Caspian Sea nations to sign landmark deal

The leaders of the five states bordering the Caspian Sea meet in Kazakhstan on Sunday to sign a landmark deal on the inland sea which boasts a wealth of oil and gas reserves and sturgeon.

Talks in the port city of Aktau should help ease tensions in a militarised region where the legal limbo has scuppered lucrative projects and strained relations among nations along the Caspian’s 7,000-kilometre (4,350-mile) shoreline.

The Kremlin said the convention keeps most of the sea in shared use but divides up the seabed and underground resources.

It does not allow military bases from any other countries to be sited on the Caspian.

‘Once a frontier oil province’

Sunday’s summit is the fifth of its kind since 2002 but there have been more than 50 lower-level meetings since the Soviet breakup spawned four new countries on the shores of the Caspian.

The deal will settle a long-lasting dispute on whether the Caspian is a sea or a lake—which means it falls under different international laws.

The draft agreement, briefly made public on a Russian government portal in June, refers to the Caspian as a sea but the provisions give it “a special legal status”, Russian deputy foreign minister Grigory Karasin told Kommersant daily.

It is the Caspian’s vast hydrocarbon reserves—estimated at around 50 billion barrels of oil and just under 300 trillion cubic feet (8.4 trillion cubic metres) of natural gas in proved and probable reserves—that have made a deal both vital and complex to achieve.

“Disputes arose when the Caspian was a frontier oil province,” said John Roberts, a non-resident senior fellow at Atlantic Council’s Eurasia Center, while it is “now well established, with major fields approaching peak… production.”

‘Expand cooperation’

Any deal will “expand the field for multilateral cooperation” between the five states, said Ilham Shaban, who heads the Caspian Barrel thinktank.

But some are likely to view it as more of a breakthrough than others.

Energy-rich but isolated Turkmenistan is particularly excited and President Gurganguly Berdymukahmedov has called for annual Caspian Sea Day celebrations from Sunday onwards.

Turkmenistan could benefit from a concession allowing the construction of underwater pipelines, which were previously blocked by the other states.

Nevertheless, analysts caution that Turkmenistan’s long-held plan to send gas through a trans-Caspian pipeline to markets in Europe via Azerbaijan is not necessarily closer to becoming reality.

The plan was previously opposed by Russia and Iran, which could still attempt to block the pipeline—valued at up to $5 billion—on environmental grounds.

“A deal in Aktau is not a legal prerequisite for the construction of the Trans-Caspian Pipeline,” said Kate Mallinson, Associate Fellow for the Russia and Eurasia Programme at Chatham House.

“Neither will a major transport corridor to export Turkmen gas to Europe emerge overnight.”

Kudos and caviar

As previous exclusive arbiters of Caspian agreements, Russia and Iran could be seen as the new deal’s biggest losers.

But while Moscow has ceded ground on underwater pipelines “it gains political kudos for breaking a log-jam,” enhancing its image as diplomatic dealmaker, said Roberts of the Eurasia Center.

Russia will welcome the clause barring third countries from having military bases on the Caspian, underscoring its military dominance there, said Shaban of Caspian Barrel.

Iran gets the smallest share of the Caspian spoils under the new deal, but could take advantage of new legal clarity to engage in joint hydrocarbons ventures with Azerbaijan.

In the past Tehran has resorted to hostile naval manoeuvres to defend its claims to contested territory.

Beyond military and economic questions, the agreement also offers hope for the Caspian’s ecological diversity.

Reportedly depleted stocks of the beluga sturgeon, whose eggs are prized globally as caviar, may now grow thanks to “a clear common regime for the waters of the Central Caspian,” Roberts said.

The deal could result “not only in stricter quotas for sturgeon fishing, but in stricter enforcement of these quotas,” he added.



Pétrole : Arabie Saoudite et Russie envisagent une hausse de production au 3e trimestre

AFP
L’Arabie saoudite et la Russie, qui s’entendent depuis 2017 avec d’autres gros producteurs de pétrole pour limiter l’offre, ont jugé possible
vendredi une hausse de la production à partir du troisième trimestre alors que les prix sont remontés récemment à leurs plus hauts niveaux
depuis 2014.

Cité par les agences russes lors d’un forum économique à Saint-Pétersbourg, le ministre saoudien de l’Energie Khaled al-Faleh a jugé que les
pays producteurs auront “bientôt la possibilité de libérer l’offre”. “Comme nous l’avons toujours dit, le retour du pétrole sur le marché doit
se faire progressivement. Nous ne le ferons pas rapidement. Cela interviendra probablement au deuxième semestre de cette année”, a-t-il
ajouté. “Si nous arrivons à l’idée commune qu’il est indispensable d’assouplir le niveau (de production, ndlr), cela doit se faire à partir du
troisième trimestre”, a estimé de son côté le ministre russe Alexandre Novak.

