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OPEC Finance Chiefs to Discuss Dollar Oil Pricing, Khelil Says
Maher Chmaytelli, Bloomberg
OPEC finance ministers will meet to study a proposal from Venezuela to price oil in a currency other than the U.S. dollar, the group’s President Chakib Khelil said.
Algeria wants to keep the U.S. currency for pricing the fuel, he said, according to a report published today by the state-run Algerie Presse-Service.
“As long as the U.S. maintains its political and economic power, the U.S. dollar will remain the currency for billing oil sales,” Khelil said, without saying when the finance chiefs may meet.
Saudi Arabia, the world’s top oil exporter, also wants to maintain dollar pricing, Saud al-Faisal, the kingdom’s foreign minister, said in December. At the Organization of Petroleum Exporting Countries’ November summit, al-Faisal refused to allow the inclusion of Venezuela’s proposal in the negotiations, and suggested that finance ministers meet instead to discuss its economic implications.
Iran has halted all oil transactions in dollars, Oil Minister Gholamhossein Nozari said Dec. 8, according to the state-run ISNA news agency.
(14 February 2008)
Contributor Marc writes:
I’m sure it is inevitable that OPEC will sell oil in a “basket of currencies” one day. Tensions between Exxon-Mobil and Venezuela likely only hasten the arrival of that day. Notice Venezuela’s proposal seems to exclude the US dollar as an OPEC currency of choice. Probably not what Exxon-Mobil had in mind when they attempted to freeze Venezuela’s assets.
The door to Iraq’s oil opens
M K Bhadrakumar, Asia Times
The cynosure of Western eyes at the meeting of the Organization of Petroleum Exporting Countries, commonly known as OPEC, in Abu Dhabi, the United Arab Emirates, last December 5 was an unexpected personality – Iraqi Oil Minister Hussain al-Shahristani.
But that wasn’t a chance occurrence. By the time OPEC gathered in Vienna six weeks later, it was beyond doubt that Shahristani was on the way to becoming a celebrity in the West.
Shahristani is “a rare thing” in politics, to quote Toby Lodge, the well-known scholar on Iraq at the International Institute of Strategic Studies in London – “not too religious, not too political, not too secular, not too pro-American Shi’ite who [Grand Ayatollah Ali] Sistani would talk to”.
…Of course, the soft-spoken, English-speaking Iraqi Shi’ite dissident leader was a familiar face in Western capitals through the 1990s. But today, he is no longer a political fugitive. He is no longer an Iraqi dissident seeking patronage. On the contrary, Shahristani finds himself in an enviable position as a creator of wealth for the Western world. He holds the key to the door that opens out to the magical world of Iraqi oil.
Iraq’s proven reserves of oil are only smaller than those of Saudi Arabia and Iran – and Iraq is only about 30% explored. Experts are generally of the view that Iraq’s actual oil reserves could well turn out to be at least double the 115 billion barrels of proven reserves. Beyond that, it is anybody’s guess as to the scale of Iraq’s as-yet-untapped gas reserves.
And Shahristani is visibly getting ready to negotiate the contracts for Iraq’s “super giants”. In the idiom of Big Oil, “super giants” are fields with at least five billion barrels of oil in reserve.
(16 February 2008)
Iranians Scheme to Elude Sanctions
Farnaz Fassihi and Chip Cummins, Wall Street Journal
Tough sanctions haven’t brought Iran to its knees, but they’re rewriting how business is done in the Middle East’s second-largest economy.
After several rounds of United Nations and U.S. economic and banking restrictions, Iranian businesses are starting to feel the pain. The measures are complicating how they finance operations, pay bills and export everything from pistachio nuts to Persian carpets.
But the measures also are having unintended consequences, some not necessarily in American interests: They are strengthening business ties between Iran and some of its neighbors at a time when Washington wants to weaken them. They are providing China and other Asian giants with an opening to win big oil projects in Iran, as Western oil majors scramble for new reserves.
They also are rerouting money flows between Iranian businesses and their overseas customers and suppliers, pushing them outside of the regulated global banking system.
(13 February 2008)
No mention of the Iranian oil bourse. Also posted here.
Analysis: Energy policy is foreign policy
Ben Lando, UPI
… “Post-Cold War, there are common interests, even between the United States and Iran, certainly between the United States and other Gulf states,” said James Placke, senior associate and Middle East expert at Cambridge Energy Research Associates. “Security interests are still a very important part of it; energy interests are still a very important part of it. Whether the United States gets most of its oil or only a small portion — and it is a small portion — from the Gulf region really doesn’t matter. There’s one oil market and in the supplies to the world market from the Gulf are absolutely critical, and that’s what’s important to the United States.”
Placke, who spent three decades in top posts at the U.S. State Department and Foreign Service, was speaking at a panel at CERAWeek, the world’s largest annual energy conference.
Placke pointed to U.S. attempts to keep the Soviet Union from oil and gas, while attempting to shore up as many dedicated supplies as possible. Now, the Bush administration’s enemy No. 1 is Iran. And, couched in fears Tehran is attempting to build nuclear weapons capabilities, Washington is leading the charge for even more sanctions.
(X February 2008)