https://www.aa.com.tr/en/energy/oil/oil-prices-drop-slightly-over-lingering-demand-fears/31312
Saturday, December 19, 2020
Friday, December 4, 2020
Friday, November 27, 2020
Tuesday, November 24, 2020
Friday, November 20, 2020
Thursday, November 19, 2020
Wednesday, November 11, 2020
Tuesday, November 10, 2020
Monday, November 9, 2020
Monday, June 22, 2020
Monday, June 8, 2020
Friday, June 5, 2020
Saturday, May 23, 2020
Thursday, May 21, 2020
Wednesday, May 13, 2020
Monday, May 4, 2020
Venezuela's Gasoline Crisis
Venezuela Gasoline Shortages
In the last recent weeks, aside from the diverse problems facing the venezuelan oil industry, another critical issue with potential high social and political consequences for the Maduro government is the deep shortages of gasoline nationwide which is also impacting importantly the capital Caracas, a rare situation given the political weight of the city for the government and this crisis gets reinforced by the ramping of US and the EU sanctions against partners of PdVSA which have been exporting gasoline to the country coupled with the close to collapse of the refining sector unable to produce gasoline enough for domestic consumption altogether leading to a critical situation of gasoline supplies in Venezuela.
In this regard, and to add some context to the situation, the current acute gasoline shortage in Venezuela could well be the worst at least since the oil strike in 2002-2003 by PDVSA workers to push Chavez out of office, especially due to the tremendously overall critical situation in the oil industry from production, refining and shipping oil and gasoline caused by years of corruption and mismanagement of the industry under the Bolivarian Revolution and worsened under the Maduro administration.
Therefore, the root cause of this gasoline crisis is the destruction of the refining circuit of pdvsa which from being one of the largest in the world (processing around 1.5 mmbd) now it is down more than half of its past refining runs which was way before the recent targeted sanctions from Washington against pdvsa oil and gasoline exports and imports adding another critical element to the already ongoing collapse of the overall Venezuelan oil sector.
And knowing about the consequences of this gasoline crisis, the Maduro government with PDVSA authorities have been making attempts to restart 2 key refining units, El Palito with around 150 kbd of processing capacity and Amuay-Cardon, even allegedly bringing technical help and assistance from Iran, but without significant results and the crisis still unfolding and without the technical knowledge and capabilities to fully restart both refining hubs. In this sense, according to Jose Toro Hardy, former manager of PDVSA and an often quoted oil expert, he stated: “ El Palito refinery cant be repaired just adding patches and out of thin air, its very complex and its unit of catalytic cracking key to producing gasolines has not yet restarted”
Also,as another desperate move to try to import gasoline under the current situation, allegedly a tycoon often linked with the Maduro government, Wilmer Ruperti owner of a large shipping conglomerate, chartered 2 ships loaded with around 500.000 barrels of gasoline in order to taper down the current nationwide gasoline shortage already causing food prices spikes and shortages.
Therefore if this situation of shortages of gasoline in Caracas and in different cases in the rest of the country no gasoline at all continues the economy already in pain with an ongoing crash of the national currency, bolivar, against the dollar and the complete control of gas stations by the military forces and coupled with a collapse of the oil production in Venezuela this will certainly have significant consequences for the country and potentialsocial unrests, where there have been already diverse lootings and protests demanding gasoline and food all across Venezuela. On this Bloomberg reported: “Riots Erupt in Venezuela’s countryside over food and fuel scarcity. Dozens of Venezuelans clashed with police forces in the countryside of southern Bolivar state on Thursday, which was the latest of at least 500 protests registered in April as food and fuel become scarce in Venezuela”
Thursday, April 30, 2020
Wednesday, April 29, 2020
Some takes and thoughts about potential geopolitical implications of COVID19 pandemic
As geopolitical and geoeconomic consequences of the
COVID19 we might potentially assist to:
1.) Slowing of the pace of the OBOR strategy of China due to the growing backlash from diverse countries against Beijing as part of the blame game for the spread of the coronavirus and the lack of information.
2.) The downsizing and loss of relevance of the WHO and the imperative for its reorganisation and redesign and its change of leadership due to somewhat dubious performance by its director general on the dynamics of this pandemic since its beginning.
4.) Growing frictions within the EU and the consequence balance of power after this pandemic ends.
3.) Advance of diverse SWF especially from the Persian Gulf in terms of positioning and market shares based on their spending spree on the cheap recently, i.e Qatar, KSA.
Overall there could be a revival of the relevance of the power of states against the MNC's, diminishing intensity of the globalisation process, authoritarianism gaining pace against democracies and also growing social unrests as global recession deepens out of this pandemic.
5.) Resource nationalism on the rise especially regarding the oil industry as consequence of recent bankruptcies of companies in the US.
