Daily Management Review

Five countries that can push oil prices up


Oil prices seem to be stuck in the region of $ 50 per barrel, but this does not mean that there are no risks on the market related to supply disruptions.

Unexpected interruptions can occur at any time, as has already happened in the past. The geopolitical processes taking place in the world did not exert too much influence on the price dynamics since 2014, when the oil price crashed. Therefore, experts believe that interruptions in oil supplies will have a greater impact on oil prices.

Citi’s report says that five unstable oil-producing countries - Iran, Iraq, Libya, Nigeria and Venezuela - keep bearing the risks of possible supply disruptions. So, supplies from northern Iraq are threatened by the escalation of the conflict between the Kurdistan Regional Government, Baghdad and Turkey. Indeed, the five countries represent a potential threat for the oil market, each for different reasons.


Experts believe that the biggest risk comes from Iraq. The unexpected seizure of the Kirkuk field by the Iraqi government has already led to interruptions in the supply of oil. As of October 19, the Bai-Hassan and Ayana fields near Kirkuk were closed. This means that delivery of at least 275,000 barrels per day has ceased.

It is assumed that interruptions will be temporary. A source told Reuters last week that it is searching for certain equipment that is needed to restore work in the fields.

The supply of oil in the Turkish port of Sheikhan, which usually receives oil from northern Iraq, fell to 196,000 barrels per day as a result of interruptions. Experts believe that possible outages will grow to 600,000 barrels per day, but they will be temporary.


According to experts, this country represents the greatest uncertainty in this list. At the same time, it is in the strongest position, compared to other countries included in the list. The danger for Iran is the possibility of renewing US sanctions, which will lead to a sharp reduction in Iranian exports.

It can also scare potential investors, even despite Rex Tillerson's assurances that the US will not seek to block business between Iran and European companies. According to Goldman Sachs, US sanctions will return with the worst development of events, which will lead to interruptions in the supply of several hundred thousand barrels of oil. However, this situation is considered only hypothetically, and experts believe that it is not worth seriously considering.


Despite the fact that Libya is a member of OPEC, it was an exception to the OPEC agreement to reduce production. At the same time, last year the country represented a downward risk for the oil market. This can be explained by the fact that it tripled production - from 300,000 barrels per day in August 2016 to almost 850,000 barrels per day at the moment.

Nevertheless, the damage done to export terminals in this country suggests that the supply in the short term has a ceiling of 1.25 million barrels per day. This means that Libya will not be able to return to pre-war levels of supply of 1.6 million barrels per day. However, the country is still a danger to the world oil market, as the country is highly unstable, and even the volumes that the country has achieved so far may face the threat of interruptions.


The situation here is reminiscent of Libya. The country has also become an exception to the OPEC agreement due to instability and a high level of violence and terrorism. Over the past year, the situation in the country has generally remained calm, which led to an increase in the level of oil production from 1.2 million barrels per day to 1.8 million barrels per day at the moment. However, the potential further growth in production is also limited, including because the country has promised to cut production when the level reaches 1.8 million barrels per day.

Nevertheless, peace in the country remains fragile. At any time, terrorist attacks can resume, which will undermine the supply of oil from this country.


Experts believe that the situation in this country will only worsen, which will lead to a sharp reduction in oil supplies. As of September of this year, Venezuela produced 1.89 million barrels per day, compared with 3.2 million barrels per day in the late 90's. For comparison, the country produced almost 2.4 million barrels per day in 2015.

Without money, the state-owned oil company PDVSA cannot invest in developing new fields and supporting existing fields in order to maintain production levels. According to reports, the quality of oil, which is still produced in this country, has become worse than before. The fact is that PDVSA does not have enough funds for high-quality processing of heavy crude oil.

In addition, the company has accumulated serious debts, which it will have to pay in the next couple of weeks. Analysts even predict the announcement of a default on debts.

All this creates instability for the oil market.

source: businessinsider.com

Science & Technology

Facebook may start production of its own microprocessors

Long-Term Alcohol Monitoring Could Be Possible With A New Injectable Chip Developed By U.S. Researchers

Sweden Now Has The First Electrified Road In The World

Over 270,000 Account Globally Banned From Twitter For Promotion Of Terrorism

Device Capable Of Hearing The Inner Voice Developed By Researchers

New mobile technologies will warn about natural disasters

The brewing industry welcomes blockchain

Asset-Sharing App Of Ryder Is Meant For Commercial Vehicles

Credit Suisse: China will become the leader in AI sphere

Five new technologies that will change the world

World Politics

World & Politics

Debates over Google are heating as a new EU directive is about to be introduced

Will Merkel accept Macron's plans for Europe?

USA and China are pushing North Korea to denuclearization

Germany's dilemma: Will the atomic energy win?

A Forceful Response To Syria Attack Will Be Given By U.S.: Trump

Is Trump’s Maximum Pressure Tactic On North Korea Succeeding Because Of China?

Why are Turkey-EU relations moving back?

Record-Breaking $39 Million raised for Rare Cancer Research in 2018 by Cycle for Survival