slow start after sanctions were lifted in January, but trading sources say a lack of access to storage, partly-owned by Tehran's Gulf Arab rivals now looms large on a list of obstacles. European countries accounted for more than a third of Iran's exports, or 800,000 barrels a day, before the European Union imposed sanctions in 2012 over its nuclear program.
With most U.S. sanctions still in place, there is no dollar clearing and there is no established mechanism for non-dollar sales and banks are reluctant to provide letters of credit to facilitate trade.
Iranian oil officials and international traders have also grown increasingly concerned by a delay regaining access to storage tanks in Egypt's port of Sidi Kerir on the Mediterranean coast. As of now, there is no tankage for Iran there. Before sanctions, it was Iran's main terminal for supplies to Western nations, one Iranian oil source said. Sidi Kerir, which connects to the Red Sea via pipelines also owned by SUMED, which is half owned by the state-run Egyptian oil company with the other half owned by Kuwait, the UAE, Qatar and Iran's arch rival Saudi Arabia.
Nigeria: Loss of 250,000 b/d to 300,000 b/d due to pipeline attack/explosion on or about 3/7/2016, various updates this week indicate the pipeline will be down until May.
Iraq/Kurdistan: The Ceyhan pipeline, which was shut in on or about 3/7/2016: various updates this week indicate Iraq will not resume pumping crude through the pipeline unless it reaches a financial agreement with the Kurdish regional government. Impact: Loss of about 150,000 b/d.
Venezuela: On March 24, 2016, Reuters reported serious delays to load and unload vessels at Venezuela's main crude port have created a backlog of tankers that is now extending to the island of Curacao, according to traders, a union representative and Thomson Reuters data. Some 70 tankers were anchored around state-run PDVSA's ports in Venezuela and the Caribbean, most of them waiting to load oil for exports and also to discharge imported crude and products, according to Thomson Reuters vessel tracking data. A union leader and a legislator blamed technical problems with the Jose Port's loading arms that are causing incremental delays for filling and discharging cargoes. Oil traders and union sources said the situation could worsen if out of service equipment is not repaired soon.
Iran: On March 24, 2016, Reuters reported Iranian oil flows to Europe have begun to pick up from a slow start after sanctions were lifted in January, but trading sources say a lack of access to storage, partly-owned by Tehran's Gulf Arab rivals now looms large on a list of obstacles. European countries accounted for more than a third of Iran's exports, or 800,000 barrels a day, before the European Union imposed sanctions in 2012 over its nuclear program.
With most U.S. sanctions still in place, there is no dollar clearing and there is no established mechanism for non-dollar sales and banks are reluctant to provide letters of credit to facilitate trade.
Iranian oil officials and international traders have also grown increasingly concerned by a delay regaining access to storage tanks in Egypt's port of Sidi Kerir on the Mediterranean coast. As of now, there is no tankage for Iran there. Before sanctions, it was Iran's main terminal for supplies to Western nations, one Iranian oil source said. Sidi Kerir, which connects to the Red Sea via pipelines also owned by SUMED, which is half owned by the state-run Egyptian oil company with the other half owned by Kuwait, the UAE, Qatar and Iran's arch rival Saudi Arabia.