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Who Is To Blame For The Global Oil Supply Glut In Charts (Hint: Not Iran)

Tyler Durden's picture




 

When crude oil decidedly broke its recent support level, and slid right back into the $40-handle range which served as a springboard for the dead oil bounce earlier this year, many blamed the imminent surge of Iran oil deliveries for as a the downside catalyst. The reality, however, is that a long time will pass before significant Iran oil may flood developed markets, and yet even without Iran oil the market has recently seen a surge in supply and production over the past few months - it is this sudden oil glut that has been the true driver of most recent slide in prices.

But who is the culprit? We present the answer on the following several charts showing oil exports from both OPEC and non-OPEC oil producing countries. Note that Iran has gone exactly nowhere - it is "others" who are to blame for the most recent downturn in oil prices.

 

What about non-OPEC production: despite speculation that the US production is peaking (and Saudi Arabia is winning), US production is virtually at its all time highs.

 

So with everyone is overproducing, is global oil demand rising? Nope. In fact, while everyone knows that the US has just a modest oil "glut", this has moderated in recent months, but as the highlighted chart the oil glut across the entire OECD region has never been greater.

 

End result? This:

Absent either a dramatic slowdown in oil production, mostly by Saudi and Iraq, (where we hope the marginal producer is not ISIS) or a just as dramatic surge in oil consumption (now that the world is rapidly running out of places to store drilled oil) the price is going lower.

 

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Mon, 07/27/2015 - 14:19 | 6359737 lo574
lo574's picture

Completely agree.

Mon, 07/27/2015 - 14:31 | 6359780 Publicus
Publicus's picture

The vast Earth is producing abiotic oil at a far faster rate than we puny humans can consume.

Mon, 07/27/2015 - 14:33 | 6359793 Stackers
Stackers's picture

Some % changes puts it into perspective.

From 2013 to 2015

Saudi increased production - 10%

US increased production - 40%

 

Mon, 07/27/2015 - 14:38 | 6359814 nink
nink's picture

Blame Canada

Mon, 07/27/2015 - 16:40 | 6360261 iClaudius
iClaudius's picture

Simply showing percentages indicates nothing, only if they start from the same base. If Saudi starts from 100,000 barrels and the US from 1, then a 10% increase from Saudi makes a 40% increase from US irrelevant.

Mon, 07/27/2015 - 19:24 | 6360796 Sages wife
Sages wife's picture

One of the many reasons that this article is ridiculous, and not worthy of ZH.

Mon, 07/27/2015 - 15:08 | 6359920 Cloud9.5
Cloud9.5's picture

Can't wait until Alaska and the North Sea are refilled.

Mon, 07/27/2015 - 15:23 | 6359982 Rockatanski
Rockatanski's picture

i read somewhere that the wells in the Gulf that have been shut down are refilling.

Mon, 07/27/2015 - 15:29 | 6360003 stacking12321
stacking12321's picture

and i read somewhere that paul krugman filed for bankruptcy:

http://dailycurrant.com/2013/03/06/paul-krugman-declares-personal-bankru...

Mon, 07/27/2015 - 15:37 | 6360032 Nobody For President
Nobody For President's picture

Hilarious!

Mon, 07/27/2015 - 16:21 | 6360191 KnuckleDragger-X
KnuckleDragger-X's picture

There's a huge amount of oil under Alaska that we can't drill for, at least until were allowed to start shooting greenies. There's several new discoveries in the North Sea but they'll need at least $80 bbl oil to be worth punching holes. OPEC are trying for "last man standing", but they are getting more unstable every day. Everybody is playing their own game, with their own rules and no clue what they are doing......

Mon, 07/27/2015 - 14:23 | 6359750 robertocarlos
robertocarlos's picture

It was stupid of Canada to allow the oil sands to be developed. Should have saved them for a rainy day.

Mon, 07/27/2015 - 17:07 | 6360386 Arnold
Arnold's picture

Back in the eighties, it was not cost effective by about 25% to extract the sludge from the sands.

I am only mildly curious as to how much they loose per barrel now.

Mon, 07/27/2015 - 17:14 | 6360407 Arnold
Arnold's picture

I like the Iraq bump.

 

 

Maybe we'll get some positive Renminbi flow from the Saddam in a rathole Adventure.

Mon, 07/27/2015 - 19:21 | 6360786 TheRedScourge
TheRedScourge's picture

Well, Suncor turns a profit at about $20 a barrel, so there's that.

