Turkey awaits Iraq guarantees to restart crude exports

: Condensate, Crude oil
23/04/11

Turkey will not allow exports of crude from northern Iraq to resume from its Ceyhan port until it gets a response from Baghdad about having a meeting on an outstanding arbitration, a source with knowledge of the matter told Argus.

Around 400,000 b/d of crude produced in northern Iraq's semiautonomous Kurdistan region has been kept out of export markets since 25 March — Ceyhan being the only viable outlet — and producers in the region have shut oil fields with storage filling.

The pipeline was stopped after the International Court of Arbitration of the International Chamber of Commerce (ICA-ICC) ruled that Turkey had breached a 1973 agreement by allowing oil marketed by the Kurdistan Regional Government (KRG) to be exported, without Baghdad's consent, between 2014 and 2018. The court ordered Turkey to pay Iraq $1.47bn in compensation.

Although a deal was signed between the KRG and Baghdad on 4 April, which was meant to lead to the resumption of crude exports, Ankara is holding off pending assurances about a second arbitration case, again brought by Baghdad on the same issue and relating to the period since 2018.

"Talks should be held soon, but Ankara needs some guarantees from Baghdad especially in regards the arbitration case for 2018 onwards," the source said.

The KRG, and the producers operating in its territory, are now spectators in a dispute over which they have no control or leverage. The deal the KRG signed with Baghdad gave away much of the marketing rights it had to its crude, on the understanding that exports would resume.

The most recent cargo of KRG crude to load from Ceyhan was on the Mareta on 24 March.

By Bachar Halabi and Aydin Calik

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24/12/03

Industry wary of Trump tariffs on Canada, Mexico

Washington, 3 December (Argus) — US president-elect Donald Trump's plan to impose 25pc tariffs on all imports from Canada and Mexico could have a profound impact on the US oil and gas industry and the US' diplomatic efforts, energy industry representatives said at an industry conference on Tuesday. Cenovus Energy, the second-largest oil and gas producer in Canada, is paying close attention to Trump's rhetoric on trade, and trying to "educate" policymakers in the incoming Trump administration on how tariffs on Canada could impact North America's deeply integrated energy system, Cenovus director of US government affairs Steve Higley said at the North American Gas Forum in Washington, DC. The US in 2023 imported 3.9mn b/d of crude oil from Canada and 730,000 b/d from Mexico, accounting for 60pc and 11pc of US crude imports, respectively, according to US Energy Information Administration (EIA) data. Refineries in the US Midwest's PADD 2 region also process about 2.5mn b/d of Canadian crude, Higley said. The US also exports a significant amount of natural gas to Mexico — 6.2 Bcf/d (176mn m³/d) in 2023, according to the EIA — which is another "reminder of how integrated the North American energy system is," said Dustin Meyer, senior vice president of policy at the influential trade group American Petroleum Institute (API). Retaliatory tariffs by Mexico, threatened by Mexican president Claudia Sheinbaum last week in response to Trump's initial threat of tariffs, would likely impact that gas trade. Sheinbaum and Trump have since taken on a more conciliatory tone toward the subject after the two had what Trump called a "wonderful" conversation. API repeatedly called on Trump in his first administration to de-escalate his trade dispute with China, which it said threatened investment in US LNG. A section of API's website on trade titled "The Truth about Tariffs" reads: "Tariffs are taxes on imported goods that increase costs for consumers." Aside from the threat of tariffs causing "alarm" in Canada, it is not clear how US consumers would benefit from a tariff on all Canadian products, including oil and gas, said Robert Johnston, senior director of research at Columbia University's think tank Center on Global Energy Policy. On the diplomatic front, there is a "tension" between the incoming Trump administration's argument that US oil and gas production must be increased to support American allies, when it is also threatening tariffs to support American industry over that of its trade partners, Johnston said. The initiation of new trade disputes could also erode the US' ability to compete with China, said Jason Grumet, chief executive of trade group American Clean Power Association. "Are we trying to take China on alone, or are we trying to build a global economy of the democratic nations who have been our allies for 50 years?" Grumet asked. Whether the incoming Trump administration will actually go ahead with tariffs on Canada and Mexico is far from certain. From its rhetoric, the administration appears to care deeply about narrowing the US' trade deficit, leveraging its massive energy production on the global stage, and keeping energy prices low for US consumers, Meyer said. But "if that's the vision, what is the form that specific policies take?" he asked. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Mexico central bank flags 2025 growth uncertainty