At the end of the day it will much depend on the willingness of the international community to learn to face new critical situations and tragedies like this pandemic in better coordination and cooperation based significantly on the help of societies and non governmental institutions reinforcing the overall dubious actions of states and governments trying to keep their images intact and reduce to the minimum degree possible their political capital and base especially effective at least so far in authoritarian states and governments, where transparency and clear information about this pandemic has been far from clear. And clearly this has been more than just a health and sanitary crisis. Its been a tough clash and confrontation between globalists and nationalists, a clash between top global players and corporations to impose their respective hidden agendas so far leaving behind thousands of deaths. The world is watching and certainly will remember this as this ends.
Thursday, April 23, 2020
Wednesday, March 18, 2020
Thursday, March 12, 2020
On Saudi Russia oil price standoff.
Oil price wars have happened in the past within the organisation OPEC back in the 80's having members like Saudi Arabia and Venezuela fighting over prices and market shares and also its been argued in many times that the former USSR fell because of a strategy from Saudi Arabia to drain the markets to crash prices.
Now the added element is a pandemic like the COVID19 which i dont think has joined any turbulence in oil markets especially with q protracted low demand, a long called recession for this year and a glut market of over production and reduced demand since long only coming from China and India while the US has been becoming relatively self reliant on its oil production.
Hence it will all depend on the willingness of the players like Russia, Saudi Arabia and the U.S. to calm the markets and stabilise the oil prices since in the end it will impact consumers as well as producers in all producing and exporting countries no matter the low prices of gasoline in consuming countries.
Then there is an unfolding prices discounts confrontation between KSA and Russia regarding cargoes to Asia and now to Europe testing the long term feasibility of exports of oil and gas from the U.S. Indeed turbulent times in oil markets.
Monday, February 24, 2020
Some motivations for a prolonged low oil prices environment
From the Corona virus to tensions between the U.S. and Iran so far, the year 2020 has been filled with uncertainties for the global oil market. A recent production cut by OPEC in conjunction with the Russia Federation has failed to impact prices and the outlook for the market remains bearish according to the opinion of diverse experts and that could end depending on the outcomes of an upcoming meeting of the organisation already clouded by uncertainties on the spread of coronavirus and its impact on global demand, which has been differently assessed and viewed by player such as Saudi Arabia and Russia.
In this regard, the price of Western Texas Intermediate stands at $55 down, representing a considerable crash of around 50 dollars compared to prices of $100 in 2014 and despite many geopolitical risks and the wishes of OPEC producers, overall global oil production has continued to grow this year and will likely continue to grow. Indeed the U.S. Energy Information Agency predicts that global oil production will rise from roughly 100 of barrels per day (bpd) to nearly 10.2 million bpd by the end of the year. https://www.eia.gov/outlooks/steo/report/global_oil.php.
Therefore in this logic, this oil glut has been driven by the continued growth of U.S. shale production. Indeed continuing production across the U.S. has helped soften the impact of a number of geopolitical risk factors including ongoing wars in Iraq and Libya as well as tension between Iran and the U.S.
The price could remain low for a long time because there’s more than enough production in global oil markets, but where the wild card remains China where the deadly Corona virus has already killed over 2,000 people and may have significant impact in the long term and where it’s important to stress that China surpassed the United States as the world’s largest energy importer in 2017 and many believe the current health crisis there could become an economic one with important consequences for its oil demand.
While OPEC continues with its cut deal with non OPEC producing nations especially led by Russia, overall global oil production has grown from around 2 millions of barrels per day (bpd) to over totalling over 11 millions bpd by the end of 2019. This has been driven by continued U.S. shale production.
In this regard, low oil prices will benefit oil-importing economies and their consumers especially China, India, and other fast developing economies with sustained increasing demand and that leverage on this landscape to grow its strategic reserves and in the long run reflected also in the prices of fuel and gasoline this including the case of the U.S, but remains to be determined the real impact on the demand for China amid the unfolding of the corona virus. About this. Alex Kimani in OilPrice.com states: “The China coronavirus outbreak and continued inventory builds in the US market have been depressing prices”
Regarding the dynamics of US shale oil production, in the case of the continuation of low oil prices, the growth of U.S.production is expected to slow down in 2020 due to the fall of crude oil prices. The currently suppressed price environment, which is not expected to disappear anytime soon, makes it more difficult for completion rate of oil wells to achieve previously expected recovery after completion rate of oil wells saw deep monthly declines in the last two months of 2019. On this, S&P Global Platts Oil reported “ total US oil and gas rig counts were down a net five last week to 825 amid continued low commodity prices and restrained capital outlays throughout domestic basins”.
