Citigroup explained the reasons for the jump in oil prices


Over the past month from mid-February to mid-March, the price of a barrel of Brent crude oil increased from roughly $30 to $40. According to experts of Citigroup because of irregularities in the supply of oil from OPEC countries of Nigeria and Iraq. Overall, according to analysts ‘ estimates, these disorders deprive the world market of 800 thousand barrels. oil daily, which is about 1% of world production.

Since mid-February in Iraq almost stopped the work of the oil pipeline from Kirkuk to the Turkish Ceyhan. 16 February, unidentified people blew up the pipeline, completely stopping oil transportation. According to the government of Turkey, a diversion was made by fighters of the Kurdistan workers ‘ party, Ankara opposition movement. The press service Reuters the PKK has denied involvement in the incident. The authorities of Iraqi Kurdistan were accused of undermining the troops of the Islamists.

The oil pipeline capacity is more than 600 thousand Barr. a day. In his own estimation of the government of Iraqi Kurdistan, it received from the sale of oil from the Kirkuk fields of about $14 million a day. Of this amount, in particular, salary paid to soldiers of the Kurdish army (Peshmerga), are actively fighting with the militants of the “Islamic state” (ISIS, prohibited in Russia grouping). A month of downtime of the pipeline, the government has missed the Kurds, thus, over $400 million.

In late February, the energy Ministry of Turkey announced that plans for a few weeks to fully repair the pipe. By 11 March, the work was finished, however, the Kurdish government has suspended oil supplies to Ceyhan in just a few hours after from resume. The oil is now extracted, according to the Turkish newspaper Daily Sabah, is pumped by Kurds in the terminals near Kirkuk.

In Nigeria on 14 February, unidentified committed undermining of the underwater pipeline leading from the field to maps of forcados oil terminal. The result of sabotage off the coast of Nigeria has formed an oil slick, and Shell as operator of production made the decision to suspend operations. In early March, the oil Minister of Nigeria Emmanuel IBE Cacique declared that works on restoration of the pipeline can last until mid-may.

From maps of forcados terminal, which is now left without a supply, earlier it was planned to supply the world market with 250 thousand barrels. of oil daily. In addition, until the beginning of March in the country held a nationwide strike of oil workers. In General, this situation, according to the Minister, forced the country to reduce production from 2.3 million to 2 million barrels. a day. This is the lowest level since November 2013. According to the March OPEC review, for February daily oil production by Nigeria fell by 100 thousand Barr. with 1.85 million to 1.75 million barrels.

Bloomberg analysts emphasize that the violations in supplies of Nigerian and Iraqi oil temporary, so soon the level will return on the world market. On the eve of the Vice-President of the consulting firm IHS Energy Jamie Webster warned that rising oil prices in the coming months may be terminated. The reason for this will become not only the restoration of the pipelines, but also the reaction of the shale producers in the USA. It was previously reported that the recovery of the amount of drilling new wells in case of an upward trend of a few months.