Non-escalation of Iraq turmoil vital to world oil supply
June 20, 2014 9:16 am
The government of Iraq is currently waging battle against Islamist militants that continue to march closer to the its capital of Baghdad, threatening major spikes in oil prices.
Global attention has been given to the middle eastern country that boasts to be one of the world’s largest producers of crude capable of producing up to 3.3 million barrels of the fuel in a single day. The cheap cost to harvest oil in the Organization of Petroleum Exporting Countries (OPEC) member country has given them reserves that could be as much as 150 billion barrels.
While oil prices have risen since the start of the turmoil two weeks ago, the changes have been mostly restrained with the value of a barrel of Brent climbing up by a modest $5, showing just a monthly high. A big contributor to this would be the fact that its southern region, where a majority of Iraq’s production lies, has been so far untouched by the insurgents.
Analysts warn, however, that major changes could erupt if militants overtake the capital to disrupt financial infrastructures in place for Iraq’s exports to continue. It is predicted that prices per barrel of oil may jump by at least $40-$50 and cause the reserves kept by the International Energy Agency and fellow top producer Saudi Arabia to be released.
Combined with the already zero levels of oil exports coming out of Libya and the traditional increase in demand for the energy source in the summer season, any interruption in the supply can easily be magnified.
The material has been provided by InstaForex Company – www.instaforex.com
The government of Iraq is currently waging battle against Islamist militants that continue to march closer to the its capital of Baghdad, threatening major spikes in oil prices.
Global attention has been given to the middle eastern country that boasts to be one of the world’s largest producers of crude capable of producing up to 3.3 million barrels of the fuel in a single day. The cheap cost to harvest oil in the Organization of Petroleum Exporting Countries (OPEC) member country has given them reserves that could be as much as 150 billion barrels.
While oil prices have risen since the start of the turmoil two weeks ago, the changes have been mostly restrained with the value of a barrel of Brent climbing up by a modest $5, showing just a monthly high. A big contributor to this would be the fact that its southern region, where a majority of Iraq’s production lies, has been so far untouched by the insurgents.
Analysts warn, however, that major changes could erupt if militants overtake the capital to disrupt financial infrastructures in place for Iraq’s exports to continue. It is predicted that prices per barrel of oil may jump by at least $40-$50 and cause the reserves kept by the International Energy Agency and fellow top producer Saudi Arabia to be released.
Combined with the already zero levels of oil exports coming out of Libya and the traditional increase in demand for the energy source in the summer season, any interruption in the supply can easily be magnified.
The material has been provided by InstaForex Company – www.instaforex.com
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