Guest Blog, Abshire-Smith Iraq Country Manager
The oil price surged nearly 4% as crunch talks aimed at settling a dispute over a nuclear weapons programme for Iran appeared to stall and official figures showed that stockpiles of U.S. crude had risen by less than had been feared by 4.8 Million Barrels.
This is a day after crude prices slid for a third day on fears of a nuclear deal between Iran and major world powers that would allow the Islamic Republic to release more than 1 million bpd of crude in the already oversupplied global market, analysts predict that any deal could reduce oil prices by the further 10%. The United States, France, Germany, Britain, Russia, and China are trying to break a decade-long standoff on Iran’s nuclear activities in exchange for lifting tough international economic sanctions. This morning hope seems to be lost in a deal being reached. Although officials have said that progress is being made, it remains uncertain how talks that were extended would end.
As the fight in Yemen intensifies with Saudi, which led oil prices to rise sharply last week amid concerns,that fighting in the Arabian Peninsula between a Saudi-led coalition and Houthi rebels in Yemen could disrupt supplies. While Yemen is a minor-league oil producer, the fact that Saudi Arabia the country’s northern neighbor and one of the world’s leading oil exporters, had become embroiled in its first armed conflict, a relative stable country this is the first they have been at war in more than 50 years.
Iran has somewhere between 7 and 35 million barrels of oil stored, according to estimates by ship-brokers and government officials, which are expected to be the first sold on international markets should sanctions be removed. Iran could boost oil output by around 500 000 barrels per day nearing 700 000 barrels per day until year-end.
In positive news from Iraq, Iraqi government forces have been able to retake Saddam’s hometown of Tikrit from ISIS (Islamic State of Iraq & Syria), while victory has been declared, pockets of fighting continues as Iraqi Forces along with Shiite Militia take part in clearing operations. (Tikrit had been under ISIS control since June). The push into Tikrit comes days after a series of U.S.-led airstrikes targeted ISIS targets around the city.
Iraqi forces have tried multiple times to win back Tikrit since ISIS conquered the city as part of its campaign to amass an expansive Islamic caliphate but failed until now. This operation, however, was the biggest by the Iraqi military so far.
The latest push began after PM Abadi ordered Iraqi forces on March 1 to retake Tikrit and Salahuddin province. Militants have been under pressure ever since in the battleground city, which is the birthplace of former Iraqi dictator Saddam Hussein and is, located about 160 kilometres (100 miles) north of Baghdad.
The victory in Tikrit sets the stage for Iraqi forces to take back an even bigger prize: Mosul. Mosul is Iraq's second-biggest city and the site of one of its military's biggest embarrassments, when Iraqi troops dropped their weapons and ran rather than defend their posts last June.
Brent Crude May: $56.70 / barrel
US Crude May: $49.51 / barrel
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