I told Dennis that I was not going to post anymore but I just found a lot of time on my hands and decided to update the OPEC numbers from the MOMR that came out yesterday.
The new OPEC Monthly Oil Market Report is out with crude only production numbers for August 2016. All charts are through August 2016.
OPEC crude only production reached 33,237,000 barrels per day in August. This includes Gabon.
Algeria is in slow decline.
Angola seems to be holding steady.
Ecuador was sharply down in August but seems to be holding steady for the last two years.
Gabon has been added to OPEC but their production is so low it will have little effect one way or the other.
Indonesia will also not affect OPEC production in a big way one way or the other.
Iran’s increase since sanctions were lifted has slowed to a crawl. There are other problems on the horizon for Iran. They are talking about changing all their oil field contracts to “buy back” contracts. That is they want the option to nationalize all everything. This will likely cause a mass exodus of foreign oil companies from Iran and hit their production considerably.
I wrote, two months ago, that Iraq had peaked, at least for the next several years. I see no need to change that opinion now.
Kuwait has recovered from the problems they had in April. I expect their production to flatten out here with a slight decline over the next few years.
Libya’s problems continue, and will likely continue for a long while yet.
Nigeria’s problems continue and shows little signs of improving.
Qatar’s oil production seems to have bottomed out since late 2014.
Saudi Arabia is, in my opinion, producing flat out and has been for several years now.
The United Arab Emirates had some problems earlier this year but they seem to have recovered. I think they will hold production steady for a while now.
Venezuela’s oil production is still dropping but the decline seems to be slowing. Venezuela has very serious economic problems. They are nearing the “failed state” status.
It might seem disingenuous to call any country’s foreign oil dependency a nightmare, but that’s exactly what it is. A myriad of problems stem from foreign oil dependency, ranging from a massive transfer of wealth, to securing vital supply lines and shipping lanes to other geopolitical considerations.
As a major country becomes more dependent on foreign oil, that particular country’s geopolitical decisions and foreign policy become more limited or even forced, something the U.S. struggled with for nearly 40 years as oil demand was one of the major factors influencing U.S. foreign policy, especially in the Middle East, with subsequent allies and foes in the region up to the present.
Now, China, the world’s second largest crude oil importer, the world’s second largest economy and the fifth largest crude oil producer, will increasingly wrestle with this same quandary.