 

So, maybe a few things have changed since the 80s?

Mon, 07/27/2015 - 14:23 | 6359752 seek
seek's picture

Both countries who's output is largely by request of the US.

Just like selling $2B of gold in 20 seconds, who increases production into a weak market when you're really sitting on billions and billions of petrodollars? That doesn't make you more money, but it definitely helps manipulate things.

Side note, imagine what the already turned-to-shit US economy today would look like with oil back at $120. TPTB are desperate, regardless if it's trying to hurt Russia or trying to keep this dreamy "recovery" alive.

Mon, 07/27/2015 - 14:24 | 6359755 ted41776
ted41776's picture

why come we still be getting assraped at the pumps?

Mon, 07/27/2015 - 14:39 | 6359817 uhb
uhb's picture

my first guess - taxes?

Mon, 07/27/2015 - 15:37 | 6360015 jcdenton
jcdenton's picture

Ya, this is where we cannot blame big oil:

https://youtu.be/ffHS6sthF7M

Except Angelo had yet to get the memo on fossil fuels ..

Mon, 07/27/2015 - 14:52 | 6359862 OldPhart
OldPhart's picture

Current price in my local area, $3.75/gal, So.California.  States' still making the same Sales Tax rate of 7.5% (and more)+base fees.  State of Commiefornia is the rapist.

Mon, 07/27/2015 - 15:10 | 6359929 TruxtonSpangler
TruxtonSpangler's picture

more than a dollar per gallon is taxes in this part of CA

Mon, 07/27/2015 - 15:17 | 6359957 enforcer92677
enforcer92677's picture

Yeah paying about 3.85 here in Laguna Niguel.

Mon, 07/27/2015 - 15:45 | 6360046 Nobody For President
Nobody For President's picture

$3.70 for regular in Nor CA boonies'.

Party line is that the CA gas refiner in SO Cal, XOM, had a plant fire/explosion, and the CA EPA regs are slowing down the refiner getting back on line during the high demand summer season. And demand is good, if the gas station in Long Beach I am familiar with is any indication - highest gallonage last month in well over a yar.

Mon, 07/27/2015 - 14:26 | 6359759 JustObserving
JustObserving's picture

It's all those countries that are controlled by the US that are increasing production on orders from Washington.

How many months to free oil? Gasoline is 6 cents a gallon in Venezuela today.

Mon, 07/27/2015 - 14:53 | 6359865 Benjamin123
Benjamin123's picture

Few have any money to buy cars in Venezuela so what good is that cheap gasoline? Gasoline is cheap because it is sold at a loss.

Mon, 07/27/2015 - 15:05 | 6359905 Benjamin123
Benjamin123's picture

Socialist irony: In Venezuela only the rich have cars (that is new cars, not counting Ford LTDs). The rich get free gasoline, paid by the public treasury. The poor dont buy any, but pay for it with their taxes.

Not really, the poor dont pay taxes, but they get less bread tossed at them at the circus.

Mon, 07/27/2015 - 16:12 | 6360150 koncaswatch
koncaswatch's picture

Socialism growth: Chavez went all over the Caribbean selling a scheme by which Venezuelan refined fuels are sold at a cheap price and as a loan. Part of the fuel purchases by the participants is financed at 1%, "to further the capability of the participants to meet the needs of their people".

Now you have banana republics loaning themselves money in an endless growth of socialistic BS at the expense of the participant's taxpayers. Recently Venezuela sold some of these "loans" for cash to keep their own brand of socialism going. Guess who bought the loans.... The Vampire Squid, yup good ole Goldman Sachs. Now these countries are beholden to the tribe.

Mon, 07/27/2015 - 16:37 | 6360234 Benjamin123
Benjamin123's picture

When i was a kid no one paid taxes in Venezuela. There was no sales tax that i was aware of, and from what i can remember it was common knowledge that the state funded itself selling oil.

I wonder if they have property taxes or if they are enforced. The latifundia (one rich family owning half the country land, while producing nothing) would not be possible with property taxes. What is Ted Turners secret anyway?

PD: When i was a kid the Bolivar currency notes said "Payable in gold at the banks offices". Lol.

http://k44.kn3.net/96BB155E5.jpg

PD: "Pagaderos al portador en las oficinas del banco". My bad, doesnt say anything about gold. I only have the memories of my parents telling me they were meant to be paid in gold, you could cash your notes, until "they" said not anymore.

