World Oil Supply: Shaping Realities
World Oil Supply: Shaping Realities A talk for the Society of Petroleum Engineers by Daniel Gerber and Edgar Jones
Petro-Logistics S.A.
Saudi Arabia and OPEC Call on Production
Non-OPEC Production + Call-on-OPEC = Demand Call on OPEC & Call on Saudi Part Ways, At Times million b/d
Call on OPEC (left)
33
Call on Saudi (right)
million b/d
32 31 30 29 28 27 26
Weak oil demand offset by outages in Iraq, Nigeria, Venezuela
Saudi Call reacts to ebb and flow of Iran/Libya supply
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
CIBC Commodities Strategy, IEA, Petro-Logistics SA, govn't sources
Saudi Surplus/Deficit Versus Observed Stock Change million b/d
11.0
2.0
10.5
1.5
10.0
1.0
9.5
0.5
9.0
0.0
8.5
-0.5
8.0
-1.0
7.5
-1.5
7.0
-2.0
Obsrvd Chg. In Commerical Stocks(OECD+China+Saudi)
SPR Release
Jan-11
Jul-11
Saudi Production Minus Saudi Call (3-mo. rolling avg)
Jan-12
Jul-12
Jan-13
CIBC Commodities Strategy, IEA, Petro-Logistics SA, gov'nt sources
Petro-Logistics SA
Jul-13
Supply Outages – Highest in Recent History Unplanned Oil Supply Outages Highest in Recent History kbd
3,500 3,000
OPEC Total
Non-OPEC Total
2,500 2,000 1,500 1,000 500 0
Dec-10
Jun-11
Dec-11
Jun-12
CIBC Commodities Strategy, EIA, Petro-Logistics SA
Petro-Logistics SA
Dec-12
Jun-13
Dec-13
Iran Overview • Recent US Sanctions – Cutting Iran out of Banking System • EU Sanctions – Prohibit the Import, Financing and Transportation of Iranian Oil • Impact of Sanctions on Exports • Suspension of Certain Sanctions
Petro-Logistics SA
Iranian Deliveries to Europe & Turkey ‘000 b/d 800 700 600 500 400 300 200 100 0
2012
2011
2 per. Mov. Avg. (2012)
Petro-Logistics SA
Iranian Deliveries to South Korea ‘000 b/d 300 250 200 150 100 50 0
2012
2011
2 per. Mov. Avg. (2012)
Petro-Logistics SA
Japanese Liftings of Iranian Crude Oil ‘000 b/d 350 300 250 200 150 100 50 0
2012
2011
2 per. Mov. Avg. (2012)
Petro-Logistics SA
Indian Liftings of Iranian Crude Oil ‘000 b/d 600 500 400 300 200 100 0
2012
2011
2 per. Mov. Avg. (2012)
Petro-Logistics SA
Chinese Liftings of Iranian Crude Oil ‘000 b/d 600 500 400 300 200 100 0
2012
2011
Petro-Logistics SA
Petro-Logistics SA
Iran – Crude Oil Exports by Grade 000 b/d 2,500
Bahregan
2,000
Nowruz Soroosh
1,500
Lavan Blend Sirri
1,000
Faroozan Iranian Heavy
500
0 Jan-10
Iranian Light
Jan-11
Jan-12
Jan-13
Jan-14 Petro-Logistics SA
Petro-Logistics SA
Iran – Crude Oil Production Capacity Mb/d
4.2 4 3.8 3.6 3.4 3.2 3 2005
2006
2007
2008
Petro-Logistics SA
2009
2010
2011
Libya – Crude Oil Production million b/d 1.8 1.6 1.4
Actuals
Forecast
1.2 1 0.8 0.6 0.4 0.2 0 Jan-11
Jul-11
Jan-12
Jul-12
Petro-Logistics SA
Jan-13
Jul-13
Jan-14
Iraqi – Crude Oil Production million b/d 3.5 3.0 2.5 2.0 Southern Exports 1.5 1.0 0.5
Northern Exports
0.0 Jan-11
Jul-11
Jan-12
Jul-12
Petro-Logistics S.A.
