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Destroys OPEC’s game plan – Five Countries
A trade war between the U.S and China grow, financial markets are on edge, few good news for markets, with oil markets, moves regarding rebalancing. The current recent OPEC production cut agreement shows the additional cuts by non-OPEC countries which caused to increase the oil prices to touch post-2014 high. Among other oil producers as the world waits to see true to the agreement which each country will remain same in Russia and Saudi Arabia. The countries who were never part of the agreement or absolved from it is the most important way. The countries that destroy OPEC’s game plan are Libya, Iraq, Iran, Russia, and Nigeria.
Countries that could demolish OPEC’s plan
LIBYA – Libya proposed to cut the rising oil production supply easily. Recently, the oil exports terminals were resumed in Libya’s key oil. This can bring 270,000 bpd back to the market, which tastes how Libya if peace prevails, and also increases its production. The addition of 270,000 barrels accounts to a quarter of the OPEC production cut.
IRAQ – Iraq battled hard to be excused from any cut or freeze and also quarreling that they need money “to fight ISIS” and while it finally accepted a cut, the risk of this huge oil nation is cheating on this deal may be significant. Iraq’s output has been grown at starting rate last year. They recently signed a deal with Lukoil, the Russian energy giant to jump into the West Qurna-2 reservoir added to the concerning countries.
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IRAN – Iran was not cleared from the deal but agreed to a production to freeze at 3.8 million barrels per day. This country has also been busy signing deals with oil giants to rise its production. As the sanctions are being lifted from Iran, it now sees the whole world to open up as a potential market which may prove very hard to refuse.
The kingdom had already produced the burnt of its decision in 2014 to not to cut the production. We saw how the country’s masses, the leisure of not working, turned against the country’s gerontocracy when the pay was slashed, subsidies removed and holidays curtailed. And the Foreign Exchange reserves of the Saudis were being depleted at a remarkable rate. These factors may explain the display of flexibility by the Kingdom conference on 30th of December at the Vienna. And also prospects for Iran is just opening up after the Obama administration signed the nuclear deal with the Islamic Republic. The deals are being lifted from Iran, which now sees the whole world up as a potential market which may prove very hard to refuse.
RUSSIA – The appointment for Rex Tillerson as Secretary of State and the various suggestions by the US President Election to lift the parties could be characteristics of larger production from Russia.
NIGERIA – Nigeria is busy fighting with BokoHaram and undertaking to strike for some political deal with the Niger Delta Avengers. Except for the oil deal, its production stands at around 1.6 Mbps. President Buhari has assured to increase the production to 2.2mbpd. The statement which will not be welcomed by fellow OPEC producers.
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