Scraping the Barrel… 2 August 2012
As today’s barrel scrapings reveal: the Russians join the crown snubbing Baghdad for the KRG, sanctions bite in Iran, and a gloomy outlook for the world’s oil majors. See below the fold for more…
Another day, another warm hand shake and another IOC piles into the Kurdistan region of Iraq, to the chagrin of the Baghdad government. This time it is Russian Gazprom following where Exxon and Total have already trodden , signing two contracts with the region’s semi-autonomous government, and putting their investments in Badra at risk. The new agreement makes the KRG’s recent initiative to ‘repair ties’ with Baghdad sound like little more than empty words. Could these companies, as Steve LeVine would have it, become an unintentional fifth column in Kurdistan’s march toward economic autonomy? Has Baghdad already lost Kurdistan?
A tale of two cities. In Washington it would appear Obama’s risks are paying off so far, with US-led sanctions biting and are calculated to be costing the producer country $133 million a day in lost sales. As US elections near, low fuel prices may well translate into votes, as the dreaded spike in oil prices predicted by many has not come to pass, with a little help from hydrocarbon power-house Saudi Arabia. Meanwhile in Tehran shipments have fallen by 52% since the 1 July, making a dent roughly equivalent to 10% of Iran’s economy. Daily life Iran for ordinary Iranians has also been hit hard by spiralling prices for staples such as bread and rice, and an unemployment rate reaching 13.5%
To check out previous news roundups, see the Scraping the Barrel series.