Jan-13
Jul-13
Factors Influencing Saudi Arabian Production in 2014 Upward Pressure • Breaking down of negotiations with Iran • Continued blockades in Libya • Spill-over from extremist groups in Iraq • Further supply disruptions in Nigeria • Non-OPEC Supply Outages
Downward Pressure • Iraqi export & storage infrastructure completion • Long-term agreements with militias in Libya • Weakening of global oil demand growth • Recovery in Nigeria • Slim but possible chance of Iranian crude returning to the market
Petro-Logistics SA
Call on Saudi Arabia in 2014 Call on OPEC & Call on Saudi million b/d
million b/d
Call on OPEC (left)
33
Call on Saudi (right)
11.0 10.5
32
10.0
31
9.5
30
9.0 29 Weak oil demand offset by outages in Iraq, Nigeria, Venezuela
28 27 26
Saudi Call reacts to ebb and flow of Iran/Libya 8.5 supply 8.0 7.5
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
CIBC Commodities Strategy, IEA, Petro-Logistics SA, govn't sources
Petro-Logistics S.A.
'10
'11
'12
'13
'14
'15
7.0
US UNCONVENTIONAL BROUGHT A NEW PARADIGM TO THE MARKET.....
EF
Bakken
-The unconventional oil production boom in the US change the domestic dynamics -It also had a major impact on the Atlantic basin light crude markets -Affected primarily the West African grades going to the US, around 400 MBD reduction 2014-02-03
17
Source: EIA DOE
WESTERN CANADIAN PRODUCTION HAS CHANGED MIDCONTINTENT DYNAMICS AND WILL EVENTUALLY CHANGE PACIFIC AND US GOM TRADE.....
2014-02-03
18
Classification: Source EIA DOE
HEAVY OIL IS AN EXAMPLE OF HOW DYNAMICS ARE CHANGING
2014-02-03
19
Classification: Internal
ASIA IS HAS BECOME THE NEW GRAVITY CENTRE... Main Heavy Crude Oil Markets Top Tier 2012 Imports 4,500 4,000 3,500 3,000 ‘000 b/d
2,500 2,000 1,500 1,000 500 0 USA
Saudi Arabia Venezuela 2014-02-03
Mexico Neutral Zone
Asia
Brazil Canada 20
Other
West Africa Colombia
Iran
Source: Oil tanker data, DOE and Government agencies Classification: Internal
Thank you Sources:
Petro-Logistics S.A.
Petro-Logistics SA CIBC Commodities Strategy OPEC Secretariat International Energy Agency
Petro-Logistics S.A.
Saudi Arabia and OPEC Call on Production
Non-OPEC Production + Call-on-OPEC = Demand Call on OPEC & Call on Saudi Part Ways, At Times million b/d
Call on OPEC (left)
33
Call on Saudi (right)
million b/d
32 31 30 29 28 27 26
Weak oil demand offset by outages in Iraq, Nigeria, Venezuela
Saudi Call reacts to ebb and flow of Iran/Libya supply
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
CIBC Commodities Strategy, IEA, Petro-Logistics SA, govn't sources
Saudi Surplus/Deficit Versus Observed Stock Change million b/d
11.0
2.0
10.5
1.5
10.0
1.0
9.5
0.5
9.0
0.0
8.5
-0.5
8.0
-1.0
7.5
-1.5
7.0
-2.0
Obsrvd Chg. In Commerical Stocks(OECD+China+Saudi)
SPR Release
Jan-11
Jul-11
Saudi Production Minus Saudi Call (3-mo. rolling avg)
Jan-12
Jul-12
Jan-13
CIBC Commodities Strategy, IEA, Petro-Logistics SA, gov'nt sources
Petro-Logistics SA
Jul-13
Supply Outages – Highest in Recent History Unplanned Oil Supply Outages Highest in Recent History kbd
3,500 3,000
OPEC Total
Non-OPEC Total
2,500 2,000 1,500 1,000 500 0
Dec-10
Jun-11
Dec-11
Jun-12
CIBC Commodities Strategy, EIA, Petro-Logistics SA
Petro-Logistics SA
Dec-12
Jun-13
Dec-13
Iran Overview • Recent US Sanctions – Cutting Iran out of Banking System • EU Sanctions – Prohibit the Import, Financing and Transportation of Iranian Oil • Impact of Sanctions on Exports • Suspension of Certain Sanctions
