THE MONTH IN BRIEF: China fears send crude prices tumbling, Iran demands action from OPEC, and Kurds threaten oil and gas attacks in Turkey

• Published date: 01 September 2015
• Date: 01 September 2015
• DOI: http://doi.org/10.1111/oet.12314

THE MONTH IN BRIEF

is section summarizes downstream developments of the previous month. Exploration & Production are covered in

“Upstream Review”.

China fears send crude prices tumbling, Iran demands action from OPEC,

and Kurds threaten oil and gas attacks in Turkey

A sharp fall in Chinese share prices sparked fears of

a cut in China’s oil imports. Brent prices fell from the

$49.52/bbl seen at the start of the month to $42.51 in

futures’ trading on 24 August. West Texas Intermediate

lost $7.42/bbl over the same period, briey touching

$37.75 before recovering slightly, all of which sent global

crude prices to their lowest level since early 2009. e

Iranian government responded to the decline in prices

by calling on OPEC to convenean emergency meeting of

oilministerstodiscusswaysofbolsteringcrudeprices.

Support for the Iranian move c ame from Venezuela

and Algeria, but Saudi Arabia privately indicated its

opposition to an emergency summit, having earlier

ruled out a cut in its own oil production, arguing that

this would lead to a loss of market share. Iran me anwhile

continuedtoselloilfromitsoatingstockpileinthe

Persian Gulf, estimated to exceed 50mn bbl. Switzer-

land became the rst country to li sanctions against

Iran following July’s agreement on Iran’s nuclear fuel

enrichment programme. e move is largely symbolic

because Switzerland does not appear to have imported

any Iranian crude for nine years.

e ending of a three-year truce between the Kurdis-

tan Workers’ Party (PKK) and the Turkish government

was followed by an attack by Turkish forces on PKK

positions in the s outh-east of the country. e PKK

responded by threatening to attack oil and gas installa-

tions in Turkey. An attack was reported on the 2.4 bn cfd

pipeline bringing gas from Azerbaijan to Turkey. An

oil production site w as also targeted. e Turkish gov-

ernment blamed the PKK in each case. In Iraq, the

Kurdistan Regional Government (KRG) has accused

the Turkish government of failing to protect the Turk-

ish section of t he oil pipeline from Iraq to Ceyhan .

Exports from Iraq and Kurdistan were interrupted aer

an unknown group attempted to steal crude from the

pipeline inside Turkey. e KRG is estimated to have

been exporting 600,000 bpd of Kurdish crude via the

pipelinejustbeforethelinewasattacked.

In Colombia, the oi l pipeline conne cting the

70,000 bpd Caño Limon eld to an export terminal

on the Caribbean was reop ened following a bomb attack

in June. Uganda and Kenya agreed on a route for a

proposed export pipeline connecting Uganda’s oilelds

withaterminalontheIndianOceanattheKenyan

port of Lamu. It is planned to start work on the 930-mi

pipeline in late 2016. Libya’s oil production went up

by 35,000 bpd in August, according to the National Oil

Corporation. A huge explosion in t he Chinese port of

Tianjin caused the closure of a nearby 400,000bpd oil

import terminal. e US Department of Commerce

said it would allow light US crude oil to be swapped for

heavy Mexican crude in some cases but would not allow

swaps with other countries. Russia’s Gazprom Ne was

reported to be discussing the sale of crude to China

using the rouble as a way of reducing reliance on the US

dollar.RussiaandAlgeriaagreedtocooperateonanum-

ber of energy projec ts. Brazilian pros ecutors charged

the Speaker of the Lower House of Parliament with

bribery and corruption in the latest of a series of moves

against politicians and ocials in connection with a

bribery scandal aecting the national oil company,

Petrob ras.

Samirannouncedthetemporaryclosureofits

200,000 bpd Mohammedia renery in Morocco, citing

nancial problems. Petronas began construction work

on its 300,000 bpd renery and petrochemical complex

in Johor, which will be Malaysia’s largest renery when

it opens in 2019. Egypt’s Ministry of Petroleum and

Mineral Resources said that the widening of part of the

Suez Canal, whichshould allow the eventual doublingof

trac on the canal, will be accompanied bythe building

of a number of reneries and petrochemical complexes

at both ends of the route.

© 2015 John Wiley& Sons Ltd