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Iraq Crisis: Why Haven't Gas Prices Spiked Yet?

By  +Follow June 18, 2014 8:15AM
Tickers Mentioned:

iraq oil production, how much oil does iraq produce, oil prices middle east, brent crude prices, iraq crisis oil prices,Members of the militant Islamic State of Iraq and the Levant (ISIS) continue on the offensive, and sabotaging oil production in Iraq has remained a major strategy. As of Tuesday, June 17, insurgents forced the shutdown of the Iraq’s largest oil refinery in Baiji. As they close in on the Kurdish-run provinces of northern Iraq, ISIS forces threaten the second of only three Iraqi refineries. With only two thirds of its refineries currently in operation, lowered supply has already placed strains on domestic production.

Prior to its forced closure, the Baiji refinery had a production capacity of 300,000 barrels per day. However, it is a domestic supplier, and as such, its closure does not directly threaten international crude oil prices. What it does threaten is a shortage of supply within Iraq, with indirect long-term ramifications including increased pressure on the remaining two refineries as well as potential rerouting of refined, usable oil to account for the domestic shortage.

Insurgents Surge Forward, Jump in Gas Prices Anticipated

Projections for Iraqi crude oil production are dwindling as ISIS insurgents increase their territory holdings. The International Energy Agency estimates for future Iraqi oil production are looking leaner. Maximum extraction has dropped to 4.54 million barrelsper day by 2019, far below the 2012 expectation of 9 million per day by 2020.

As export prospects shrink, futures prices for Brent crude are on the rise. At a current trading price of $113, various sources speculate that it could continue climbing to anywhere from $116 to an extreme of $150 per barrel. Last month, Brent was trading at about $108 per barrel.

Stephen Schork, editor of energy industry newsletter The Schork Report, told CNNMoney the price of gas typically rises between 2 and 2.5 cents per dollar jump in crude oil. The national average for a gallon of gasoline is about $3.65. If the barrel price of crude continues to rise, this translates to a potential jump in gas prices by anywhere between 20 and 84 cents per gallon with a delay of about two to three weeks to account for barrel trading, exporting and refining. 

China is currently the largest consumer of Iraqi oil, importing about 60% of the 3.3 million barrels produced each day. Meanwhile, the IEA expects 2014 global demand to rise by 960,000 bpd more than its previous May 2013 projections, reaching an average of 92.6 million bpd. The report shows the variety of pipelines linking Iraqi oil fields, all of which cross ISIS territory and many of which are currently offline due to the conflict.

Global Oil Demand Expected to Fall Though Oil Companies Remain Strong

Despite a 2014 increase in demand, the IEA expects a gradual slowdown in oil demand after 2015. Recurring unrest in the Middle East combined with severe environmental impacts and the rising price at the pump are placing limits on future oil dependency. The investment needed to develop Iraq’s oil capacity to reach its full potential is likely to be deterred or entirely impeded.

While prices at the pump are likely to increase within the next few weeks, Western oil corporations with holdings in Iraq oil fields remain in good health.

Over the past five days, shares in Halliburton Company (HAL) have risen 0.75%, while British Petroleum (BP) shows gains of 1.35%. All Western oil companies claim holdings on oil fields located in southern Iraq, away from the current conflict to the north.

Chevron Corp. (CVX)  is faring particularly well despite its proximity to the conflict, with shares up 2.78%. The corporation holds an 80% stake in Kurdistan’s Qara Dagh block. Production is still in the exploratory stage, but previous drilling efforts have confirmed the presence of active petroleum deposits.


