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

Australian Research Success Could Mean Shatterproof Cell Phones Could Soon Be A Realityv

Top ten hi-tech events of the year

Tesla Considering Designing And Developing AI Chips On Its Own To Support Its Auto-Pilot Project

Verizon to introduce 5G in five American cities in 2018

Airbus, Rolls-Royce, Siemens to create an electric aircraft

Study Finds Treatment Efficacy Could Be Sacrificed For Reduced Side Effects In Cancer Therapies By Patients

Some Information About Their Self-Driving Car Research Has Been Disclosed By Apple Scientists For The First Time

A Massive Data Breach Was Covered Up By Uber By Paying Up Hackers

A City Is Can Be Converted To A Living Organism, Showcases China’s Huawei

Workers Would Be Helped To Lift More By These Robotic Vests

World Politics

World & Politics

15 countries with the highest level of organized crime

Athens agreed with international lenders

EU Pressure Reportedly Forces UK To Bow Down, Could Agree To Pay £50bn For Brexit Divorce

$1 Billion Is The Price For Freedom For Arrested Saudi Prince In Corruption Crackdown: Reports

U.S. Capital Washington Appears To Be In Range Of The Latest Missile Launched By North Korea

Ten biggest fears of millennials

Ireland Cancels The Need Of A Veto For Brexit Summit With Its Solidarity

Separatists of Catalonia are divided over the political course