Iraq Minister: Shale to Have Minimal Effect on Oil Demand

Iraq Minister: Shale to Have Minimal Effect on Oil Demand

VIENNA - Rising U.S. shale oil production will have only minimal effect on demand for crude oil from the Organization of the Petroleum Exporting Countries, meaning most members of the group want to leave their output ceiling unchanged at 30 million barrels a day, said Iraqi Oil Minister Abdul Kareem Luaiby Thursday. 

OPEC members will discuss the selection criteria for choosing a new Secretary General at its meeting Friday and Iraq's candidate for the job, Thamer Ghadban, is still standing, Mr. Luaiby told reporters at a briefing in Vienna. 

Iraq will continue to increase its oil production to 3.525 million barrels a day by the end of this year, compared with 3.125 million barrels a day currently, Mr. Luaiby said. 

As part of talks aimed at lowering Iraq's long-term oil output target, but prolonging the period of highest production, the Iraqi government has agreed with Italian oil company Eni SpA to reduce the output target for the Zubair oil field to 850,000 barrels a day, from 1 million barrels a day previously, he said.

Copyright (c) 2012 Dow Jones & Company, Inc.


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Philippe | Jun. 1, 2013
Will the shale oil and gas production affect the world demand, and from OPEC in particular? OPEC needs are not only economics but political. What does this means? It is a fact that most OPEC members rely, more than not, of the revenue of its O&G production for its budgets. OPEC member do not have much to offer aside from oil or gas. These budgets find themselves, at the end of the chain, in the hand of a citizenry with little or no means to earn a living. Most of the OPEC members need O&G revenue for keeping the political stability. The responsible members of OPEC are keeping the price of oil as high as possible to maintain a study demand without putting undo pressure on the oil demanders’ economy. Presently most oil or gas demanders’ economies are in recession, it is not in the interest of OPEC members to raise the oil price. On the other hand, the population increase, in certain OPEC members, requiring more revenue, can bear on the price of oil. So far the new oil or gas caused by shale has not reach a competitive production to OPEC own production. Some OPEC members are investing heavily in divers field, to survive the approaching “after oil” economy. I would advance that this “after oil” economy is not what the average population understand. It is the inability of OPEC to sale O&G with sufficient profits, meaning a stable political government.


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