Après ces propos, les prix du pétrole reculaient d’environ 2% sur les marchés.
Les deux hommes se sont entretenus jeudi soir pour discuter du sujet alors que l’Opep et ses dix partenaires, dont la Russie, doivent se
réunir fin juin à Vienne.

Les 14 membres de l’Opep et dix autres producteurs de pétrole, Russie en tête, ont conclu fin 2016 un accord pour baisser le niveau de
production de 1,8 million de barils par jour afin de réduire l’excédent d’offre de brut sur le marché et soutenir les prix.
L’accord de limitation — qui court jusqu’à la fin 2018 — a permis de réduire l’abondance de l’offre et de pousser les prix vers le haut, le baril
remontant autour de 80 dollars contre 30 dollars en janvier 2016.



Le pétrole chute, Ryad et Moscou semblent prêts à augmenter leur production

NYC/Cours de clôture: Les cours du pétrole ont lourdement chuté vendredi à New York et Londres alors que l’Arabie saoudite et son allié russe ont estimé “probable” un assouplissement des limitations de la production de brut.
Le baril de Brent de la mer du Nord pour livraison en juillet a terminé à 76,44 dollars sur l’Intercontinental Exchange (ICE) de Londres, en baisse de 2,35 dollars par rapport à la clôture de jeudi.

Sur le New York Mercantile Exchange (Nymex), le baril de “light sweet crude” (WTIWTI Le West Texas Intermediate (WTI), aussi appelé Texas Light Sweet, est une variation de pétrole brut faisant office de standard dans la fixation du cours du brut et comme matière première pour les contrats à terme du pétrole auprès du Nymex (New York Mercantile Exchange), la bourse spécialisée dans l’énergie.) pour la même échéance a lâché 2,83 dollars à 67,88 dollars.

Face à la hausse marquée des prix ces derniers mois, l’Organisation des pays exportateurs de pétrole (OPEP) et ses partenaires pourraient assouplir leur accord de limitation de la production, ce qui a pesé sur les prix vendredi.

Cité par les agences russes lors d’un forum économique à Saint-Pétersbourg, le ministre saoudien de l’Energie Khaled al-Faleh a jugé que les pays producteurs auront “bientôt la possibilité de libérer l’offre”.

“Comme nous l’avons toujours dit, le retour du pétrole sur le marché doit se faire progressivement. Nous ne le ferons pas rapidement. Cela interviendra probablement au second semestre de cette année”, a-t-il ajouté.

“Si nous arrivons à l’idée commune qu’il est indispensable d’assouplir le niveau (de production, ndlr), cela doit se faire à partir du troisième trimestre”, a estimé de son côté le ministre russe Alexandre Novak.

“La Russie est sans doute en faveur de l’assouplissement des règles depuis longtemps. Mais c’est la première fois que l’Arabie saoudite s’exprime aussi clairement sur une hausse de la production”, a commenté James Williams de WTRG.

Ryad “veut un prix du baril proche de 70 dollars et ne veut pas qu’il monte à 90 dollars pour ne pas pénaliser les consommateurs”, a ajouté M. Williams.

Puits de pétrole

L’Arabie saoudite, premier exportateur mondial, est particulièrement observée par les marchés alors que l’offre mondiale est entravée par les baisses de production au Venezuela et pourrait l’être encore plus par les sanctions américaines contre ce pays et contre l’Iran.

“Le déclin de la production de l’OPEP nous pousse à penser que les réserves mondiales vont baisser au deuxième et au troisième trimestre 2018”, ont jugé les analystes de Société Générale, qui ont revu à la hausse leurs prévisions de prix pour le Brent, à 80 dollars au troisième trimestre.

L’avenir de l’accord de limitation de la production devrait être au coeur de la prochaine réunion de l’OPEP et de ses partenaires, fin juin à Vienne.

Le ministre saoudien a affirmé qu’il rencontrerait ses homologues de l’OPEP, et qu’il aurait l’occasion de se réunir avec M. Novak une ou deux fois avant la réunion de Vienne.

L’Arabie saoudite et la Russie sont deux des trois plus grands producteurs de pétrole au monde, avec les États-Unis.

La chute des prix a par ailleurs été accélérée par la publication vendredi d’un indicateur avancé de la production américaine, à savoir le nombre hebdomadaire de puits de pétrole actifs aux États-Unis.

Celui-ci a augmenté de 15 unités à 859 puits, suggérant une poursuite de la hausse de la production américaine, qui enchaîne actuellement les records d’après les rapports hebdomadaires de l’Agence américaine d’information sur l’Energie (EIA).



Under Pressure From Trump, Saudis Put Brakes on Oil’s Rally

  •  Riyadh supports a gradual increase in oil output over summer
  •  Middle East oil producers worried about U.S. anti-trust laws

The world’s largest oil exporter just made quite a policy swerve. Within six weeks, Saudi Arabia has gone from advocating higher prices to trying to stop the rally at $80 a barrel.