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Results for hal
29 Nov 15 00:13:34
RT @activiststocks: ICYMI Jeff Ubben’s Midlife Crisis? https://t.co/dFOH7RJF1d $HAL $BHI $FOXA
28 Nov 15 21:39:51
$SALE breakout on #BlackFriday up 5% target $15. 6 EV/EBITDA, $60M stock buyback plan in Q4 https://t.co/qM8kTQpx0i $HAL $ESRX $MYL
28 Nov 15 16:57:51
RT @activiststocks: ICYMI Jeff Ubben’s Midlife Crisis? https://t.co/dFOH7RJF1d $HAL $BHI $FOXA
28 Nov 15 16:03:01
RT @activiststocks: ICYMI Jeff Ubben’s Midlife Crisis? https://t.co/dFOH7RJF1d $HAL $BHI $FOXA
28 Nov 15 15:52:29
UUP PowerShares DB US Dollar Index Bullish Fund Day High https://t.co/vK6D9Y5EGA $UUP $DFS $FB $HAL #UUP #share … https://t.co/ThRo9AsQHr
28 Nov 15 15:49:33
UUP PowerShares DB US Dollar Index Bullish Fund Day High https://t.co/x7iUVvsuaI $UUP $DFS $FB $HAL #UUP #share #investing
IH News Desk
28 Nov 15 15:39:34
HAL Halliburton Co. Last Price https://t.co/4PtQ93xffZ $HAL $LNKD $RYIIX $ITA #HAL #invest #tradeideas
28 Nov 15 15:34:26
AAPL Apple, Inc. Market Cap https://t.co/ibAbWyrzo7 $AAPL $GPRO $HAL $FAGIX #AAPL #stock #share https://t.co/g2qiIuHcOg
28 Nov 15 15:33:09
AAPL Apple, Inc. Market Cap https://t.co/9lTZMgy5D4 $AAPL $GPRO $HAL $FAGIX #AAPL #stock #share
28 Nov 15 14:45:09
QID ProShares Ultra Short QQQ Quotes https://t.co/jbeCK0s4GR $QID $HAL $GM $C #QID #share #share
Rosner Stocks
28 Nov 15 14:40:33
HAL Halliburton Co. EOD Data https://t.co/2jLbWDasFl $HAL $WMIH $HEZU $FDX #HAL #investing #stockmarket
28 Nov 15 14:37:32
ECA.TO EnCana Corp. Tick https://t.co/5qyJVdmTSP $ECA.TO $MYEC $HAL $IEF #ECA.TO #share #tradeideas
28 Nov 15 14:36:33
CTRP https://t.co/MA6KRq38NM Intl Ltd. Company Info https://t.co/MLfwydYT48 $CTRP $BAC $F $HAL #CTRP #stock #stocks
28 Nov 15 14:36:33
CVX Chevron Corp. Market Cap https://t.co/URPMTaTbI3 $CVX $HAL $CM.TO $LAD #CVX #investing #invest
28 Nov 15 14:33:32
AEM Agnico Eagle Mines Ltd. Dividend https://t.co/vosTsrEbm9 $AEM $WEN $AUY $HAL #AEM #share #stocks
Kevin Lennil
28 Nov 15 14:21:08
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28 Nov 15 11:45:32
SBGI Sinclair Broadcast Group, Inc. Last Price https://t.co/8PbYrtuM1z $SBGI $HAL $NBG $XLNX #SBGI #finance #stockmarket
28 Nov 15 11:43:33
NWBO Northwest Biotherapeutics, Inc. Financials https://t.co/JWQU9VSsJK $NWBO $NATI $HAL $USO #NWBO #tradeideas #tradeideas
Lucky Jimmy
28 Nov 15 11:42:33
MDY SPDR S&P MidCap 400 E.P.S. https://t.co/sDEBTuAEDd $MDY $KMI $O $HAL #MDY #nasdaq #invest
Penny Stocks Blog
28 Nov 15 11:41:04
RT @stock_forums: HAL Halliburton Co. Bid https://t.co/8KDS1kcqbP $HAL $DIS $Y $AMBA #HAL #pennystocks #finance
Stock Forums
28 Nov 15 11:39:16
HAL Halliburton Co. Bid https://t.co/8KDS1kcqbP $HAL $DIS $Y $AMBA #HAL #pennystocks #finance
28 Nov 15 09:50:04
VLTC Vanguard S&P 500 ETF Bid https://t.co/zciUE3l3D7 $VLTC $AMBA $GHDX $HAL #VLTC #investing #pennystocks
Lucky Jimmy
28 Nov 15 09:41:04
HAL Home Depot, Inc. Yield https://t.co/SEcMRpd5tQ $HAL $NATI $F $NTES #HAL #stocks #stocks
28 Nov 15 08:41:02
Halliburton refiles bid for EU approval of Baker Hughes takeover https://t.co/ByXxgHlCnw $HAL, $BHI https://t.co/wQxRXd7fof #oil #energy
Hasanna Hosanna
28 Nov 15 08:08:15
RT @Bidnessetc: Halliburton Seeks EU Approval For Baker Hughes Deal https://t.co/geTqO4bWdc $HAL $BHI https://t.co/vXPGH4zpcE
Bidness Etc
28 Nov 15 07:48:24
