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RoofGardener

Oil supply disruption from Saudi ports

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RoofGardener

It appears that Saudi has - at least temporarily - restricted oil shipments to Europe and the America's. This arises from an attack by Houthi rebels on a Saudi tanker. 

https://www.ft.com/content/f0858962-9005-11e8-b639-7680cedcc421

Curiously.. the BBC are not covering this on their website, so I'm wondering whether there is an issue with the story ? But then, the financial times is a pretty respectable outlet ?

The FT speculates that this will cause the cost of oil to go up. 

 

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and then
1 hour ago, RoofGardener said:

It appears that Saudi has - at least temporarily - restricted oil shipments to Europe and the America's. This arises from an attack by Houthi rebels on a Saudi tanker. 

https://www.ft.com/content/f0858962-9005-11e8-b639-7680cedcc421

Curiously.. the BBC are not covering this on their website, so I'm wondering whether there is an issue with the story ? But then, the financial times is a pretty respectable outlet ?

The FT speculates that this will cause the cost of oil to go up. 

 

4

That link seems to be behind a paywall.  Here's another one: https://www.haaretz.com/middle-east-news/iran-backed-houthis-target-saudi-warship-off-yemen-coast-1.6313757

If the Houthis become effective at interrupting the free movement of oil, the Houthis are going to get hammered.

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RoofGardener
12 minutes ago, and then said:

That link seems to be behind a paywall.  Here's another one: https://www.haaretz.com/middle-east-news/iran-backed-houthis-target-saudi-warship-off-yemen-coast-1.6313757

If the Houthis become effective at interrupting the free movement of oil, the Houthis are going to get hammered.

Oooops - sorry about that @and then. The paywall didn't activate when I first visited. 

I'm curious about the BBC not covering this story, and it has set me pondering. Consider that - a week or two ago - President Trump persuaded the King of Saudi Arabia to increase oil production, in order to reduce the world oil price. 

Could this whole story of the attack on the tanker - and certainly the rather dramatic response - be a way of the Saudi's  welching on the promise, without losing face ? 

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and then
1 minute ago, RoofGardener said:

Oooops - sorry about that @and then. The paywall didn't activate when I first visited. 

I'm curious about the BBC not covering this story, and it has set me pondering. Consider that - a week or two ago - President Trump persuaded the King of Saudi Arabia to increase oil production, in order to reduce the world oil price. 

Could this whole story of the attack on the tanker - and certainly the rather dramatic response - be a way of the Saudi's  welching on the promise, without losing face ? 

Possibly, but my first instinct was that S.A. may be tiring of this fight and wants to bring in the "big guns" from the U.S. to finish them off.  If the Houthis are able to effectively even slow the movement of crude the U.S. Navy just might get a new assignment in the region.

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seanjo
1 hour ago, and then said:

That link seems to be behind a paywall.  Here's another one: https://www.haaretz.com/middle-east-news/iran-backed-houthis-target-saudi-warship-off-yemen-coast-1.6313757

If the Houthis become effective at interrupting the free movement of oil, the Houthis are going to get hammered.

I expect NATO will have ships on the way to bolster their presence.

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Helen of Annoy

Trump recently 'commanded' Saudis, over Twitter no less, to increase the production, because the price of oil was too high, which is 'bad' - to borrow that refined, highly professional expression from Trump's very competent vocabulary. 

What happens? 

At first they said something to the 'go away' effect, now they're decreasing the shipment, causing the price to go up. 

 

Now, which is more amusing - the possibility that the Saudis are doing this to show Trump he's not the boss, or that they are doing this at Trump's request, after he was told by his boss (Putin, of course) that the price of oil must go up, because that's what Russia wants. 

 

The attacked tanker is an excuse so pathetic I pity those who have to pretend they bought it. 

There will be no military action, but there will be more expensive oil. 

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Hammerclaw

That puts the Saudis in a Catch 22 situation. More expensive oil stimulates Canadian and U.S. domestic oil production, lessening the demand for Saudi oil.

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and then
On 7/26/2018 at 9:51 AM, Hammerclaw said:

That puts the Saudis in a Catch 22 situation. More expensive oil stimulates Canadian and U.S. domestic oil production, lessening the demand for Saudi oil.

Couldn't happen to a more deserving bunch.

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A rather obscure Bassoon
On 7/26/2018 at 10:51 AM, Hammerclaw said:

That puts the Saudis in a Catch 22 situation. More expensive oil stimulates Canadian and U.S. domestic oil production, lessening the demand for Saudi oil.

Can't wait for the day their wells run dry and these despots are cast to one side.Just another excuse to bang up the price of gasoline, Trump should ramp up US production and flood the market.

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Black Red Devil
On 7/27/2018 at 12:51 AM, Hammerclaw said:

That puts the Saudis in a Catch 22 situation. More expensive oil stimulates Canadian and U.S. domestic oil production, lessening the demand for Saudi oil.

Not sure this is true.  I might be wrong but I believe US oil comes mostly from fracking shale deposits which makes the cost of a barrel quite expensive.

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Black Red Devil
On 7/26/2018 at 4:19 PM, RoofGardener said:

It appears that Saudi has - at least temporarily - restricted oil shipments to Europe and the America's. This arises from an attack by Houthi rebels on a Saudi tanker. 

https://www.ft.com/content/f0858962-9005-11e8-b639-7680cedcc421

Curiously.. the BBC are not covering this on their website, so I'm wondering whether there is an issue with the story ? But then, the financial times is a pretty respectable outlet ?

The FT speculates that this will cause the cost of oil to go up. 

 

Saudi and US maneuver at the expense of Iran's economy maybe?

