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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
Investors Hangout
30 May 15 11:49:06
XIV VelocityShares Daily Inverse VIX Short Term ETN Volume http://t.co/1OEWcb0KMq $XIV $HAL $CRUS $C #XIV #invest #tradeideas
Rosner Stocks
30 May 15 11:46:39
TIVO TiVo, Inc. Open http://t.co/zVjGfi1x2O $TIVO $PXYN $HAL $WB #TIVO #investing #finance
30 May 15 11:42:07
NWBO Northwest Biotherapeutics, Inc. Filings http://t.co/f1fcP5MQdU $NWBO $HAL $SPXU $FV #NWBO #investing #finance
30 May 15 11:38:04
HAL Halliburton Co. Day High http://t.co/RPPv2TaoJf $HAL $UNG $UNH $SPHD #HAL #finance #investing
Lucky Jimmy
30 May 15 11:31:35
AKRX Akorn Inc. News http://t.co/AF5zdyEA9U $AKRX $HAL $NXPI $CVX #AKRX #investing #stocks
Rick Fansler
30 May 15 09:26:46
Biggest move in oil prices in awhile but, Oil, N&G and ETF were unresponsive, even neg in many cases, WHY? $LNG $HAL $BHI $EPD $KMI $SE $XLE
Joe Attrux
30 May 15 09:00:18
RT @SeekingAlpha: Compared To Halliburton And Baker Hughes, Schlumberger Looks Expensive http://t.co/ZLaDaOuJJ2 $BHI $HAL $SLB
30 May 15 08:48:01
RT @Bidnessetc: Halliburton, Schlumberger Rated As Overweight By JP Morgan: Here’s Why http://t.co/K1MCbYrHMT $SLB $HAL $WFT http://t.co/Nf…
Bidness Etc
30 May 15 08:46:42
Halliburton, Schlumberger Rated As Overweight By JP Morgan: Here’s Why http://t.co/K1MCbYrHMT $SLB $HAL $WFT http://t.co/NfMVSGLn4d
Stock Market Picks
30 May 15 07:54:09
$CHK $CLF $HAL $PBR $WU $WY $TMUS $TSN $XRX $MS Long and short positions, the easy way to trade #stocks http://t.co/xCKDoFcebO $DIA $QQQ
30 May 15 07:36:05
$HAL $BHI: Halliburton Company (HAL), Schlumberger Ltd Rated As ...: http://t.co/Geg8vtZGWs
FinSentS SP500
30 May 15 07:13:16
$HAL:US Compared To Halliburton And Baker Hughes, Schlumberger Looks Expensive #HALLIBURTON CO http://t.co/PD5Fd8GiWh #SP500
Capital Market Labs
30 May 15 06:19:37
Largest Energy Equipment and Services Operating Margin $SDRL $HAL $NOV Chart: http://t.co/T6PgiSEBMr http://t.co/mvNl8g33nQ
Capital Market Labs
30 May 15 06:07:05
$NOV vs. $WFT vs. $HAL vs. $RIG Compared Across 9 Critical Measures http://t.co/JD3iJhKuWr http://t.co/FGMVvvLpnX
30 May 15 05:46:46
Halliburton Company Coverage Initiated at JPMorgan Chase & Co. $HAL http://t.co/t9nGImIF2O
Breaking News Now
30 May 15 05:38:03
$HAL: Halliburton Company Coverage Initiated at JPMorgan Chase & Co ...: http://t.co/iug7Zcmv9W
Quantpost Basic Mats
30 May 15 05:22:09
$BHI $HAL $SLB News: "Compared To Halliburton And Baker Hughes, Schlumberger…" http://t.co/gdEqRBNNAl Analyze: https://t.co/xymEvn94iK
Seeking Alpha
30 May 15 05:22:08
Compared To Halliburton And Baker Hughes, Schlumberger Looks Expensive http://t.co/ZLaDaOuJJ2 $BHI $HAL $SLB
Capital Market Labs
30 May 15 03:51:17
Largest Energy Equipment and Services Debt Level $SDRL $CLB $HAL $NOV Chart: http://t.co/S57uudITbk http://t.co/y8VzkXJNGd
Capital Market Labs
30 May 15 02:29:03
$SLB vs. $RIG vs. $NOV vs. $HAL Compared Across 9 Critical Measures http://t.co/Dtf1d5qafQ http://t.co/ACNU2qWwye
Capital Market Labs
30 May 15 02:13:23
$SLB vs. $WFT vs. $RIG vs. $HAL Compared Across 9 Critical Measures http://t.co/D1lcXVrthn http://t.co/ON1CMsgdSG
Games forever
30 May 15 00:35:36
Placements financiers - Forex: $CVX $HAL $XOM $IOC Energy http://t.co/eTPnQTki3Q
Games forever
30 May 15 00:33:29
Placements financiers - Forex: $CHK $HAL $XOM #halliburton Energy http://t.co/CUVw4I0iXg
Games forever
30 May 15 00:16:31