24/12/02

Mexico central bank flags 2025 growth uncertainty

Mexico City, 2 December (Argus) — Mexico's central bank (Banxico) maintained its base-case 2025 GDP growth estimate at 1.2pc, with a range of 0.4pc to 2pc, citing heightened global uncertainty fueled by geopolitical conflicts and potential shifts in international economic policies. Central bank governor Victoria Rodriguez last week addressed US president-elect Donald Trump's proposed 25pc tariffs on Mexican goods, urging caution until the trade situation clarifies. Mexican president Claudia Shienbaum initially responded with a firm stance, saying Mexico could apply counter-tariffs. Later, Sheinbaum and Trump had a "friendly" phone call to discuss issues surrounding the proposed 25pc tariff on Mexican and Canadian imports, Sheinbaum said. Banxico raised its 2024 GDP growth forecast to 1.8pc from 1.5pc in its previous quarterly report in August, driven by stronger-than-expected third-quarter performance. Still, Banxico noted that the additional growth is driven by increased spending on imported goods rather than domestic production, particularly in investment and private consumption. Inflation dynamics remain mixed. While headline inflation rose to an annualized 4.76pc in October, core inflation eased to 3.58pc, its lowest level since mid-2020. Rodriguez emphasized progress on inflation despite external uncertainties, signaling room for further monetary easing. Banxico cut its target interest rate by 25 basis points to 10.25pc on 14 November and is widely expected to lower it again to 10pc at its 19 December meeting. Projections from Mexican finance executives institution (IMEF) suggest the rate could drop to 8.25pc by the end of 2025. Banxico also revised its 2024 inflation forecast to 4.7pc from 4.4pc in the August report but expects inflation to return to its 2–4pc target range by early 2025, with a 3pc rate projected by the fourth quarter. Other adjustments include a downgraded forecast for formal job creation in 2024 and 2025, with the range estimate for full-year job creation in 2024 dropping to 250,000–350,000 from 410,000-550,000 in August. The 2025 estimate came down to 340,000–540,000 from 430,000–630,000.The 2025 trade deficit outlook was also tightened to $14.9bn–$22.1bn, compared to a previous range of $13.7bn–$23.7bn. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Opec+ meeting delayed to 5 December

24/11/28

Opec+ meeting delayed to 5 December

Dubai, 28 November (Argus) — A meeting of Opec+ ministers scheduled for 1 December has been postponed to 5 December. Opec said the delay is because of a conflicting travel schedule for energy ministers of Mideast Gulf countries, as the Gulf Co-operation Council (GCC) leaders summit in Kuwait overlaps with the Opec+ meeting. The Opec+ meeting, which was to be held online, will coincide with a decision to be taken by eight member countries on whether to press ahead with a plan to begin the phased return of 2.2mn b/d of "voluntary" production cuts to the market from January. This was to begin in October, but concerns about the strength of oil demand and price weakness prompted the group to postpone to December and then to January. The UAE will start increasing its output from January regardless, as a 300,000 b/d increase to its official production quota kicks in over the course of 2025. Any increase to Opec+ supply would be tempered by additional cuts that some of the eight will be making in the coming months to compensate for past overproduction. Iraq, Kazakhstan and Russia are the group's leading overproducers. Saudi energy minister Prince Abdulaziz bin Salman on 27 November talked with Kazakhstan's energy minister Almasadam Satkaliyev and Russia's deputy prime minister Alexander Novak, Moscow's point man on Opec+ matters. A day earlier, Prince Abdulaziz met in Baghdad with Iraq's prime minister Mohammed Shia al-Sudani and Novak. The statements from both meetings emphasised "full adherence to the [current policy] agreement, including the voluntary production cuts agreed upon by the eight participating countries, as well as compensating for any excess production." The 5 December meeting will be a third consecutive Opec+ ordinary ministerial meeting to be held virtually rather than in Vienna. The last time Opec+ held its ministerial meeting in-person was in June 2023. By Bachar Halabi and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US refiners cannot readily replace Canadian oil: AFPM

24/11/27

US refiners cannot readily replace Canadian oil: AFPM

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Traders expect Opec+ to delay output increase

24/11/26

Traders expect Opec+ to delay output increase

London, 26 November (Argus) — Vitol, Trafigura and Gunvor representatives today suggested that Opec+ members would probably continue to delay their plan to start increasing crude production. The comments from three of the world's biggest trading firms come just days before the Opec+ alliance is set to hold a ministerial meeting on 1 December to decide its output policy for next year. At the top of the agenda is whether eight members will begin returning 2.2mn b/d of "voluntary" production cuts over a 12-month period starting in January — three months later than originally planned. "I think there's no room for them to increase," Gunvor chief executive Torbjorn Tornqvist said at the Energy Intelligence Forum in London today. "So far they've been very disciplined and they've made the right call not to add any oil," he said. Most forecasters predict weak oil demand next year, with the market flipping into a surplus. "I suspect that the barrels coming back will again be deferred," Trafigura's global head of oil Ben Luckock said. "Exactly how long? Probably not that far, but they have the choice to be able to continue to [delay] and they probably don't enjoy the price right now." The front-month Ice Brent crude futures is currently trading around $73/bl, around $20/bl below where prices were before Opec+ announced its initial output cut in October 2022. The alliance has reduced output by about 4mn b/d since then, Argus estimates. "The likelihood is that Opec will try to manage the market through the next two to three months to wait to see how some of these geopolitical aspects solve themselves," Vitol chief executive Russell Hardy said. All three executives pointed to geopolitical uncertainties such as the incoming US administration's Iran sanctions policy, the trajectory of the Ukraine-Russia war and the conflict in the Middle East as potential market movers in 2025. Luckock also stressed the importance of compliance for the Opec+ alliance. "I think compliance is a huge deal, because a cheating Opec doesn't yield higher prices." Members including Iraq, Kazakhstan and Russia have tended to exceed their production targets this year, tarnishing the credibility of the alliance. But a long-running Saudi-led effort to get these countries to comply and compensate appears to be bearing fruit. The three executives also gave their traditional forecasts for what the oil price would be in 12 months. Tornqvist said he expected prices to be similar to today's levels at $70/bl, which he described as "fair" given the world's large spare production capacity and declining production costs. Luckock said it was a "mug's game" forecasting 12-months out, particularly given the range of geopolitical uncertainties on the horizon. When pressed for a number he settled on $75/bl, but said this was not particularly useful to anyone. Hardy stuck with his previous forecast of $70-80/bl. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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