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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

Many Topics Including The Oldest Dinar Community. Copyright © 2006-2020


    The water is running under OPEC and is oblivious

    Rocky
    Rocky
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    • Post n°1

    The water is running under OPEC and is oblivious Empty The water is running under OPEC and is oblivious

    Post by Rocky Tue Mar 16, 2021 3:18 pm

      The water is running under OPEC and is oblivious

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    For a high - looks dangerous, but most of the fault lines do not look harmful as well as the Organization of Petroleum Exporting Countries "OPEC" suffer from a small crack, could turn into large cracks enough to sink the ship .
     
    Contrary to what some think, the discussion is not about the dispute between Saudi Arabia and Iran, nor about the controversy related to Iraq's repeated failure to adhere to the goal of reducing production under the current "OPEC +" agreement. Rather, the matter is linked to the decision of the United Arab Emirates, the third largest producer in the "OPEC", to allow its crude oil to be freely traded on the open market by its main buyer. According to oil analyst Philip K. Verleger, the final outcome of this step could weaken "OPEC" and the "OPEC +" alliance .
     
    Until now, the major OPEC producers from the Arab Gulf states, such as Saudi Arabia, Iraq, Iran, Kuwait and the United Arab Emirates, sell their crude under strict conditions that determine where it is delivered, and prevent it from being resold by the primary buyer. This has given them the ability to adjust the prices they deal with in different parts of the world, depending on the local conditions of those markets, which is reflected in an increase in their returns. Failure to comply with these terms will result in the buyer being excluded from future purchases .
     
     
      
    By excluding this essential condition, the UAE relinquishes a controlling card, making the buyer able to divert its crude from one region to another, if he thinks doing so is more profitable for him. It may also open up the Arabian Gulf crude market to major oil trading companies such as: Vitol, Glencore, and Trafigura. In return, however, the increased flexibility on the part of the UAE and an expansion of the potential buyers segment will improve the attractiveness of its oil compared to its less resilient neighbors .
     
    This Emirati advantage can also be doubled, through its ability to increase the level of exports of the country's main "Murban" crude from the port of the Emirate of Fujairah, located outside the sensitive waterway of the Strait of Hormuz, which represents a selling point that its competitors lack in the Arabian Gulf .
     
     
      It is the first time that "derailment" has been so apparent. Iraq offered oil exports exempt from restrictions on determining the destination of shipment for a limited amount of its crude under a pre-payment contract with the Chinese company "China ZhenHua Oil Co." in December 2020. But this agreement never came into effect, and the Iraqis canceled the deal. Last month, after rising oil prices eased some of their immediate cash revenue needs .
     
    The removal of restrictions on not changing the destination of the shipment and resale was the latest move by the United Arab Emirates, indicating that it has begun to take a different course from its colleagues in the "OPEC" organization .
     
    This was preceded by several indications of differentiation. The Gulf country clashed with its partners in the organization about easing production restrictions when they met at the end of last November, which prompted discussions to continue until the second day, thus delaying the meeting that was scheduled with their non-OPEC allies to agree on Small increase in production for January. The UAE insisted that any decision to raise the volume of targeted production must be accompanied by strict pledges from OPEC + members who failed to comply with previous production reduction goals, to compensate for any surplus production they made during that period, by reducing their production in the following months .
     
    This insistence on the part of the UAE appears to be driven by frustration with the way it was handled, when it briefly increased its production last summer. It was reported that the UAE Minister of Energy, Suhail Al Mazrouei, was invited to Riyadh to clarify the situation in this regard, while Russia, which consistently exceeds its goal of production, has not faced any criticism at all .
     
    The UAE also believes that the restrictions on its production are more stringent than those imposed on others. At the level of exporting 2.63 million barrels per day, its target is equivalent to only 63% of its extractive capacity. This compares to 79% in Saudi Arabia. Even the kingdom's unilateral additional reduction, at the rate of one million barrels per day, does not make the volume of its disrupted production equal to the level of the disrupted production in the UAE .
     
     
       
    Establishing a position
    The difference between the UAE and Saudi Arabia regarding oil policy is an additional loophole in the relationship between the two countries, in addition to the UAE's position to reduce its presence in the ongoing war in Yemen. On the other hand, there was talk of Saudi Arabia stopping the embargo on Qatar unilaterally, prompting the Emiratis to follow suit .
     
    In addition, the amendments to the UAE oil contracts, in terms of allowing its crude to be freely traded on the open market, fall within the framework of the country's campaign to adopt Murban crude in Abu Dhabi as a regional benchmark for Middle East oil sales to Asia, which is the most important market for Arab Gulf oil. This would give a boost to Abu Dhabi's efforts to consolidate its position as a hub for the oil trade, and not merely to produce and export it. It is keen to make the most of its production capacity, which it intends to increase by about 20% to reach 5 million barrels per day by 2030, before oil demand begins to decline as the world increasingly turns away from fossil fuels, which could lead to its situation. On a collision course with the rest of the OPEC members.
    Quoting from Bloomberg East
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