Opec deal could fall apart at the seams as iraq revolts _ oilprice. com

While historically the major conflict within OPEC in recent years had been between Iran, whose oil production had been mothballed since 2013 as a result of the US embargo and which is now eager to regain its roughly 4mmbpd in production, and Saudi Arabia, which successfully picked up market share from Iran, a new source of contention within OPEC emerged last night when Iraq disagreed with OPEC’s method of production estimates as reported last night.

And now it appears that Iraq – which in August produced between 4.4mmbpd and 4.6mmbpd depending on whose estimates are used, will not be easily placated. Electricity song lyrics As Reuters details, Iraq, which overtook Iran as the group’s second-largest producer several years ago but kept its OPEC agenda fairly low-profile, on Wednesday finally made its presence felt. Electricity was invented “What it did, however, pleased neither Saudi Arabia nor Iran.”

Iraq’s new oil minister Jabar Ali al-Luaibi told his Saudi and Iranian counterparts, Khalid al-Falih and Bijan Zanganeh, in a closed-door gathering in Algiers that “it was an OPEC meeting for all ministers”, a source briefed on the talks said. Electricity nightcore Luaibi, it turns out, is also the key OPEC member who “didn’t like the idea of re-establishing OPEC’s output ceiling at 32.5 million barrels per day (bpd), according to OPEC sources.”

Continuing the point made first yesterday, Luaibi told the meeting that the new 32.5 mmbpd ceiling was no good for Baghdad as OPEC had underestimated Iraq’s production, which has soared in recent years.

Confusion followed, according to Reuters sources, and after a debate OPEC chose to impose a ceiling in the range of 32.5-33.0 million bpd – a decision dismissed by many analysts as weak and non-binding. Electricity kwh cost uk OPEC’s current output stands at 33.24 million bpd.

As ministers including Falih and Zanganeh emerged smiling from the room and praised OPEC’s first output-limiting deal since 2008, Luaibi called a separate briefing to complain about OPEC’s estimates of Iraqi output.

“These figures do not represent our actual production,” he told reporters. Electricity transmission vs distribution If by November estimates do not change, “then we say we cannot accept this, and we will ask for alternatives”. Orlando electricity providers Luaibi went even further and asked a reporter from Argus Media – whose data OPEC uses among other sources to compile estimates of countries’ production – to disclose from where Argus’ estimates were coming.

“Your sources are not acceptable. Electricity jewels And if there is deviation from the government, then Argus will not work in Iraq,” Luaibi told the Argus reporter. Electricity vs gas heating costs Related: What Do Driverless Cars Really Mean For Transportation

What Luabi’s was outraged by was the delta shown in the table below, which reveals a nearly 300 barrel difference between Iraq’s self-reported oil production of 4.638mmbpd and that estiamted by OPEC which amounts to just 4.354mmbpd. Gas city indiana car show As we said last night, just this one difference alone is enough to eliminate the lower end of the proposed OPEC production cut of 250kbpd. Electricity billy elliot karaoke If one adds other member states such as Kuwait, UAE and Venezuela, the difference between the two sets of numbers rises to nearly 1 million barrels, or well above the proposed upper bound of the production “cut” agreed upon in Algiers.

In other words, unless Iraq (and thus, Kuwait, UAE and Venezuela all relent) to using OPEC production estimates, there will be no production cut unless Saudi Arabia is willing to eat the difference.

And while the market appears unbothered by the details, between now and November, when OPEC meets formally in Vienna, the group will have to overcome huge obstacles to agree a binding deal. Gas hydrates wiki Related: How The Oil Price Slump Affected The Ultra-Rich

Key among them will be to establish at least some semblance of country quotas to make sure members limit global oversupply, which has helped halve prices since 2014 to below $50 a barrel. Gas meter car Iran, which has been exempt from the production cut (explaining why it complied with the terms of the deal) insists it wants to raise output to around 4 million bpd as it emerges from European sanctions. K electric company duplicate bill The Saudis have proposed that Iran freeze production at 3.7 million bpd.

Riyadh is offering to cut its own production to 10.2 million bpd from 10.7 million but most analysts argue it will fall to such a level anyway as the summer heat eases, reducing the need for cooling. Gas jeans usa It would have to cut much more if the “outlier” nations demand that their own production estimates are used.

While for some yesterday’s deal is confirmation that the Saudi strategy implemented in November 2014 has been a failure, such as Michael Wittner, head of oil research at Societe Generale, who said that the decision shows Saudi Arabia is turning its back on letting the market manage supply, it remains to be seen what if any actual production cut will actually be reached. Harry mileaf electricity 1 7 pdf For now, OPEC has achieved what it wanted: a spike in oil for the next two months. E sampark electricity bill payment When the time comes to dealing with the consequences of another disappointed market reaction once OPEC reveals no final deal in Vienna in November, well at least OPEC will have sold a few billion barrels at far higher prices in the interim.