Mon, 07/27/2015 - 14:26 | 6359765 saints51
saints51's picture

Wouldn't that be a spectacle if ISIS was found to be the reason for Iraq. I would love to say " If you are driving to work, you support ISIS. You do know that plastic is made from oil must make you an ISIS supporter. Imagine the fun we could have with this.

Mon, 07/27/2015 - 14:28 | 6359776 knukles
knukles's picture

It's those fucking electric cars, I tell ya!

Mon, 07/27/2015 - 14:31 | 6359789 debtor of last ...
debtor of last resort's picture

The oil industry is insolvent.

Mon, 07/27/2015 - 15:12 | 6359936 ParkAveFlasher
ParkAveFlasher's picture

Slick thinking.

Mon, 07/27/2015 - 14:33 | 6359794 Lumberjack
Lumberjack's picture

Statoil has decided to suspend Scarabeo 5 due to overcapacity in its rig portfolio.

http://www.statoil.com/en/NewsAndMedia/News/2015/Pages/01July_suspension...

Mon, 07/27/2015 - 14:33 | 6359797 Jason T
Jason T's picture

good, I can burn oil for heat Vs just wood.  

Mon, 07/27/2015 - 14:46 | 6359845 Dr. Engali
Dr. Engali's picture

Bush's fault.

Mon, 07/27/2015 - 14:47 | 6359848 Sanity Bear
Sanity Bear's picture

Everyone is stockpiling for the coming world war.

Mon, 07/27/2015 - 14:57 | 6359872 Ms No
Ms No's picture

Am I reading this right, OPEC opens the spigots and it leads to an increase of about 1.7 mmbld, primarily out of SA and Iraq?  The US consumes that before breakfast.  Interesting which countries are pulling these shenanigans.   Will also be interesting to see how long this continues.

Mon, 07/27/2015 - 21:18 | 6361218 Wild Theories
Wild Theories's picture

it was not OPEC who opened the spigot, it was the US that increased its oil production more than anyone else

Mon, 07/27/2015 - 15:12 | 6359935 Cloud9.5
Cloud9.5's picture

Look at this chart in retail sales and you might notice a trend.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=A103600001&f=M

Mon, 07/27/2015 - 15:14 | 6359940 roadhazard
roadhazard's picture

"Sheiks" of All nations will eventually have the same attitude as the coal mine CEO. Get what you can now.

Motors that are powered by water are coming. I saw it on YouTube so it's got to be for real.

Mon, 07/27/2015 - 16:18 | 6360183 DutchBoy2015
DutchBoy2015's picture

Motors powered by sun is already happening.   Of course someone with one brain cell wouldn't know that.   I know people who pay ZERO to power their home and car.  

Mon, 07/27/2015 - 17:30 | 6360465 Arnold
Arnold's picture

Gee Butch, you leave out all the the bloated .gov infrastructure and development cost analysis there Post Machine.

Memory loss is indicative of.............. too many drug side effects to mention.

Mon, 07/27/2015 - 15:23 | 6359978 Spungo
Spungo's picture

I don't like the look of that Iraq chart. We should invade Iraq or something.

Mon, 07/27/2015 - 15:55 | 6360093 Youri Carma
Youri Carma's picture

It would be nice to know which of these OECD members exactly are causing this oil glut since a lot of these OECD countries don't produce oil at al?

AUSTRALIA,  AUSTRIA, BELGIUM, CANADA, CHILE, CZECH REPUBLIC, DENMARK, ESTONIA, FINLAND, FRANCE, GERMANY, GREECE, HUNGARY, ICELAND, IRELAND, ISRAEL, ITALY, JAPAN, KOREA, LUXEMBOURG, MEXICO, NETHERLANDS, NEW ZEALAND, NORWAY, POLAND, PORTUGAL, SLOVAK REPUBLIC, SLOVENIA, SPAIN, SWEDEN, SWITZERLAND, TURKEY, UNITED KINGDOM and UNITED STATES.

List of OECD Member countries http://www.oecd.org/about/membersandpartners/list-oecd-member-countries.htm

Mon, 07/27/2015 - 16:04 | 6360117 Benjamin123
Benjamin123's picture

That would be the few countries in your list that do produce oil.

Next question plz.

Mon, 07/27/2015 - 16:48 | 6360324 Youri Carma
Youri Carma's picture

From the top of my head the oil producing OECD members are and correct if I am wrong: CANADA, CHILE, DENMARK, FINLAND, ICELAND, IRELAND, MEXICO, NEW ZEALAND, NORWAY, UNITED KINGDOM and UNITED STATES.

