industryterm:oil imports

  • Ukraine: why the EU should block Russian oil imports, by Andreas Umland

    The recent debate about possible western arms deliveries to Ukraine reveals the insecurities for EU and US leaders of western military involvement in the Russian-Ukrainian conflict — even just through support with technology, logistics and training.

    But surprisingly, the main non-military instrument of pressure on Russia still remains beneath the radar of public debates on the war in the West. That measure could be a partial blocking of western energy imports from Russia — and, above all, a significant cut in the EU’s monthly purchases of Russian crude oil.

  • How Crude Oil’s Global Collapse Unfolded

    Since the 1970s, Nigeria has sent a steady stream of high-quality crude oil to North American refineries. As recently as 2010, tankers delivered a million barrels a day.

    Then came the U.S. energy boom. By July of this year, oil imports from Nigeria had fallen to zero.

    Displaced by surging U.S. oil production, millions of barrels of Nigerian crude now head to India, Indonesia and China. But Middle Eastern nations are trying to entice the same buyers. This has set up a battle for market share that could reshape the Organization of the Petroleum Exporting Countries and fundamentally change the global market for oil.

    The sudden plunge in global crude oil prices from over $100 a barrel to under $65 has been portrayed as a showdown between Saudi Arabia and the U.S., two of the world’s biggest oil producers. But the reality is more complex, involving Libyan rebels and Indonesian cabdrivers as well as Texas roughnecks and Middle Eastern oil ministers. It reflects both the surging supply of crude and the crumbling demand for oil.

    And the oil-price free fall may not end soon. Bank of America Merrill Lynch says U.S. oil prices, which closed below $60 a barrel Thursday for the first time in years, could drop to $50 in 2015


    For a long time, it seemed like the world’s growing appetite for oil would soak up all the displaced crude. By 2011 prices began to hover between $90 and $100 a barrel and mostly stayed in that range.

    But earlier this year, another trend began to come into focus, catching Wall Street energy analysts and other market watchers by surprise. In March, many analysts predicted global demand for crude oil would grow by 1.4 million barrels a day in 2014, to 92.7 million barrels a day.

    That prediction proved wildly optimistic.


    Rising supply and falling demand both put downward pressure on prices. Throughout the summer, however, fears of violence in Iraq kept oil prices high. Traders worried Islamic State fighters could cut Iraq’s oil output.

    Then two events tipped the market. In late June, The Wall Street Journal reported the U.S. government had given permission for the first exports of U.S. oil in a generation. While the ruling was limited in scope, the market saw it as the first crack in a long-standing ban on crude exports. Not only was the U.S. importing fewer barrels of oil, it could soon begin exporting some also. This news jolted oil markets; prices began to edge down from their summer peaks.

    On July 1, Libyan rebels agreed to open Es Sider and Ras Lanuf, two key oil export terminals that had been closed for a year. Libyan oil cargoes sailed across the Mediterranean Sea into Europe. Already displaced from the U.S. Gulf Coast and eastern Canada, Nigerian oil was soon replaced in Europe, too.

    Increasingly, shipments of Nigerian crude headed toward China.


    Saudi Arabia didn’t want Nigeria to develop long-term relationships with refinery buyers in Asia. In late September, the kingdom decided to shore up its hold on them by, effectively, holding a sale. The Saudis cut their official crude price in Asia by $1 a barrel; within a week, Iran and Kuwait did the same.

    Two weeks later, the IEA again lowered its full-year projection of demand growth by 200,000 barrels a day to a meager annual increase of 700,000 barrels, nearly half of what it expected at the beginning of the year. Oil prices fell nearly $4 a barrel on the news.

    At this point, the oil market appeared to be in free fall. Of the 23 trading days in October, the price of crude fell by more than $1 on eight days. It rose by $1 on one day.

    Traders’ attention turned to OPEC, which has traditionally played the role of market stabilizer by cutting production when prices fall and raising production was prices rise. Many OPEC members, reliant on the cash oil brings in to pay for generous social programs, didn’t want to cut.

    Saudi Arabia’s powerful oil minister, Ali al-Naimi, was silent for weeks. The country had been burned in the past when it cut its oil output, only to see other countries continue to pump—and steal its customers.

    And it was already feeling competition, says Abudi Zein, chief operating officer of ClipperData, a New York firm that tracks global crude movement. Colombia, which historically has sent most of its oil to the U.S., is finding its biggest buyer this year is China, a critical market for OPEC, he said.

    “For the Saudis, Asia is their growth market,” Mr. Zein says. “The Nigerians and Colombians are being kicked out of their natural markets in North America. Saudi had to do something.”

    At its regular meeting in Vienna in late November, the cartel kept production unchanged. U.S. and European oil prices fell another $7 per barrel.

    On Wednesday, Mr. al-Naimi, the Saudi Arabian oil minister, was asked whether OPEC would soon act to cut exports. “Why should we cut production?” he asked. “Why?”

  • Beijing’s westward pivot will make the Gulf a critical ally

    Where does the Arabian Gulf fit in China’s emerging new diplomacy? Based on the recent flurry of diplomatic activities involving the Gulf and China (Chinese premier Wen Jiabao visited three Gulf states in January last year and the speaker of the Federal National Council of the UAE, Mohammed Al Murr, met last week in Beijing the head of the Chinese parliament), the Gulf remains an essential part of China’s resource-focused diplomacy.
    China, already the world’s largest importer of crude oil, depends on the Gulf for 44 per cent of its oil imports.

