A top military aide to Iran’s supreme leader warned this month that “The first bullet fired in the Persian Gulf will push oil prices above $100.”
“A limited war would likely push oil prices above $100 per barrel, while a major confrontation would likely drive prices above $150,” political risk consultancy Eurasia Group predicts.
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Iraqi Prime Minister Mustafa al-Kadhimi is under pressure from U.S. officials to escalate his government’s crackdown on Iranian-backed militias in Iraq, whose rockets have repeatedly targeted diplomatic and military sites used by Americans over the past year. President Trump has now told his advisers he is prepared to order a devastating response if any Americans are killed in attacks attributed to Iran.
With tensions running high, there are concerns here that provocative actions by either side could spark unintended conflict.
Trump Sought Options for Attacking Iran to Stop Its Growing Nuclear Program
Islamic State militants launched a rocket strike against an Iraqi refinery causing its shut-down, Reuters has reported, citing officials from the facility.
In a statement on the terrorist group’s official channel, IS took responsibility for the attack, which caused a fire at a fuel storage tank, which has been put under control.
“We completely shut down production units to avoid extensive damage that could result,” one of the Reuters sources said.
The coalition led by Saudi Arabia bombed camps of the Houthi rebels in Yemen on Friday after Houthis hit a petroleum distribution center of oil giant Saudi Aramco near Jeddah earlier this week, AFP reported on Friday, citing its correspondents and eyewitnesses.
The Saudi-led coalition hit sites believed to be holding rebels of the Iran-aligned Houthi movement in the Yemeni capital Sanaa, the port city of Hodeida, and the city of Amran north of Sanaa, AFP reports.
The OPEC meeting ended on Monday without an agreement among its members regarding the production cuts next year. Instead, the meeting ended with three of its heavyweights—Russia, Saudi Arabia, and the UAE—holding different opinions as to how to handle things going forward.
Despite the surge in coronavirus cases in recent weeks, crude oil demand in the United States could be on track to increase in the coming months as inventories have been steadily declining since their peak levels in the summer.
The meeting with OPEC+ was set to resume tomorrow, but a late—and a rather surprising—announcement came in the afternoon saying that the meetings had been rescheduled to December 3 as more talks are needed.
Saudi Arabia, as the predominant—and perhaps only—swing producer in the group is said to favor an extension of the current level of oil production cuts, according to an anonymous source who spoke to TASS.
Russia, the country that sank the deal in March over a similar issue, is said to favor a gradual increase in production starting in January.
The UAE, OPEC’s third-most prolific oil producer, is okay with extending the production cuts as-is into January and beyond only after all other OPEC members comply with their cuts. This was precisely what the UAE’s Energy Minister said a couple of weeks ago as well. The UAE made headlines last week after its largest state-run oil company, ADNOC, was rumored to be questioning the wisdom of its OPEC membership during these tough times.
The UAE’s Energy Ministry later issued a statement stressing the fact that it had always been a committed member of OPEC.
– U.S shale production is expected to decline by 140,000 bpd in December, month-on-month, according to the EIA.
– The declines are spread across all major shale basins. The Permian is expected to lose 37,000 bpd, with further losses from the Bakken (-33,000), Eagle Ford (-27,000 bpd), Niobrara (-22,000), and Anadarko (-20,000 bpd).
– Natural gas production is also in decline, with the Permian losing 128,000 mcf/d, and further losses from the Anadarko (-140,000 mcf/d), Appalachia (-133,000 mcf/d), Eagle Ford (-112,000 mcf/d), and smaller losses elsewhere.
– Drillers continue to tap their drilled but uncompleted wells (DUCs) as a source of new production. The DUC backlog fell slightly by 86 in October, the latest month for which data is available.
– Without a larger increase in the rig count, shale basins could continue to decline. Only the Permian has seen a notable increase in rigs in recent weeks.