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

By  +Follow June 18, 2014 8:15AM
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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.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for hal
Bidness Etc
30 Sep 14 10:21:45
#Schlumberger Pulls Foreign Employees From #Russia http://t.co/qlK3yOFTxe $SLB $HAL
12Stocks.com
30 Sep 14 08:51:39
S&P100 #Stocks Trend $MCD $FDX $SLB $NKE $MO $LMT $EXC $BA $KO $NSC $BMY $HAL $CSCO $FB $EBAY $HD $T $UNP $DVN @ http://t.co/n4QZIDxy7w
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5 Things Halliburton Company's Management Wants You to Know (HAL) . $HAL. http://t.co/X8QGU5iFOA
crypto loser
30 Sep 14 06:12:42
Picked up some $RUBLE @ 2k, $VIA @ 24k, $HAL @ 15k, $VRC @ 12.5k, and $SHADE @ 600. Hoping the market will pickup soon.
Mauricio Fernandes
30 Sep 14 05:58:54
RT @Cryptoholic11: Bear market, perfect time to stack up on some cheap #alts with great dev teams $SFR $SDC $VRC $ICG $BC $NMB $APEX $IOC $…
Vericoin Community
30 Sep 14 05:37:11
RT @Cryptoholic11: Bear market, perfect time to stack up on some cheap #alts with great dev teams $SFR $SDC $VRC $ICG $BC $NMB $APEX $IOC $…
Surestrike
30 Sep 14 05:36:30
RT @Cryptoholic11: Bear market, perfect time to stack up on some cheap #alts with great dev teams $SFR $SDC $VRC $ICG $BC $NMB $APEX $IOC $…
Cryptoholic
30 Sep 14 05:34:57
Bear market, perfect time to stack up on some cheap #alts with great dev teams $SFR $SDC $VRC $ICG $BC $NMB $APEX $IOC $HAL $GB
12Stocks.com
30 Sep 14 03:01:36
Weekly S&P100 #Stocks Trend $NKE $FDX $MCD $SLB $MO $LMT $BA $KO $EXC $NSC $HAL $BMY $CSCO $FB $HD $EBAY $UNP @ http://t.co/n4QZIDxy7w
12Stocks.com
30 Sep 14 03:01:18
Weekly S&P100 #Stocks Performance $NKE $FB $FDX $MCD $GILD $SLB $MO $HAL $LMT $HD $DOW $SBUX $ACN $DD $APC more@ http://t.co/n4QZIDxy7w
Eric Kittell
29 Sep 14 23:37:03
looks like some established coins are dropping to levels not seen in weeks, $HAL, $PINK, etc...
12Stocks.com
29 Sep 14 16:01:37
S&P100 #Stocks Trend $MCD $FDX $SLB $NKE $MO $LMT $EXC $BA $KO $NSC $BMY $HAL $CSCO $FB $EBAY $HD $T $UNP $DVN @ http://t.co/n4QZIDxy7w
Aaron Thomas
29 Sep 14 14:21:42
@BTCarchitect $NAUT, $XMR , $VIA , $HAL , $JBS , $SDC ...
L_Ron_Fuddard
29 Sep 14 12:50:10
$UTIL moving at lightspeed, $HAL took days to reach this market valuation. Expect to see @FontasPumps and @_pr0m3theus_ plugging this hard.
Daily Contracts
29 Sep 14 11:37:01
Real-Time feed of company contracts, original agreements and executive updates from Halliburton $HAL http://t.co/BWYYsvGZaH
kennystoppe
29 Sep 14 10:54:08
RT @AltCryptoGod: Who bought $SSD on the last dip? #soniccoin #SSD #sonic to the moon, just leaving orbit!!! #BTC #BTCD #LTCD $XST #BC $HA…
enrico vecchione
29 Sep 14 10:04:40
crypto blue chips? $LXC $BC $HAL They are here to stay.