Placements financiers - Forex: $HAL $XOM Energy http://t.co/rPE6tLFqyz
Daniel Gillispie
29 May 15 23:41:03
"@CML_VisualFeed: $HAL vs. $BHI vs. $RIG vs. $CAM all about earnings per shadow trades @BillGates
Capital Market Labs
29 May 15 23:24:03
$HAL vs. $BHI vs. $RIG vs. $CAM Compared Across 9 Critical Measures http://t.co/k6KtkfI3v3 http://t.co/v7dggzI3Pp
Scott Spencer
29 May 15 21:12:31
$SSE +3% $5.90 LONG bullish stance on oil/gas services $BAS $NBR $HAL
29 May 15 20:40:27
HALO Halozyme Therapeutics Inc. Stock Forum http://t.co/wcudrRLYQX $HALO $HAL $RSP $XLB #HALO #share #invest
29 May 15 20:40:09
HAL Halliburton Co. Ask http://t.co/p7dYziWCsv $HAL $BRK/B $HOD.TO $XLY #HAL #pennystocks #investing
29 May 15 20:35:04
CTRP http://t.co/LVXlD0YMLi Intl Ltd. Last Price http://t.co/NYn9r1ore6 $CTRP $HAL $INTC $GLL #CTRP #invest #invest
Trade Followers
29 May 15 19:17:00
$HAL was one of the most bullish stocks on Twitter today. https://t.co/UdepHoAbhE
youtube big
29 May 15 18:42:11
RT @AnalystActions: $HAL: Analyst action by JP Morgan on Halliburton: http://t.co/FmNiuxo0PF http://t.co/JJbSZOezuP
Analyst Actions
29 May 15 18:41:02
$HAL: Analyst action by JP Morgan on Halliburton: http://t.co/dY8Us5DKxB http://t.co/LWtyqMLkwu
Investors Hangout
29 May 15 18:39:04
HAL Halliburton Co. Bid Size http://t.co/hslSNnyILZ $HAL $CVX $XLP $CVC #HAL #finance #investing
29 May 15 18:37:15
EGRX Eagle Pharmaceuticals, Inc. Summary http://t.co/O665KkDf6G $EGRX $XOM $ZIOP $HAL #EGRX #tradeideas #stocks
Investors Hangout
29 May 15 17:40:12
JLL Jones Lang Lasalle, Inc. 52Wk Low http://t.co/Y2FAeVMvEw $JLL $SMN $XLI $HAL #JLL #stockmarket #stocks
29 May 15 17:38:04
IDRA Idera Pharmaceuticals, Inc. Yield http://t.co/SMuwyb1Vh3 $IDRA $MNKD $HAL $JNUG #IDRA #stock #stock
29 May 15 17:37:40
HOU.TO Horizons BetaPro NYMEX Crude Oil Bull Plus ETF Ask Size http://t.co/zs3Z8rNgSb $HOU.TO $HAL $HD $CI #HOU.TO #invest #finance
29 May 15 17:37:19
HAL Halliburton Co. Stock Forum http://t.co/nhRUcA9i3v $HAL $RPV $UUP $PFE #HAL #investing #share
29 May 15 17:31:34
AMAG AMAG Pharmaceuticals, Inc. Short Sales http://t.co/6pG49FVRPW $AMAG $HAL $SOXL $XLI #AMAG #investing #stocks
29 May 15 16:01:28
S&P100 #Stocks Performance $LLY $MDLZ $MRK $USD $EBAY $INTC $DOW $PFE $AMZN $OXY $UNH $SO $SBUX $SLB $HAL more@ http://t.co/cKkr8csQUU
29 May 15 15:35:31
$HAL Halliburton Company (HAL) Ex-Dividend Date Scheduled for June 01, 2015 http://t.co/ziWBbvFsoQ
FinSentS SP500
29 May 15 15:31:51
$HAL:US Halliburton Company Now Covered by Analysts at JPMorgan Chase & Co. (HAL) #HALLIBURTON CO http://t.co/Uct81jwIOI #SP500
Clint Pettijohn
29 May 15 14:35:36
@jimcramer not understanding the oil fluctuations and the correlation to stocks like $KMI & $HAL . Could you shed a little light on that?
TheStreet Energy
29 May 15 13:36:05
Halliburton $HAL Stock Helped by Coverage Initiation http://t.co/S6ZsZHK2yr
29 May 15 13:17:02
$HAL: Halliburton (HAL) Stock Helped by Coverage Initiation: http://t.co/mPYZoQ9lr8
Jon Sticha
29 May 15 13:12:31
$HAL : expecting to have news on 1st round asset sales by late summer. Must be a viable 3rd competitor that will not split assets $GE $NOV
Trader Daily
29 May 15 13:10:12
Halliburton $HAL Stock Helped by Coverage Initiation http://t.co/Ptp3UroGvP
TheStreet SpeedDesk
29 May 15 13:10:10
Halliburton $HAL Stock Helped by Coverage Initiation http://t.co/Oh2nVvQnrF
29 May 15 12:59:14
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By  +Follow June 18, 2014 8:15AM



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