Oil Daily | Iraqi-Kurdish Oil Export Deadlock Continues as Companies Await Regulatory Clarity
Tuesday, Dec 10, 2024 7:00 am ET
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【Oil-Producing Countries Dynamics】
The Iraqi parliament ended this year's session without reaching an agreement with Kurdistan on the export of crude oil. The deadlock, caused by disagreements over compensation costs, led to the withdrawal of Kurdish parliamentarians and a delay in the final decision until the new session in January. The dispute over Kurdish oil exports has persisted since a 2023 ICC ruling favoring Iraq's authority in approving exports. International oil companies have suspended operations, awaiting clarity on regulatory changes. Most issues have been settled, but a final deal remains pending.
The IMF predicts Kuwait's economy will remain in recession due to ongoing OPEC oil production cuts, with a projected recovery over the medium term. Kuwait's GDP contracted due to reduced oil output, and its economy heavily relies on oil revenues, making it vulnerable to price swings. Despite past economic growth driven by high oil prices, Kuwait now faces challenges, including high inflation and a continued recession, contrasting with neighboring countries' efforts to diversify economically.
KUFPEC plans to bid for more oil and gas blocks offshore Indonesia, focusing on the Natuna Sea. Currently evaluating the Natuna D-Alpha block, KUFPEC aims to expand its international oil and gas portfolio. Indonesia seeks to stimulate exploration to boost its domestic industry despite falling production and rising demand. KUFPEC's efforts align with Indonesia's push to revive its oil and gas sector and enhance energy security.
【Latest Oil Policies】
The Bureau of Land Management offered minimal land for lease in the Arctic National Wildlife Refuge, aligning with the Biden administration's efforts to limit drilling in the area. The decision was criticized by local native communities who favor more development. The lease sale offering aims to balance development and preservation, but locals feel sidelined in the decision-making process.
【Industry News】
Germany's power margin is set to drop to its lowest this winter due to low wind speeds and cold weather, affecting electricity supply. The dip in wind generation has led to increased electricity prices and reliance on fossil fuels. Germany and Europe are drawing from natural gas storage at high rates, impacting industries with rising energy costs and uncertainty about gas supply.
【Company News】
BP is merging its offshore wind business with Japan's JERA, forming a joint venture with up to $5.8 billion in investments by 2030. The new company, JERA Nex bp, will focus on projects in Europe, Australia, and Japan, becoming a leading offshore wind developer. BP aims to maintain a capital-light model while boosting oil and gas resource development.
Equinor has exited Nigeria and Azerbaijan, selling assets for $2 billion. The move aligns with Equinor's strategy to streamline its international portfolio and focus investments where it can add the most value. These divestments support Equinor's goal of sustaining long-term production and profitability, enabling investment in competitive projects.
An explosion at an Eni fuel depot in Italy killed two people and injured nine, with three missing. The incident occurred during truck refueling, but storage tanks were unaffected. Emergency services managed to contain the fire, but the cause remains unclear. The explosion disrupted local traffic and prompted safety alerts for residents.
【Others】
Crude oil imports to China increased for the first time in seven months as lower prices boosted demand. The rise in imports was driven by price cuts from major suppliers like Saudi Arabia and Iraq. Despite the short-term increase, China's annual import rate remains lower, raising concerns about future demand amid economic stimulus efforts.
The U.S. national average gasoline price fell below $3 per gallon, benefiting motorists during the holiday season. The drop reflects oil price trends and forecasts of slowing U.S. oil production growth. The market remains uncertain, awaiting President-elect Trump's second term amidst Middle East tensions.
The Iraqi parliament ended this year's session without reaching an agreement with Kurdistan on the export of crude oil. The deadlock, caused by disagreements over compensation costs, led to the withdrawal of Kurdish parliamentarians and a delay in the final decision until the new session in January. The dispute over Kurdish oil exports has persisted since a 2023 ICC ruling favoring Iraq's authority in approving exports. International oil companies have suspended operations, awaiting clarity on regulatory changes. Most issues have been settled, but a final deal remains pending.
The IMF predicts Kuwait's economy will remain in recession due to ongoing OPEC oil production cuts, with a projected recovery over the medium term. Kuwait's GDP contracted due to reduced oil output, and its economy heavily relies on oil revenues, making it vulnerable to price swings. Despite past economic growth driven by high oil prices, Kuwait now faces challenges, including high inflation and a continued recession, contrasting with neighboring countries' efforts to diversify economically.
KUFPEC plans to bid for more oil and gas blocks offshore Indonesia, focusing on the Natuna Sea. Currently evaluating the Natuna D-Alpha block, KUFPEC aims to expand its international oil and gas portfolio. Indonesia seeks to stimulate exploration to boost its domestic industry despite falling production and rising demand. KUFPEC's efforts align with Indonesia's push to revive its oil and gas sector and enhance energy security.
【Latest Oil Policies】
The Bureau of Land Management offered minimal land for lease in the Arctic National Wildlife Refuge, aligning with the Biden administration's efforts to limit drilling in the area. The decision was criticized by local native communities who favor more development. The lease sale offering aims to balance development and preservation, but locals feel sidelined in the decision-making process.
【Industry News】
Germany's power margin is set to drop to its lowest this winter due to low wind speeds and cold weather, affecting electricity supply. The dip in wind generation has led to increased electricity prices and reliance on fossil fuels. Germany and Europe are drawing from natural gas storage at high rates, impacting industries with rising energy costs and uncertainty about gas supply.
【Company News】
BP is merging its offshore wind business with Japan's JERA, forming a joint venture with up to $5.8 billion in investments by 2030. The new company, JERA Nex bp, will focus on projects in Europe, Australia, and Japan, becoming a leading offshore wind developer. BP aims to maintain a capital-light model while boosting oil and gas resource development.
Equinor has exited Nigeria and Azerbaijan, selling assets for $2 billion. The move aligns with Equinor's strategy to streamline its international portfolio and focus investments where it can add the most value. These divestments support Equinor's goal of sustaining long-term production and profitability, enabling investment in competitive projects.
An explosion at an Eni fuel depot in Italy killed two people and injured nine, with three missing. The incident occurred during truck refueling, but storage tanks were unaffected. Emergency services managed to contain the fire, but the cause remains unclear. The explosion disrupted local traffic and prompted safety alerts for residents.
【Others】
Crude oil imports to China increased for the first time in seven months as lower prices boosted demand. The rise in imports was driven by price cuts from major suppliers like Saudi Arabia and Iraq. Despite the short-term increase, China's annual import rate remains lower, raising concerns about future demand amid economic stimulus efforts.
The U.S. national average gasoline price fell below $3 per gallon, benefiting motorists during the holiday season. The drop reflects oil price trends and forecasts of slowing U.S. oil production growth. The market remains uncertain, awaiting President-elect Trump's second term amidst Middle East tensions.