    Given the worsening air-pollution in China, Beijing must also find the Gulf’s abundant natural gas supply attractive. To be sure, China has massive deposits of shale gas, but the geological challenges, lack of infrastructure, scarcity of water and uncertain property rights make it unlikely that China will start tapping into its shale gas as a source of energy any time soon.
    In the meantime, any sensible Chinese official in Beijing knows that he must get his hands on as much clean natural gas as possible. Compared with Russian gas, which will not start shipping until 2018, gas from the Gulf can be imported immediately.

    To some, Beijing may even have a long-term military design on the Arabian Gulf. With its growing military might, China will naturally want to protect its own energy sources. However, it is unlikely that Beijing would risk confronting the Americans by deploying its navy to the Gulf (at the moment, it simply does not have a blue water navy capable of being deployed far away from China). The Chinese are experienced free-riders. As long as the United States is keeping the international shipping lanes open for them, China needs not waste its own money duplicating the task.

  • Obama reassures Israel, while taking a step back from the Middle East - Obama visits Israel Israel News | Haaretz

    The region is still important to the United States, but less so than it was a decade or two ago; meanwhile, Israel’s dependence on the U.S. continues to grow.

    The visit comes at a time when the United States is withdrawing from its deep involvement in the Middle East, amid the growing fear of Israel and other regional allies that America will abandon them to radical Islamic forces.

    America entered the region with all its might, as its dependence on oil imports increased. But following the development of new oil and natural gas production methods in North America, the United States is gradually freeing itself of reliance on external energy sources.

    In a few years it will become an oil exporter. The Middle East is still important, but it is less vital than it was a decade or two ago.

    America has tired of the wars in the Middle East that consumed its resources and robbed its attention in the past decade, without resulting in a decisive victory. Obama has already pulled the U.S. Army out of Iraq, and will take it out of Afghanistan this term. The old regional order, with its reliance on secular military dictatorships and pro-American monarchies, has collapsed under the revolutions of the Arab Spring and the strengthening of the region’s Islamic movements.

    The United States has discovered it cannot control these upheavals, and it doesn’t want to get involved in civil wars like the one in Syria. It prefers to stand by and see who wins.

    Under these circumstances, pressure on Israel will increase. Until now, Israel has benefited from American safeguards in the region that have bolstered its deterrence capability, helped to safeguard the peace accords with Egypt and Jordan, and protected it from distant regional powers like Iran and Iraq. And when Israel is worried, or when it feels that its security concerns are not being given the attention they deserve in Washington, it has a tendency to take risks and use military force to perpetuate the strategic status quo.

    Obama is projecting very different images domestically and overseas: He is trying to draw his country inward while telling his allies in the Middle East that, despite what they may be witnessing, the United States is just as committed to them as ever.

    This attitude is reminiscent of Richard Nixon. In 1969 Nixon laid out the American foreign policy strategy that came to be known as the Guam Doctrine or the Nixon Doctrine, which made it clear that Washington would no longer undertake the defense of the free nations of the world. That was the first step toward an eventual American withdrawal from Vietnam, and Nixon, who had to sell the idea to his allies in Asia, assured them that everything would be fine.

    The best way for Israel to ensure that the Americans remain committed is to threaten some unilateral action that would drag in the United States. That’s exactly what Netanyahu did Wednesday in his public appearances with Obama. He kept on talking about Israel’s right to defend itself. In rough translation from diplo-speak, that means, “If you don’t take action to get Iran to thwart its nuclear project, we will be forced to act alone − and you’ll suffer the consequences as much as we will.”

  • South Korea to resume Iranian oil imports in September

    South Korean refiners plan to resume buying crude from Iran in September after a two month hiatus due to a European Union embargo that made shipping the oil difficult, government and refining sources said on Wednesday.

    South Korean refiners have, like their Chinese counterparts, asked Iran to deliver crude on Iranian tankers, government and industry sources said.

    This shifts the responsibility to Iran for insurance, sidestepping a ban in the EU on insurers from covering Iranian shipments.

  • To Survive, Some Biofuels Companies Give Up on Biofuels - Technology Review

    Article fort intéressant, qui montre que la « science des promesses » n’arrivant pas à produire des résultats, on est prêt à déstabiliser des marchés essentiels (l’alimentation) pour rentabiliser des investissements perdus.

    As the difficulty of producing cellulosic biofuels cheaply becomes apparent, a growing number of advanced-biofuels companies are finding it necessary to take creative approaches to their business, even though that means abandoning some of their green credentials, at least temporarily, and focusing on markets that won’t have a major impact on oil imports. This is hardly the outcome the government hoped for when it announced cellulosic-biofuels mandates, R&D funding, and other incentives in recent years.

    Mais attention, toujours de façon éthique :

    “Suppose we’re in a world where we’re making huge quantities of fuels and displacing petroleum. We could come to the point where we’re running in a conflict of food versus fuel,” he says. “We should use only excess carbohydrates to make fuels.”