THE MONTH IN BRIEF: OPEC extends cuts, Saudi Crown Prince goes on the warpath and Iraq seeks new export route

• Published date: 01 December 2017
• Date: 01 December 2017
• DOI: http://doi.org/10.1111/oet.12541

THE MONTH IN BRIEF

OPEC extends cuts, Saudi Crown Prince goes on the warpath and Iraq seeks

new export route

OPEC’s ministers, meeting in Vienna on November 30

agreed, along with their allies from outside the Organi-

zation, to extend their production cuts of 1.8 mn bpd to

the end of 2018 aer March 31, when they were due to

expire. Oil markets had alreadypriced-in such a deal and

rose by about a dollar in the run-up to the meeting and

duly went down by a similar amount following reports

of an agreement that there would be a review of the deal

next June to see if the cuts could be abandoned earlier

than planned. Brent nally made a m inor move upwards

but still ended the day belowthe high for the month.

Saudi Arabia’sCrown Prince, Muhammad bin Salman

began a purge of high-ranking ocials in the gov-

ernmentaspartofwhatwasdescribedeitherasa

crack-down on corruption or a bid to entrench his

power by removing a number of powerful opponents.

e move helped to produce a rise of $2.20 in January

Brent futures, taking the UK benchmark to $64.27/bbl.

Further support for prices came from a statement from

Riyadh denouncing a missile attack on the Saudi capi-

tal by Houthi forces in Yemen as an act of war by Iran,

which supports the Houthis in their struggle against the

Saudi-backed Yemeni government.

e Syrian government said that its forces had recap-

tured most of the oilelds once controlled by Islamic

State, although it is still not fully in control of its main

oil-producing province of Dair al-Zur. Oil exp orts from

the Turkishp ort of Ceyhan fell sharply in the wake of the

Iraqi army’s takeover of Iraq’s northern eld-complex

centered on Kirkuk from the Kurdish forces that had

been occupying the area. Baghdad stopped crude

exportsfromKirkuktoCeyhanviapipelinesownedby

the Kurdistan Regional government (KRG), cutting the

volumessenttoCeyhanbyuptotwo-thirds,asexports

from KRG-controlled elds fell as well. Iraq revealed

plans for a separate pipeline f rom Kirkuk to Ceyhan that

avoids the territory of the KRG, while als o announcing

that a 900,000 bpd single-point mooring system had

been added to its Persian Gulf export facilities, raising

total capacity there to 4 .6 mn bpd.

e Niger Delta Avengers threatened to resume

armed attacks on oil and gas f acilities in Nigeria, follow-

ing a cease-re lasting several months. e government

said it would import a number of crude distillation units

of up to 30,000 bpd each in an attempt to address the

shortage of rened products in the Delta region caused

byattacksonoilinfrastructureandtoprovideemploy-

ment in the economi cally depressed region. President

Muhammadu Buhari said that Nigeria must rely less

on revenues from oil, whi ch make-up about 80% of

government earnings. Libya said it was seeking nance

to rebuild and enlarge the al-Sidra export terminal,

which has been badly damaged in the country’s civil

war. It handles about 200,000 bpd at present and the

plan is to raise this to 600,000 bpd.

Many large oil traders are reported to have secured

exemptions from the EU’s proposed limits on the

volume of nancial derivatives they can hold. e mea-

sures,knownastheMarketsinFinancialInstruments

Directive (MIFID), aect oil futures markets, amongst

others, and are due to come into force in January. Russia

agreed to restructure $3bn worth of debt owed by

Venezuela by extending the repayment period. Caracas

is trying to renance an estimated $60 bn ofdebts, many

of which are related to its oil i ndustry. e Russians have

also agreed to cooperate on energy projects with Iran

and Azerbaijan.

e UK is to increase taxes on new diesel motor

cars and promote electric vehicles. Shell announced

plans for 500 chargers for electric vehicles across the

EU. Abu Dhabi National Oil Company (ADNOC)

said it was seeking to raise $2 bn from the privati-

zation of its downstream retail business. It is als o to

increase its renery capacity by 0.9– 1.2 mnbpd. Saudi

Aramco announced proposals for a 300,000 bpd rening

joint-venture with Norincoat Panjin in northeast China.

e Saudi company also revealed it was in talks with

state-owned companies in India over a new renery

there.

© 2017 John Wiley& Sons Ltd