Halliburton Seeks EU Approval For Baker Hughes Deal https://t.co/geTqO4bWdc $HAL $BHI https://t.co/vXPGH4zpcE
28 Nov 15 06:49:07
UIS Unisys Corp. Prev Close https://t.co/BSrzGdZhJ9 $UIS $HAL $SLTD $FXI #UIS #stock #pennystocks
28 Nov 15 06:45:14
PSA Public Storage, Inc. Day High https://t.co/qR8YdzGDOs $PSA $HAL $AMBA $GENE #PSA #invest #pennystocks
28 Nov 15 06:34:02
BLTA Baltia Airlines Inc. Yield https://t.co/NTs1RvzyoC $BLTA $HAL $XIU.TO $RGLS #BLTA #nasdaq #finance
Investors Hangout
28 Nov 15 05:45:08
MJNA Medical Marijuana Inc. Bid Size https://t.co/GGnwNIigu2 $MJNA $TGT $HAL $NA.TO #MJNA #stock #pennystocks
28 Nov 15 05:42:18
HAL Halliburton Co. Day High https://t.co/wYvBJNRsJn $HAL $HPQ $TATAMOTORS.IN $EFA #HAL #nasdaq #pennystocks
Trading Quotient
28 Nov 15 05:30:19
Trend Changer Stocks: Uptrend $ADSK $AVP $BBBY $COP $DO $DV $FAST $FLS $FSLR $HAL https://t.co/IIuVT7zgCO
28 Nov 15 03:01:16
Weekly S&P100 #Stocks Performance $TGT $HD $APC $HAL $CVS $AIG $AGN $AMGN $LOW $KMI $PFE $XOM $KO $PM $CVX more@ https://t.co/cKkr8cKsju
Ashley Senn
28 Nov 15 01:35:42
RT @EagleFordShaleP: Oil Rigs Data Are Bad For Halliburton, Schlumberger https://t.co/FH9fyZG9q1 $BHI $HAL $SLB $XOM $BP
Stock Forums
27 Nov 15 21:45:11
NFLX Netflix, Inc. Last Price https://t.co/uiu2bd0W7M $NFLX $HAL $DUST $NPTN #NFLX #stock #stockmarket
IH News Desk
27 Nov 15 21:44:03
NATI National Instruments Corp. Bid Size https://t.co/2z3nb4KZ0w $NATI $GLT $HAL $NBG #NATI #invest #nasdaq
27 Nov 15 21:41:03
HAL Halliburton Co. Dividend https://t.co/luogocqohd $HAL $DFS $DD $LAD #HAL #finance #stockmarket
27 Nov 15 21:36:34
CTRP https://t.co/MA6KRq38NM Intl Ltd. Shares https://t.co/uxgqzAzHWC $CTRP $BAC $HAL $FCX #CTRP #tradeideas #investing
MRX Robot
27 Nov 15 17:57:29
RT ResearchPool: #HALLIBURTON CO Rating and Forecast Report for $HAL https://t.co/3ABt0uGj0y  #mrx #stocks Hallib… https://t.co/o7KG3A70Dm
27 Nov 15 17:55:17
#HALLIBURTON CO Rating and Forecast Report for $HAL https://t.co/i3EXIkttv3 #mrx #stocks @Halliburton https://t.co/RCwIChU4ur
27 Nov 15 17:45:32
NVDA NVIDIA Corp. Short Sales https://t.co/3RpgTfsWE2 $NVDA $CVX $CCXE $HAL #NVDA #share #investing
27 Nov 15 17:43:33
JOY Joy Global Inc. Open https://t.co/QgGjIoxoHw $JOY $AAL $HAL $TAN #JOY #stocks #stockmarket
27 Nov 15 17:41:05
HAL Halliburton Co. Yield https://t.co/ot3DQmeSVf $HAL $SWKS $VLTC $TAN #HAL #tradeideas #nasdaq
Skilled Academy
27 Nov 15 17:35:29
RT @PolgarStocks: COH Coach, Inc. Stock Message Board https://t.co/K3dnZ19zBk $COH $V $HAL $X #COH #finance #tradeideas
27 Nov 15 17:35:03
COH Coach, Inc. Stock Message Board https://t.co/K3dnZ19zBk $COH $V $HAL $X #COH #finance #tradeideas
27 Nov 15 16:39:32
HAL Halliburton Co. Chart https://t.co/qr1rCCIs3e $HAL $AAVL $IBM $HD #HAL #share #stockmarket
27 Nov 15 16:34:33
AXL American Axle & Manufac. Last Trade https://t.co/EfZuePCdp3 $AXL $HAL $INO $MSTX #AXL #invest #investing
27 Nov 15 14:51:11
XLB Materials Select Sector SPDR Last Price https://t.co/tRLBv6j56k $XLB $HAL $AGU.TO $PPLT #XLB #invest #nasdaq
27 Nov 15 14:48:32
UPS United Parcel Service, Inc. Tick https://t.co/sWSVLCW0ts $UPS $ASHR $XOM $HAL #UPS #invest #share
27 Nov 15 14:41:37
HAL Halliburton Co. Last Price https://t.co/vJyh4NyqtD $HAL $AAPL $VRX $VRSN #HAL #stock #tradeideas https://t.co/g2qiIuHcOg
By  +Follow June 18, 2014 8:15AM



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