Petro-Logistics SA
Iranian Deliveries to Europe & Turkey ‘000 b/d 800 700 600 500 400 300 200 100 0
2012
2011
2 per. Mov. Avg. (2012)
Petro-Logistics SA
Iranian Deliveries to South Korea ‘000 b/d 300 250 200 150 100 50 0
2012
2011
2 per. Mov. Avg. (2012)
Petro-Logistics SA
Japanese Liftings of Iranian Crude Oil ‘000 b/d 350 300 250 200 150 100 50 0
2012
2011
2 per. Mov. Avg. (2012)
Petro-Logistics SA
Indian Liftings of Iranian Crude Oil ‘000 b/d 600 500 400 300 200 100 0
2012
2011
2 per. Mov. Avg. (2012)
Petro-Logistics SA
Chinese Liftings of Iranian Crude Oil ‘000 b/d 600 500 400 300 200 100 0
2012
2011
Petro-Logistics SA
Petro-Logistics SA
Iran – Crude Oil Exports by Grade 000 b/d 2,500
Bahregan
2,000
Nowruz Soroosh
1,500
Lavan Blend Sirri
1,000
Faroozan Iranian Heavy
500
0 Jan-10
Iranian Light
Jan-11
Jan-12
Jan-13
Jan-14 Petro-Logistics SA
Petro-Logistics SA
Iran – Crude Oil Production Capacity Mb/d
4.2 4 3.8 3.6 3.4 3.2 3 2005
2006
2007
2008
Petro-Logistics SA
2009
2010
2011
Libya – Crude Oil Production million b/d 1.8 1.6 1.4
Actuals
Forecast
1.2 1 0.8 0.6 0.4 0.2 0 Jan-11
Jul-11
Jan-12
Jul-12
Petro-Logistics SA
Jan-13
Jul-13
Jan-14
Iraqi – Crude Oil Production million b/d 3.5 3.0 2.5 2.0 Southern Exports 1.5 1.0 0.5
Northern Exports
0.0 Jan-11
Jul-11
Jan-12
Jul-12
Petro-Logistics S.A.
Jan-13
Jul-13
Factors Influencing Saudi Arabian Production in 2014 Upward Pressure • Breaking down of negotiations with Iran • Continued blockades in Libya • Spill-over from extremist groups in Iraq • Further supply disruptions in Nigeria • Non-OPEC Supply Outages
Downward Pressure • Iraqi export & storage infrastructure completion • Long-term agreements with militias in Libya • Weakening of global oil demand growth • Recovery in Nigeria • Slim but possible chance of Iranian crude returning to the market
Petro-Logistics SA
Call on Saudi Arabia in 2014 Call on OPEC & Call on Saudi million b/d
million b/d
Call on OPEC (left)
33
Call on Saudi (right)
11.0 10.5
32
10.0
31
9.5
30
9.0 29 Weak oil demand offset by outages in Iraq, Nigeria, Venezuela
28 27 26
Saudi Call reacts to ebb and flow of Iran/Libya 8.5 supply 8.0 7.5
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
CIBC Commodities Strategy, IEA, Petro-Logistics SA, govn't sources
Petro-Logistics S.A.
'10
'11
'12
'13
'14
'15
7.0
US UNCONVENTIONAL BROUGHT A NEW PARADIGM TO THE MARKET.....
EF
Bakken
-The unconventional oil production boom in the US change the domestic dynamics -It also had a major impact on the Atlantic basin light crude markets -Affected primarily the West African grades going to the US, around 400 MBD reduction 2014-02-03
17
Source: EIA DOE
WESTERN CANADIAN PRODUCTION HAS CHANGED MIDCONTINTENT DYNAMICS AND WILL EVENTUALLY CHANGE PACIFIC AND US GOM TRADE.....
2014-02-03
18
Classification: Source EIA DOE
HEAVY OIL IS AN EXAMPLE OF HOW DYNAMICS ARE CHANGING
2014-02-03
19
Classification: Internal
ASIA IS HAS BECOME THE NEW GRAVITY CENTRE... Main Heavy Crude Oil Markets Top Tier 2012 Imports 4,500 4,000 3,500 3,000 ‘000 b/d
2,500 2,000 1,500 1,000 500 0 USA
Saudi Arabia Venezuela 2014-02-03
Mexico Neutral Zone
Asia
Brazil Canada 20
Other
West Africa Colombia
Iran
Source: Oil tanker data, DOE and Government agencies Classification: Internal
Thank you Sources:
Petro-Logistics S.A.
Petro-Logistics SA CIBC Commodities Strategy OPEC Secretariat International Energy Agency