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Hammerclaw
53 minutes ago, Black Red Devil said:

Not sure this is true.  I might be wrong but I believe US oil comes mostly from fracking shale deposits which makes the cost of a barrel quite expensive.

Quite the contrary.                       https://tradingeconomics.com/united-states/crude-oil-production

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RoofGardener
6 hours ago, Black Red Devil said:

Saudi and US maneuver at the expense of Iran's economy maybe?

 

5 hours ago, Hammerclaw said:

Quite the contrary.                       https://tradingeconomics.com/united-states/crude-oil-production

Yeah.. I was about to say... an increase in world prices would benefit Iran ?

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Black Red Devil
9 hours ago, Hammerclaw said:

Quite the contrary.                       https://tradingeconomics.com/united-states/crude-oil-production

Considering the costs comparisons  (below) that's quite surprising.

Pipe and Pump Production 

Conventional oil production generally refers to the pipe and pump production off a vertical well. This means a hole has been drilled straight down into a deposit and a pump jack is put on it to help pull the deposit to the surface where it can be sent on for further refining. The cost-per-barrel of conventional deposits varies, with Saudi Arabia able to produce oil the most cheaply, sometimes under $10 a barrel. The Middle East and North Africa are also very efficient, producing oil as cheaply as $20 per barrel down. Worldwide, conventional oil production typically costs between $30 to $40 a barrel.    

Vs

The Bottom Line

There is no doubt that shale oil costs more than conventional oil to extract. Beyond that, there is a lot of variability in the cost of extracting shale oil, meaning that every well has a different level of cost-per-barrel of production from as low as $40 a barrel to over $90 a barrel. With these costs paid upfront for a comparatively short production life compared to a conventional well, it makes sense for the shale oil industry to suspend new wells when world oil prices dip and ramp up when the prices are strong. That means there are a lot of shale oil deposits sitting idle when crude oil prices are hovering around $50 a barrel.  

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Hammerclaw
6 hours ago, RoofGardener said:

 

Yeah.. I was about to say... an increase in world prices would benefit Iran ?

The more expensive the more competitive  becomes the harder to get oil. 

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Hammerclaw
2 hours ago, Black Red Devil said:

Considering the costs comparisons  (below) that's quite surprising.

Pipe and Pump Production 

Conventional oil production generally refers to the pipe and pump production off a vertical well. This means a hole has been drilled straight down into a deposit and a pump jack is put on it to help pull the deposit to the surface where it can be sent on for further refining. The cost-per-barrel of conventional deposits varies, with Saudi Arabia able to produce oil the most cheaply, sometimes under $10 a barrel. The Middle East and North Africa are also very efficient, producing oil as cheaply as $20 per barrel down. Worldwide, conventional oil production typically costs between $30 to $40 a barrel.    

Vs

The Bottom Line

There is no doubt that shale oil costs more than conventional oil to extract. Beyond that, there is a lot of variability in the cost of extracting shale oil, meaning that every well has a different level of cost-per-barrel of production from as low as $40 a barrel to over $90 a barrel. With these costs paid upfront for a comparatively short production life compared to a conventional well, it makes sense for the shale oil industry to suspend new wells when world oil prices dip and ramp up when the prices are strong. That means there are a lot of shale oil deposits sitting idle when crude oil prices are hovering around $50 a barrel.  

Effectively capping the price of oil, worldwide and making us immune to embargos and exorbitant price-gouging.  

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lightly
14 hours ago, Black Red Devil said:

Saudi and US maneuver at the expense of Iran's economy maybe?

.....more like Saudi and US maneuver at the expense of us.      

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The Caspian Hare

I'm sure Israel will fight Iran right down to the last American.

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RoofGardener
Posted (edited)
16 hours ago, The Caspian Hare said:

I'm sure Israel will fight Iran right down to the last American.

That would be a first, Caspian Hare. They've always fought their own wars !

Anyway, what has this got to do with Saudi Arabia restricting oil exports ? 

Edited by RoofGardener

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aztek
On 8/3/2018 at 7:55 PM, The Caspian Hare said:

I'm sure Israel will fight Iran right down to the last American.

Americans are patriots, which means they do not die for their country, they make another poor sob die for his.

Edited by aztek
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and then
On 8/4/2018 at 11:26 AM, RoofGardener said:

That would be a first, Caspian Hare. They've always fought their own wars !

Anyway, what has this got to do with Saudi Arabia restricting oil exports ? 

The Hare seems to have a hitch in his giddyup over Israel and our support for them.  To each his own but when honestly looking into a future where Israel has no allies, I see a nation that will quickly be pushed to the wall and will come out swinging with EVERYTHING she has.  On balance, I'd say peevishness over Jews having an inordinate amount of political clout in America might run second to continuing to keep nukes off the table for the M.E. region.  TBH, I think it will happen sooner or later but later is better, IMO.  It mystifies me that so many in this world hate Jews SO MUCH (not calling CH out here) that they are blind to the consequences of refusing to just leave them alone on a postage stamp-sized piece of land.  It's a level and character of hatred that has no analog.  

And far from having U.S. military men and women bleed and die for Israel, her own troops fight her wars.  The idea that an Islamist FUNDAMENTALIST government that is running amok in the M.E. region and threatening the world's oil supply is somehow Israel's enemy alone is some twisted logic.  The day Iran tests a nuke will be the last time the world will see oil flows that do not meet the approval of the Iranian death-cult mullahs.  I hope the sanctions CRUSH that government's ability to do business in the world and that we're able to surreptitiously aid the youth of that nation to throw off the shackles of the death-cult.

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GlitterRose
On 8/13/2018 at 8:13 AM, aztek said:

Americans are patriots, which means they do not die for their country, they make another poor sob die for his.

You're not American, aztek?

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