Henceforth, its still uncertain what outlook will be for oil prices and which countries will be winners and losers out of this global quest for oil dominance and preponderance and market share, with a rise of the development of renewable resources and the use of EV all across the globe, with the traditional oil producing powers struggling to maintain their hegemony over the energy landscape
Tuesday, February 18, 2020
Globalisation and Power Shifts
The dynamics of globalisation have been a key influencer in the gradual power shifts of the global order, specifically in the period of study, after the end of the Cold War and the fall of the USSR in 1990 and all through 2015, a time lapse marked by fast paced technological advances in communications, finance, global financial turmoil, armed conflicts in countries such as Iraq, Libya, Syria, Afghanistan, the Arab Spring, the expansion of growth in the asian continent, especially China and India, and in general the gradual and sustained diffusion of power to other poles enhanced importantly by this globalisation process, and inserted in a mixed way in the theories studied in this module, such as that of the Imperial Overstretch, the Hegemonic Stability Theory and Long Cycle Theory, impacting importantly particularly the longstanding role of the U.S. as the sole superpower after the end of the Cold War in its confrontation against the former Soviet Union.
In this sense, and as with the fast diffusion of ideas, interactions and communications in diverse fields especially regarding the state of the global order across regions and continents, and the fast flow of money and the spread and globalisation of threats and problems, based on some sense of exhaustion of the concept of Pax Americana, the gradual rise of China experiencing important year on year rates of growth along with other countries in Asia in what was called the East Asian Miracle, the once unipolar order of the world unfolded in once with diverse poles of power contesting the weight and prominence of the U.S. after the end of the Cold War and the fall of the Soviet Union. Regarding the concept of Pax Americana:
“ It specifically denotes the United States’s post war military and economic position relative to other nations” (M4 U3 LSE & Get Smarter, 2018:4), which highlights the role and weight of the U.S in contrast with other countries and regions of the world.
Therefore, during this period, and mostly both as a challenge to the role and preeminence of the United States and the West and also as a consequence of the signs of imperial overstretch after different mistakes and quagmires experienced by Washington in past armed interventions in Iraq, Afghanistan, resulting in loss of human lives and high costs for the taxpayers in the U.S. resulting in a mounting antiwar sentiment and a loss of trust in the political system in the country, there were other countries such as China building its own strategy to assert its influence not only in Asia but in the rest of the world.
Based on this argument, China , leveraging on a significant rate of sustained growth in the last decade, market oriented reforms under a strong political control by the Communist Party and an aggressive expansion overseas of its state backed companies, went on decidedly to fill some voids being left by the U.S and the EU especially in regions such as Central Asia, the Pacific, Africa to design a geopolitical strategy through strong commercial methods such as the Belt and Road Initiative (BRI), the Asian Infrastructure and Investment Bank (AIIB), the Shanghai Cooperation Organisation (SCO) along with Russia. As Khana, 2019 writes:
“ In the past few years, China has surpassed the United States as the world’s largest economy (in PPP terms) and trading power. Asia’s major powers have maintained stability with one another despite their historical tensions. They have formed common institutions such as the Asian Development Bank, the East Asian Community, Regional Comprehensive Economic Partnership and the AIIB. A quarter century after the US won the Cold War and led the Asian order, it is now excluded from nearly all of these bodies”. This indicates how the position of the U.S. from a preeminence in Asia after the Cold War now shifted to one of predominance and influence of China specifically in Asia.
In conclusion, during the period of time from 1990 to 2015, it is clear that there has been a shift of the balance of power globally one caused by an exhaustion, mistakes and an overstretch of an empire which is the United States to other centres of power such as China, India, the EU, without this meaning that the U.S. has lost its relevance in the global system, still being the main financial centre and holding the main global currency such as the dollar and the largest military forces, meanwhile even if now China has become the main challenger and the other top relevant centre of power in the global shift in the making.
All this as we still will have to consider diverse domestic and regional geopolitical, economic and social challenges lying ahead of its intentions along with other poles such as the EU and India or Russia, as we are witnessing an ever growing interconnected and globalised world where, at the end of the day, unipolarity no longer will seem enough to tackle the most pressing issues impacting the world today and where, even the relevance and effectiveness of the long established blocs of cooperation and integration regional, international or continental, have been being constantly challenged with new ways of integration now backed and sponsored by the new emergent powers such as China, Russia, Turkey, Indonesia, etc, underscoring the new landscape of power today.
Overall, the globalisation has been a key player in this dynamic of power shifting and diffusion from traditional poles to new ones, to the losing of relevance of regional and international blocs, and as the whole concept of power wielding has been changing and evolving importantly and fast, and where at the end, no single power has the strength and capabilities to deal with the diverse problems of the world and where interconnectedness, common actions of countries in multilateral mechanisms will continue to be the path despite continuing challenges and responses to the globalisation process.
Thursday, February 13, 2020
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