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The Biggest Threat To Oil Prices: 2-Mile Long Stretch Of Iraq Oil Tankers Headed For The U.S.
After some initial excitement, November has seen crude oil prices collapse back towards cycle lows amid demand doubts (e.g. sllumping China oil imports, overflowing Chinese oil capacity, plunging China Industrial Production) and supply concerns (e.g. inventories soaring). However, an even bigger problem looms that few are talking about. As Iraq - the fastest-growing member of OPEC - has unleashed a two-mile long, 3 million metric ton barrage of 19 million barrel excess supply directly to US ports in November.
Crude prices are already falling:
But OPEC has another trick up its sleeve to crush US Shale oil producers. As Bloomberg reports,
Iraq, the fastest-growing producer within the 12-nation group, loaded as many as 10 tankers in the past several weeks to deliver crude to U.S. ports in November, ship-tracking and charters compiled by Bloomberg show.
Assuming they arrive as scheduled, the 19 million barrels being hauled would mark the biggest monthly influx from Iraq since June 2012, according to Energy Information Administration figures.
The cargoes show how competition for sales among members of the Organization of Petroleum Exporting Countries is spilling out into global markets, intensifying competition with U.S. producers whose own output has retreated since summer. For tanker owners, it means rates for their ships are headed for the best quarter in seven years, fueled partly by the surge in one of the industry’s longest trade routes.
Worst still, they are slashing prices...
Iraq, pumping the most since at least 1962 amid competition among OPEC nations to find buyers, is discounting prices to woo customers.
The Middle East country sells its crude at premiums or discounts to global benchmarks, competing for buyers with suppliers such as Saudi Arabia, the world’s biggest exporter. Iraq sold its Heavy grade at a discount of $5.85 a barrel to the appropriate benchmark for November, the biggest discount since it split the grade from Iraqi Light in May. Saudi Arabia sold at $1.25 below benchmark for November, cutting by a further 20 cents in December.
“It’s being priced much more aggressively,” said Dominic Haywood, an oil analyst at Energy Aspects Ltd. in London. “It’s being discounted so U.S. Gulf Coast refiners are more incentivized to take it.”
So when does The Obama Administration ban crude imports?
And now, we get more news from Iraq:
- *IRAQ CUTS DECEMBER CRUDE OIL OSPS TO EUROPE: TRADERS
So taking on the Russians?
* * *
Finally, as we noted previously, it appears Iraq (and Russia) are more than happy to compete on price.. and have been successful - for now - at gaining significant market share...

Even as both Iran and Saudi Arabia are losing Asian market share to Russia and Iraq, Tehran is closely allied with Baghdad and Moscow while Riyadh is not. That certainly seems to suggest that in the long run, the Saudis are going to end up with the short end of the stick.
Once again, it's the intersection of geopolitcs and energy, and you're reminded that at the end of the day, that's what it usually comes down to.
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are we sure there is oil in those tankers and not Syrians, Afghanis, Bangledeshis getting a free ride to come join the Free Shit Army?
Syrians n afghanis are headed to eu to join their FSA
Let's use this tech on those ships and see what lies within.
http://www.dailymail.co.uk/news/article-3312570/Two-men-arrested-police-...
Oil tankers are about 1200-1500 ft long. So what, 8-10 tankers?
So if each tanker held a million barrels (which I doubt), it would be barely 40% of one day.
What happend to twilight in the desert Matt Simmons. ,running out of oil and all.
The latest laugh is that the elties are doing this to "punish " the Russians.
Man Ive lost a bundle on pessimissim porn.
"What happend to twilight in the desert Matt Simmons"
Matt Simmons is dead.
Not oil, Syrian "refugees"
In an unrelated article, Escalade sales are up.
But, what about peak oil?
Or, it's West Virginian cousin/husband/mother, peak cheap oil?
All that extra oil got me thinking back to the 50s, because, ya know, a little dab'll do ya!
https://youtu.be/aQBtw6nqFxY
Amazingly, Unilever still makes and sells Brylcreem.