But then the question: Who are the biggest oil producers? From my questimation CANADA, MEXICO, NORWAY and UNITED STATES.

Current Output of Global Top Ten Oil Producers http://blogs-images.forbes.com/gauravsharma/files/2014/12/Global-Top-10-...

Source: http://www.forbes.com/sites/gauravsharma/2014/12/24/supply-correction-wi...

Mon, 07/27/2015 - 17:47 | 6360507 Benjamin123
Benjamin123's picture

Didnt know Chile, New Zealand or Finland produce oil.

Mon, 07/27/2015 - 20:01 | 6360906 Youri Carma
Youri Carma's picture

Indeed Finland doesn't produce any oil but refines crude oil acquired from the market so not significant. Chile and New Zealand oil production is also too insignificant to mention I guess.

Finland became an oil country http://www.helsinkitimes.fi/business/9276-finland-became-an-oil-country.html

Sharp lift expected in NZ oil production http://www.stuff.co.nz/business/industries/10568719/Sharp-lift-expected-in-NZ-oil-production

Chile Oil - production http://www.indexmundi.com/chile/oil_production.html

Mon, 07/27/2015 - 19:35 | 6360834 Reichstag Fire Dept.
Reichstag Fire Dept.'s picture

Bakken Shale Oil and other fields have come on stream in the US and the US has seen a massive growth in production with the advent of Frac'ing. Those other countries including my very own Canada have not increased production to the extent the Americans have.

I can tell you first hand the slowdown in the Canadian oilpatch has been dramatic, including but not limited to the election of a VERY socialist provincial government in Alberta...imagine Texas electing a Socialist government right now...

Mon, 07/27/2015 - 19:59 | 6360926 Youri Carma
Youri Carma's picture

Yep, "Credit defaults will be coming!" FROM: What’s happening to oil and how that will affect Canada https://www.youtube.com/watch?v=RZWd6MDygxA

Mon, 07/27/2015 - 16:23 | 6360200 Manipuflation
Manipuflation's picture

Has anyone here ever done a fuel bank account?  I have not done one and I don't like the looks of these pre-pay prices at the one near me.  It is not that they are that far off in price for a lock-in but I am not sure that I see the savings at this point in the year.

Mon, 07/27/2015 - 16:30 | 6360231 hardcleareye
hardcleareye's picture

"Absent either a dramatic slowdown in oil production, mostly by Saudi and Iraq,..."  WTF!!!!!!

Lets see if we can read the charts and ADD!!!!!!.....duhhhhh

delta Saudi from 2013 to 2015     say 9.3 to 10.4  increase of 1.1 approx

delta Iraq from 2013 to 2015             3.25 to 4.35  increase of 1.1 approx

add the two together Saudi and Iraq equals 2.2... roughly (you can get more precise data from Ron Patterson's site.. broken down further etc. etc.... )

So what did the US do

delta for US from 2013 to 2015  7.3 to 9.3 total of 2... approx

 

What Crap!!!  Really Tyler??? 

Mon, 07/27/2015 - 23:28 | 6361654 Mongoose
Mongoose's picture

I believe the author is operating on the premise that Saudi Arabia can reduce production with the stroke of a pen while countries with, ahem, "free markets" can not.

 

Back to killin' snakes...

Mon, 07/27/2015 - 19:26 | 6360808 Reichstag Fire Dept.
Reichstag Fire Dept.'s picture

With Obama's "Energy Independence Program" and his idea of becoming a net exporter of oil it's hard not to see that US oil production is the over production that has crashed the price. 

Who does Obama want to export oil to?? Saudi Arabia?! 

Also, the US buying foreign oil was a key method of introducing US dollars to the global economy to be used as the world reserve currency. Energy independence would limit this proliferation of the greenback. Is it any wonder there is and AIIB or BRICS Bank as a result of this US$ shortage abroad?

Mon, 07/27/2015 - 20:46 | 6361072 erk
erk's picture

Typical tricks with charts, change the vertical axis scale on each chart so the one you want to highligh has a steeper gradient.

If you actually read the data, you will see the US is responsible for the biggest increase in oil production, from 7.0 to 9.7mill bbl since the start of 2013, in the same period the total for OPEC went from 30.4 to 32mill bbl, clearly beaten by the US, although the author of the article tries to make it look the opposite by adjusting the graph scales.

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