enrico vecchione
29 Sep 14 10:03:18
Take a look at new web site and amzing roadmap. Great coins mean great profits http://t.co/owTowF7aEU $HAL #Halcyon #halcyoncoin
INVEX Banco
29 Sep 14 10:00:15
Acciones de $HAL (servicios petroleros), estarán disponibles en el SIC de la #BMV; títulos tendrán un precio estimado de $852.00 por papel
AltCryptoGod
29 Sep 14 09:51:12
Who bought $SSD on the last dip? #soniccoin #SSD #sonic to the moon, just leaving orbit!!! #BTC #BTCD #LTCD $XST #BC $HAL #dogecoin #LXC
J R
29 Sep 14 08:43:43
if @moolah_io is right this time.. Be aware of $HAL $IOC $LXC $SDC $XST they will enter in the new @MintPalExchange in less than 5 days
Trading Advantage
29 Sep 14 08:30:20
Open Postion: $HAL $BA $WYNN $LVLT #Stocks to Watch: http://t.co/IQicH7BPRw
Navin
29 Sep 14 07:17:12
RT @NukMark: Update, Halcyon Beta Website http://t.co/OpfZJ1pJLI #halcyoncoin #HAL $HAL
RB Trader
29 Sep 14 07:00:58
BIG Trade #4 FRI 11,000 $SLB NOV $105 #Calls BOT @ $3.05 vs 3,374 OI $3,355,000 value #tweet 4 a demo http://t.co/21q1m2iCXL $HAL $CVX
RB Tech Social
29 Sep 14 07:00:58
BIG Trade #4 FRI 11,000 $SLB NOV $105 #Calls BOT @ $3.05 vs 3,374 OI $3,355,000 value #tweet 4 a demo http://t.co/uWk1HkLTim $HAL $CVX
CryptoRacer
29 Sep 14 06:10:33
RT @NukMark: Update, Halcyon Beta Website http://t.co/OpfZJ1pJLI #halcyoncoin #HAL $HAL
Clair Voight
29 Sep 14 06:00:51
$HAL Deepwater Business Would Propel Halliburton Upwards (HAL) http://t.co/TY01TQa0tn
Crypto Matt
29 Sep 14 05:05:59
@HalcyonDev Great work $HAL! #Halcyon #awesome #bitcoin #cryptocurrency
NukeMark
29 Sep 14 04:41:51
Update, Halcyon Beta Website http://t.co/OpfZJ1pJLI #halcyoncoin #HAL $HAL
JP Morgains
29 Sep 14 00:55:57
RT @RaginCajun: Weekend Top 100 | http://t.co/Q3Wqayfm0Q $DECK $WRES $HBI $TSCO $TOT $CF $NSC $GPRE $WNR $FDX $RES $PNR $GPOR $PTEN $TSO $B…
gordon gekko is god
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Growth Opportunities For Schlumberger... Why Its Shares Are Cheap And Worth A Look Now http://t.co/7DYAaDcfI4 $SLB, $BHI, $HAL
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28 Sep 14 10:55:44
Strong stock of last friday $Mu $nke $clvs $jns $hal $lll $lmt
TV_Trading Ideas
28 Sep 14 09:39:00
HAL $HAL http://t.co/867GQxgGl8
Kym L
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$HAL Weekly https://t.co/08MeTqI8pg
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28 Sep 14 08:43:40
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28 Sep 14 07:59:16
BIG Trade #4 11,000 $SLB NOV $105 #Calls BOT @ $3.05 vs 3,374 OI $3,355,000 value #tweet 4 a demo http://t.co/21q1m2iCXL $HAL $CVX
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BIG Trade #4 11,000 $SLB NOV $105 #Calls BOT @ $3.05 vs 3,374 OI $3,355,000 value #tweet 4 a demo http://t.co/uWk1HkLTim $HAL $CVX
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28 Sep 14 06:52:47
RT @SeekingAlpha: Growth Opportunities For Schlumberger... Why Its Shares Are Cheap And Worth A Look Now http://t.co/rVz44L405H $BHI $HAL $…
awolam
28 Sep 14 03:35:57
RT @SeekingAlpha: Growth Opportunities For Schlumberger... Why Its Shares Are Cheap And Worth A Look Now http://t.co/rVz44L405H $BHI $HAL $…
michael
28 Sep 14 03:32:46
Growth Opportunities For Schlumberger... Why Its Shares Are Cheap And Worth A Look Now http://t.co/VVEY7qZmki $BHI $HAL $SLB"
Quantpost Basic Mats
28 Sep 14 03:31:10
$HAL News Alert: http://t.co/hcv9KvukuB Updated options view: https://t.co/ltEMfJ0yrp All options views: https://t.co/OmDYbXnHv6
Seeking Alpha
28 Sep 14 03:31:05
Growth Opportunities For Schlumberger... Why Its Shares Are Cheap And Worth A Look Now http://t.co/rVz44L405H $BHI $HAL $SLB
Forex Robot
28 Sep 14 03:18:58
RT @SeekingAlpha: Cramer's Lightning Round - I'm Cool On Marathon Oil (9/26/14) http://t.co/5iYTBXAUju $SWKS $BWLD $WPG $TTWO $ECL $HAL $MR…
Quantpost Basic Mats
28 Sep 14 03:14:11
$HAL News Alert: http://t.co/s7uJjG95vu Updated options view: https://t.co/joE4rWJrW4 All options views: https://t.co/OmDYbXnHv6
Seeking Alpha
28 Sep 14 03:14:05
Cramer's Lightning Round - I'm Cool On Marathon Oil (9/26/14) http://t.co/5iYTBXAUju $SWKS $BWLD $WPG $TTWO $ECL $HAL $MRO $MGM $INVN
ej meltzer
27 Sep 14 16:44:41
RT @RaginCajun: Weekend Top 100 | http://t.co/Q3Wqayfm0Q $DECK $WRES $HBI $TSCO $TOT $CF $NSC $GPRE $WNR $FDX $RES $PNR $GPOR $PTEN $TSO $B…
RC
27 Sep 14 16:38:24
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Dan
27 Sep 14 14:13:29
$HAL OI for maturity 09/26/2014. 67.00 Highest put. 69.50 Highest call. http://t.co/mSWMuRRxTq
Dan
27 Sep 14 14:00:12
$HAL Max Pain is 67.00 for maturity 09/26/2014. Last close = 65.88. http://t.co/Pl1Y2q31PI
Aaron Thomas
27 Sep 14 10:28:02
$HAL was a dump last night and a slow pump today. Waiting for it to go parabolic Making great returns right now!
				
				
By  +Follow June 18, 2014 8:15AM
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