Crude oil, a little dab'll do ya
Use more only if you dare
But watch out, the Arabs will pursue ya:
They'll love to get their fingers in your hair
Before they cut off your head.
So in other words, oil should've never gotten so fucking high to begin with. Instead of relishing the cheap gas, need to get off our asses and make 100mpg+ cars, or cars that use none at all that don't cost $100k and blow up, and fuck the oil morons forever.
Bush was right, Kill Saddam and cheap oil would be plentiful.
Queue the typhoons and hurricanes!
The economic red flags are so abundant that virtually all 12 charts I analyze in detail scream oh shit.
ChargingHandle, please elaborate. I'd be interested in seeing your Dirty Dozen.
What if the first ship explodes? Do they all go next like Chinese fireworks?
nice +1000
Gas in Lafayette la was 1.79 yesterday morning
Way home tanker truck
Sign went to 1.99
Easy solution
Call it a threat and put those shiny new F-35s to good use
kamikaze mission?
"I'm Paul Krugman and I approve this high-tech solution"
Against unarmed tankers with no air support, they just might be able to pull it off.
Or send one A-10 Warthog...
Such is supply side economics, and the world has been living with it for thousands of years, so deal with it. Eventually the cycle will come full circle and excess supply will taper off and price will stabilize. the strong will survive and the weak will perish. the bad investments will be lost and the good investments will thrive and grow to lead economies back to strength. Only when intervened with by larger powers such as short sighted governments who are under contract from massive financial influences, do these laws of economics become artificially warped and out of balance.
On another note, I've read a lot of comments here and many of you for some reason think these tankers of oil coming to the US is a bad thing. Why is that? We're all consumers here, or I believe we are. Each and every one of us benefits up and down the line from cheap oil, from the gas we put in our cars to the food on our table. The only people who may not benefit from declining oil prices are 1) oil companies who are forced to hedge and 2) BANKS, who have loaned money on an asset of particular value and are now under water on those loans.
..... Whatever, gasoline was $1 a gallon and all the debt was measured in billions a few years ago. The "bad thing" has almost nothing to do with oil or supply side.
Its CORRUPTION and its out of control.
Isn't drone delivery more cost effective?
STIHIB
Submission To Islam Has Its Benefits
The US needs to takeout its former ally Saudi Arabia, that'll correct oil prices, and correct much in the middle east
With approval from the ZH board, may I now have permission to purchase that red Challenger Hellcat I've had my eyes on...?
Are there any more questions about why we invaded in Iraq in 2003?
I'm not laughing with you, I am laughing at you. Yeah, we invaded Iraq so we could destory our own domestic oil industry...gotcha...moron.
Yo needlenose,
Can you smell what's inside my can?
Well, Jug, I'm glad you're laughing at me. If you were laughing with me, I'd be in big trouble.
https://en.wikipedia.org/wiki/Jughead_Jones
What am I doing? Telling Jughead to read about himself in wikipedia.
How ironic. What was it about 40 years ago when the oil embargo hit and the only lines you saw were cars stretching around the block waiting to fill up at the gas station. Now, its tankers lined up waiting to find a buyer for its oil. Not a wait to be had at the local gas station but just the opposite for the oil flowing into the country. My how times have changed.
I remember 40 years ago waiting in long lines to buy gasoline that thankfully had tripled in price in less than a few months. CNN explained that we had nearly run out, so what could they do? I was happy to do my part.
Then I drove to Canuckistan (cheap maple syrup) and there gas was still cheap and there were no lines at all?!? And I thought "Hey, what's going on here?" Well, after all those months, the Canuckistanis hadn't gotten the memo on Peak OilTM.
I called up the police and they straightened Canuckistan right out, and saved what remained of Canuckistan's oil.
It's laughable how ZH had to get in their 2 Roubles worth of positive spin for Father Russia. What do you mean "Iraq (and Russia) are more than happy to compete on price"? Russia absoultely cannot compete on price, it is killing them, that is why the whole country has gone down the toilet. Your beloved leader Putin has just made sure that by entering the middle east quagmire, Russia is going backwards another 20 years.
You're so right. Entering the middle east quagmire sets a country back 20 years.
LOL @ Putin!
This is all BS! I've been trying to purchase 2-4 million barrels of Crude Oil for the last 3 months with zero success and i'm not entirely stupid.
Check eBay or Amazon. The internets are full of oil.
False flag in 3...2...1...
Two miles long?
Big deal, a tanker is 1000 foot long. 10 tankers, 2 miles.they don't do tailgating very well
Beat me to it.
Not seeing a problem here.
19 million barrel excess supply? That gives the ole USA one more day of consumption. Hurrah!
$1.79 in Texas for gas.
Here in the PRK, 91 octane fuel is goddamned $3.13 a gallon.
Moar $$Cash$$ for "ISIS".... The "enemy" ...
I'm picturing the operation of ISIS delousing-"Stube" and barber shop upon arrival of the malcontents.
Wihat I wouldn't give for a phone call right about now from Moscow to the White Chimp in D.C.... "We know that you don't care about human life"... yours, ours, or anybody elses... so I thought I'd give you the ultimate gift that strikes fear in you the most next to the worthless "green shit paper" you keep printing and holding everyone else hostage with!
Blowing up a convoy of tankers filled with oil that you stole!
Paybacks a bitch!!!...
Apache Corp; Share price-$49.17..Earnings per share-Minus $54.96..LOL
Totaling up all the SUCCESS stories of the Neocons and the result is: they better change their name to NEOClowns...
Isn't 2 miles of ships like, 10 of them or something? Not seeing the big deal here.
If you look at the graph in the article, it shows that the Iraqi's can't seem to load tankers regularly. The stuff comes in bursts.
10 tankers every day might be something to worry about, but 10 tankers every six months doesn't warrant a blog post.
19 million barrels sounds like a lot of oil to the clueless clowns who write "news", buts its one day's supply. One day supply sent every six months? And they have to hype this as a big deal?
The headline should read: "No one watching news media again; we are desperate for attention. We need to make up a false crisis to freak people out over nonsense. Film and panic at 11"
Not to worry. Paul Ryan will repeal Obama's "cash for clunkers" and make everyone put clunkers back on the road. Problem solved!
while Russia is in the area and in the air...I believe they see ISIS rebels near iraqi oil wells.... Some well places love bombs, Russia's Oil price problem is resolved...
https://www.youtube.com/watch?v=eAbm01LmpzY
Sure why not. They can't ISIS as it is and the footage of their air campaign would be used as proof that they could hit just about anything -- just not the thing they were aiming for...
Next $30 a Barrell oil and the SPX will continue to fraudulently rise. Thank you PPT, Central banks and the FED with all your printing.
Oh and let's not forget CNBC with all your lies.
With so many tankers - they'll never close the strait of hormuz...
Bullish for the Alberta Real Estate market, cough, cough.
Price of oil has nothing to do with supply and demand of oil itself.
Time for the US to build another Strategic Oil Reserve...buy low and save for a rainy day...
Obama has done the opposite. Obama (and Bush) filled the reserves when WTI was around $100, and (you just can't make this level of stupidity up) -- Obama is now selling oil from the SPR to reduce his spending deficit.
Obama bought oil at $100, and he's selling it around $45. That's Obamanomics in a nutshell.
If you think the Saudi's (or anyone in OPEC) is going to be afraid of Obama ruining their business, think again.
I wonder what reason the oil fraudsters will make up or how many refineries they'll close down for bullshit reasons to keep the price of fuels UP.
America..
A nation built of nested frauds and ponzi schemes.
Well Lubricated, Bitchez.
They hate our freedom
Since there is "excess liquidity " in the oil inventories and we need to stimulate the economy, why not have temporary negative fuel prices, a NFP policy if you will. I'm not sure there wouldn't be a misalloation of resources, but it would reduce inventory and stimulate driving more.
/s
OPEC isn't reducing extraction rates because the won't, it's because they CAN'T.
Iraq's gold looted
Iraq's antiques looted
Iraq's oil looted & more on the way
----
Substitute Iraq with the name of yor country (if u dont have the WMD)
So... that's where ISIS exports its oils?? Uhuh....