Posted on 06/20/2014 7:44:59 AM PDT by thackney
Most of Iraq’s oil production has been unaffected by militant violence, according a report by IHS analysts.
That’s because the majority of the country’s production is concentrated in the southern part of the country, while the violence attributed to the Islamic State of Iraq and Syria, known as ISIS, is concentrated in the north.
The consulting firm, which counts many major energy companies among its clients, said it’s received no reports of shut-in production. Yet, despite the lack of disruption, crude oil and gasoline prices continue to rise.
Iraq was the world’s sixth largest net exporter of petroleum liquids in the world in 2012, according to the latest data from the U.S. Energy Information Administration, with the majority of its oil exports going to the U.S. and Asia.
On Thursday, there were conflicting reports about whether ISIS or the Iraqi government held control of the country’s largest oil refinery, located at Beiji, 155 miles north of Baghdad.
The country is currently producing about 3 million barrels of oil and 1.9 billion cubic feet of natural gas daily, IHS reports, citing the Iraq Ministry of Oil.
The country exports about 80 percent of its oil, and the majority of it goes through a terminal in the southern part of the country, far from the violence. A pipeline that exports a smaller portion of the country’s oil production north into Turkey has been out of operation for several months due to attacks unrelated to the ISIS violence, IHS said.
Meanwhile, the country’s most important producing fields are largely in southern Iraq, including its biggest producing field, Rumaila.
Most of the country’s large southern fields involve service contracts with major international oil companies like BP, Shell, Exxon Mobil, Lukoil, Eni Gazpro and Japex, according to IHS. Earlier this week, there were reports that BP and Exxon Mobil had evacuated some personnel from Iraq.
Yeah, that's the reality, as it most often is. And then there is the price of crude that eagerly looks for emotional reasons to swing the price way beyond rationality. But, yeah, profits are made.
If I ran a refinery that took in oil from overseas, this would be a time I would want my crude oil tanks topped off in case of a disruption in the near future.
Several hundred refineries around the world make that decisions, bumping up the short term demand, will raise prices.
Most production unaffected means some is shut down. I suspect some will be shut down for a while.
Yes, I understand that emotional interest in wanting to top off the tanks. That impulse, as this report points out, is not supported by the facts.
It is called insurance. You don’t buy insurance after the crash.
“..oil production has been unaffected by militant violence..”
if the oil companies follow their past practice, they will run the prices up under any pretext. They claim prices are a result of supply/demand, but that simply is not true.
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