Since Iraq has a large portion of the global oil and bitumen, we have decided to bring some pieces of news of Iraqi bitumen.
Respectively, the first one is
the fact that the market has put pressure on OPEC Plus to raise production.
Market pressure on OPEC Plus to increase production of Iraqi bitumen
“The wounds of falling prices last year should teach us to be careful,” the
minister told traders and analysts as he warned them about forecasting
an increase in OPEC Plus production. Despite rising prices and the fact,
that many traders predict that we will face a severe oil shortage later this
year, the Saudi oil minister called for a cautious approach to increasing production, according to news agencies. “We are much better off than last
year, but I have to warn you again about this satisfaction,” he said in a speech
on Wednesday. “Market instability is very high and we have to be very vigilant. “Generally speaking, with the success of vaccines and their announcement
in early November, markets expect supply shortages, with Brent crude
rising more than $25, or 65 percent, in three months.
* OPEC Plus & the Iraqi bitumen
To be more specific, the dispute between the Saudi oil minister and traders
over the forecast of a balance between oil production and consumption at
this point in the oil price cycle has a long history and is natural. On the
other hand, Saudi Arabia and other OPEC oil producers, as well as its allies
such as Russia, called OPEC Plus, tend to be pessimistic about rising demand. It’s also good to mention that part of the reason for this pessimism is that they
fear a return to falling oil prices and revenues, at a time when memories of
falling oil prices are still fresh. “The wounds of what happened last year
should teach us to be careful,” the Saudi oil minister said on February 17. However, at the same time, producers have financial incentives that
can, along with caution, lead them to make mistakes.
Iraqi bitumen and the prices
As mentioned before, rising prices are in the interest of governments’
financial condition in the short run, even if it again creates conditions for
excess production and falling prices in the long run. Therefore, it is only
natural that OPEC should be cautious about increasing production at this
stage of the price cycle, even if prices go up and stocks fall. Additionally, slowly increasing production by OPEC usually causes oil reserves to fall below
average and prices to rise. Nevertheless, when non-OPEC producers
increase production, prices fall. “Do not try to predict what is unpredictable,”
the Saudi oil minister warned traders and analysts this week as they
try to predict OPEC Plus’s reaction to recent oil price hikes.
The UN agency predictions and the Iraqi bitumen
As a matter of fact, a United Nations agency said in a report that we expect
the global trade recovery to slow in the first quarter of this year (2021) due
to the continuing corona outbreak. In 2020, world trade fell by about nine
percent, and the prevalence of corona and aviation disruption has continued
to this day. To put it differently, the UN agency predicts that in the first quarter
of 2021, trade in goods will decrease by 1.5 percent compared to the last
quarter of last year; in the services sector, they project this reduction at 7%. This prediction, of course, could change due to the uncertainty of the virus’s
behavior and spread, and the support packages that governments may offer.
In addition to the above, the United Nations Conference on Trade
and Development – a United Nations intergovernmental organization –
said in a report that in the first half of last year, when trade and travel
were severe, world trade fell by about 15 percent, but in the second half Improved. In fact, in the last quarter of last year,
world trade improved by 8% compared to the third quarter of this year. Moreover, this improvement can be large to developing countries, especially
East Asia; Trade in goods originating in these countries in the last quarter
of the year (compared to the third quarter of 2019) had improved by
about 12 percent.
Iraq bitumen and the exports rates
We have declared the East Asia economy a leader in the recovery process
due to significant export growth. It is also needless to mention that in the
fourth quarter of last year, with the exception of the energy and
transportation sectors, most of the manufacturing sectors saw improvements. The United Nations says countries such as China and, to some extent,
India have performed better than other countries in exporting services, respectively.
Recent developments, meanwhile, have boosted vaccine prospects for
the coming months. Roughly speaking, Brent crude hit $61 a barrel in
global trading on Wednesday (February 10); Oil prices are now at their
highest level since the start of the global coronavirus epidemic in a year. With
air travel declining due to corona-related restrictions and border closures,
air traffic has fallen by about 70 percent since last year,
according to the International Air Transport Association.
However, with the increase in online shopping due to numerous quarantines,
fuel demand increased to some extent due to the increase in the volume of
goods transfers. Notwithstanding, oil demand is still far from normal
market conditions; The International Energy Agency said last month
that a slowdown in the economy could delay demand for oil to return
to previous years for years.