The U-turn scrambled the outlook for oil markets, hit the share prices of oil majors and shale producers and set up a diplomatic wrangle with other members of the Organization of Petroleum Exporting Countries.

What changed? The supply threats posed by the re-imposition of U.S. sanctions on Iran oil exports earlier this month and the quickening collapse of Venezuela’s energy industry are both part of the answer, but they’re secondary to Donald Trump. On April 20, the president took to Twitter to lambaste the cartel’s push for higher prices. “Looks like OPEC is at it again,” he tweeted. “Oil prices are artificially Very High!”

Trump’s intervention gave typically strident voice to a concern held more widely in the U.S. and other consuming countries: oil’s rally from less than $30 in early 2016 to more than $80 this month risked becoming a threat to global economic growth.

On Friday, Saudi Oil Minister Khalid Al-Falih responded, saying his country shared the “anxiety” of his customers. He then announced a shift in policy that all but gave a green light for a market sell-off, saying OPEC and its allies were “likely” to boost output in the second half of the year.

“The tweet moved the Saudis,” said Bob McNally, founder of consultant Rapidan Energy Group LLC in Washington and a former White House oil official. “The message was delivered loud and clear to Saudi Arabia.”

After Al-Falih’s comments, made following a meeting with his Russian counterpart in St. Petersburg, saw crude drop more than $3 to below $67 a barrel in New York on Friday. The bullish tone of recent market chatter, increasingly punctuated with talk about oil prices climbing past $100, $150 and even $300, suddenly looks overdone.

Who’s Got the Juice?

Saudi Arabia and Russia could potentially return the most oil to the market.

It wasn’t just the U.S. Other major buyers of Saudi crude also put pressure on Riyadh to change course, albeit a little more diplomatically than Trump. Dharmendra Pradhan, the Indian petroleum minister, said he rang Al-Falih and “expressed my concern about rising prices of crude oil.”

OPEC officials were in a meeting at the opulent Ritz-Carlton hotel in Jeddah on Saudi Arabia’s Red Sea coast when Trump tweeted his views and they immediately saw it as a significant intervention.

“We were in the meeting in Jeddah, when we read the tweet,” OPEC Secretary General Mohammad Barkindo said on Friday. “I think I was prodded by his excellency Khalid Al-Falih that probably there was a need for us to respond,” he said. “We in OPEC always pride ourselves as friends of the United States.”

To read a story on how consumers are responding higher prices, click here.

Diplomats and oil officials in OPEC countries were also worried about the potential revival in Washington of the so-called “No Oil Producing and Exporting Cartels Act,” which proposes making OPEC subject to the Sherman antitrust law, used more than a century ago to break up the oil empire of John Rockefeller.

The bill first gained prominence in 2007 when George W. Bush was president and oil prices were flirting with $100 a barrel and made a comeback several years later under Barack Obama. While it was opposed by those presidents, the risk for OPEC was that Trump “could break with his predecessors and support its passage,” said McNally.

In a sign that oil prices were climbing Washington’s agenda as gasoline prices approached the $3 a gallon mark, last week a sub-committee in the U.S. House of Representatives held a rare hearing on the NOPEC act.

There are also indications that Russia, whose decision to participate in OPEC’s cuts helped turnaround the oil market, has decided the rally has run far enough.

“We’re not interested in an endless rise in the price of energy and oil,” Putin told reporters in St. Petersburg on Friday. “I would say we’re perfectly happy with $60 a barrel. Whatever is above that can lead to certain problems for consumers, which also isn’t good for producers.”
OPEC and its allies will gather in Vienna for a policy meeting on June 22 to hammer out a deal. While Al-Falih and Russia’s Novak have indicated that output will most likely increase, the details — how many barrels from which countries — are still a question mark.

“In an environment of low inventories and rising geopolitical outages, raising some supply is prudent,” said Amrita Sen, oil analyst at Energy Aspects Ltd.

Oil producers are debating an increase ranging from 300,000 barrels a day at the low end, backed by Gulf producers including Saudi Arabia, and a larger increase of about 800,000 barrels a day favored by Russia, a person familiar with matter said on Friday.

“It’s too early now to talk about some specific figure, we need to calculate it thoroughly,” Novak said.

Even though Al-Falih’s comments brought about an immediate price reaction, there are still reasons for people to be bullish as traders await the impact of U.S. sanctions against Iran and wider political tensions in the Middle East.

And with global oil demand growing strongly, hedge funds will shift their focus on diminishing global spare capacity as OPEC returns barrels to the market. The U.S. government estimates the cushion at just 1.34 million barrels a day next year, below the 1.4 million reached in 2008 when oil prices surged to nearly $150 a barrel.

In a letter to investors earlier this month, Pierre Andurand, the bullish oil hedge fund manager, warned that if Saudi Arabia needs to “offset production declines from Iran and Venezuela” global spare capacity would decline to perilous levels.

“Oil prices could potentially surge to record high levels to force demand destruction very quickly,” he wrote.



Looks like OPEC is at it again.

Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!