Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
BREXIT, Italy’s Deficit, The EU Summit And Fomcs Minutes In Focus - 16th Oct 18
Is this the Start of a Bear Market for Stocks? - 16th Oct 18
Chinese Economic Prospects Amid US Trade Wars - 16th Oct 18
2019’s Hottest Commodity Is About To Explode - 15th Oct 18
Keep A Proper Perspective About Stock Market Recent Move - 15th Oct 18
Is the Stocks Bull Dead? - 15th Oct 18
Stock Market Bottoms are a Process - 15th Oct 18
Fed is Doing More Than Just Raising Rates - 14th Oct 18
Stock Markets Last Cheap Sector - Gold - 14th Oct 18
Next Points for Crude Oil Bears - 13th Oct 18
Stock Market Crash: Time to Buy Stocks? - 12th Oct 18
Sheffield Best Secondary School Clusters for 2018-19 Place Applications - 12th Oct 18
Trump’s Tariffs Echo US Trade Policy That Led to the Great Depression - 12th Oct 18
US Dollar Engulfing Bearish Pattern Warns Of Dollar Weakness - 12th Oct 18
Stock Market Storm Crash, Dow Plunges to Trend Forecast! - 12th Oct 18
SP500 Stock Market Sell Off Well Forecast by President Trump - 11th Oct 18
USD and US Tr. Yields Retreat, GBP Gains on Brexit-deal Report - 11th Oct 18
Loss Of Yield Curve "Shock Absorber" Could Mean A Rough Ride Ahead For Markets & Housing - 11th Oct 18
Just How Bearish is the Stock Market’s Breadth? - 11th Oct 18
Here’s Why Gold Stocks, Gold, and Silver Are Great Buys Now - 10th Oct 18
Russian Ruble Technical Chart Analysis and Forecast - 10th Oct 18
Society Trends To Keep in Mind in the USA - 10th Oct 18
[eBook] How to Identify Turning Points in the Market - 10th Oct 18
Euro Vulnerable as Slowing Growth Reveals Underlying Issues - 9th Oct 18
Construction Companies to Watch For in 2019 - 9th Oct 18
ECB Meeting Minutes and US Inflation Data in Focus - 9th Oct 18
Interest Rate Shock-Time to Find Out Who has been Swimming Naked - 9th Oct 18
Unintended Consequences of Expanding Sheffield's Best Ranking State Secondary Schools - 9th Oct 18
Crude Oil Price Trend Forecast 2018 Update - 9th Oct 18
Inflation Is Starting To Heat Up - 8th Oct 18
Stock Market Seasonal Influence at Work - 8th Oct 18
Barrick Randgold Deal Breathes New Life into Gold - 8th Oct 18
Stock Market Sell Off, Dollar Rally Expected, Now What? - 8th Oct 18
The Chartology of Gold and Silver - 8th Oct 18
The Income for Life Playbook - 8th Oct 18

Market Oracle FREE Newsletter

Trading Any Market

Violence Threatens to Thwart Iraqi Crude Oil Resurgence

Commodities / Crude Oil Jan 09, 2014 - 03:14 PM GMT

By: OilPrice_Com

Commodities

A wave of violence has swept parts of Iraq at the start of 2014 as the central government fights back against Al-Qaeda aligned militants in Anbar Province. The Islamic State of Iraq and the Levant (ISIL) reportedly took control of Ramadi and Fallujah, bombing police headquarters and killing dozens. On New Year's Day Prime Minister Nouri al-Maliki sent in reinforcements to take back control of Anbar Province's two largest cities. The clashes kick off 2014 in much the same way as 2013 ended – a return to violence in a country that had seen important security gains in recent years.


Over 7,800 civilians were killed in Iraq in 2013, the bloodiest year over the past five. The latest violence occurred in Anbar Province, a region that dogged the U.S. military during its decade-long war. ISIL is also engaged in fighting Syrian President Bashar al-Assad, and the latest string of events indicates that the violence of the Syrian civil war is spreading deeper into Iraq.

The conflict has yet to affect Iraq's oil fields, and production hit 3.2 million barrels per day (bpd) in December, the most since August 2013, according to Bloomberg. To be sure, the violence does not pose an immediate threat to Iraq's oil output, as three-fourths of the country's production comes from the South, and much of the rest from Kurdistan in the North. In fact, according to the EIA, a majority of Iraq's oil production comes from three fields – Kirkuk, and the North and South Rumaila fields near Basra. The latest violence is not located near these areas.

Still, the instability and the loss of control of key cities by the Iraqi government underscores the intense security challenge facing the country as it seeks to ramp up oil production in the coming years. Iraq has a stated goal of tripling oil production to 9 million bpd by 2020. In a 2012 special report on Iraq, the IEA estimates a slightly less rosy figure of 6.1 million bpd by the end of the decade in its central scenario.

With the immense challenges facing Iraq's oil sector, even doubling today's output over the next six years looks rather ambitious. Iraq still has not agreed on a hydrocarbons law that would outline oil governance. Kurdistan is making brazen moves aimed at increasing its independence from the central government in Baghdad. This may help to boost Kurdish oil production, but political conflict between the semi-autonomous region and the Maliki government casts a shadow of uncertainty over the country's oil industry. Most importantly, however, is the violence that threatens the stability of Iraq, which is now the second largest OPEC producer after Saudi Arabia.

While Iraq's failure to meet its ambitious oil production goals may seem to be a problem solely for Iraq, oil consumers around the world may be more dependent than they realize on the oil fields of Rumaila and Kirkuk. Over the next 20 years, according to the IEA's latest World Energy Outlook, Iraq will account for the largest source of additional oil production to global markets. Yet, its failure to live up to those hopeful projections – and given the latest reports of violence, that seems entirely plausible – will send prices much higher than the 2035 price of $128 per barrel that the IEA predicts, as supply does not keep pace with demand.

Source: http://oilprice.com/Energy/Crude-Oil/Wave-of-Violence-Threatens-Ambitious-Iraqi-Oil-Goals.html

By. Nicholas Cunningham of Oilprice.com

© 2013 Copyright OilPrice.com- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules