The month of May cannot come soon enough. There has been much speculation as to what the fate of this OPEC deal is to be, but more and more members of the cartel are voicing support for further cuts. Iraq has been the most recent OPEC member to voice its compliance and support for the cut. Currently, Iraq is boasting a 98 percent compliance toward the deal and the nation’s oil minister, Jabar al-Luaibi, says that the deal “contains many positive elements and achieved a lot of targets; work is ongoing to reach the reduction of 1.8” million barrels per day (bpd) agreed by OPEC and 11 other nations (including Russia) for their combined production in the first half of 2017.
What about the second half of 2017 for Iraq though? One potentially large factor that could derail a second production cut, for the second largest OPEC member behind Saudi Arabia, is Iraq’s plans to advance forward with increasing its reserves by 15 million barrels in 2018. This would be done by carrying on with projects of exploration to increase production to 5 million barrels per day before the end of 2017. Iraq’s current output stands at 4.464 million barrels per day and average exports were right at the 3.756 million barrels per day in March. Iraqi new exploration and increasing production is the worst enemy of a second OPEC production cut in 2017.
Last week there was a big step in the right direction for the U.S. to embrace its fate of an oil driven energy market. President Trump signed the approval for the Keystone XL pipeline and took care of what was needed on the federal level. Granted, this is just one of the many steps required to get this pipeline on track, but it was majorly road blocked for nearly a decade by the Obama administration. Breaking Energy reports that API President and CEO Jack Gerard said, “Today’s action to approve the Keystone XL pipeline’s cross-border permit is welcome news and is critical to creating American jobs, growing the economy, and making our nation more energy secure… Approval of this project is an important step to recognizing the benefits that come from U.S. energy infrastructure… Moving forward, we strongly urge the individual states, which stand to benefit from the Keystone XL pipeline, to approve this important project.”
The hard facts about this pipeline and the impact it could have are:
- Keystone XL pipeline could produce roughly 42,000 jobs during the construction phase
- Generate more than $2 billion in employee earnings
- Contribute roughly $3.4 billion to the U.S. economy
The U.S. would benefit from further strengthening trade with Canada and making the transport of crude that much safer when importing from Canada, which is our largest source of crude imports. One of the main criticisms of the pipeline was safety/environmental impact but, according to the Pittsburgh Tribune review, “Incessant Keystone XL criticism is not credible when pipelines have a proven safety record and are considerably less risky than moving petroleum by rail through populated areas.” The final steps for this pipeline are getting through the state approvals and environmental group lawsuits but the first major hurdle of getting it through the federal ranks has passed, and that is a big step forward for this project.