Oil and gas prices set for possible volatility

RUSSIA / FSU POLITICS - In Brief 01 May 2019 by Alex Teddy
At the Belt and Road Forum it was announced that 30% of Novatek's Arctic LNG will go to Total, a CNPC subsidiary and CNOCC. These three companies will get 10% apiece. Total's share was known before the forum. Novatek's Arctic LNG will therefore be mostly Russian owned. Saudi Aramco had hoped to buy 30%. The US is not extending sanctions waivers for importers of Iranian crude. Washington is ratcheting up economic pressure on Tehran. Saudi Arabia's energy minister stated that his country will not increase production to make up for the less of Iranian oil on the market. Indeed the Saudis are prolonging the current production agreement with OPEC+ until the end of 2019. OPEC+ includes Russia. Putin is lobbying the Saudis to do so. Limiting oil supply means a bonanza for Russia. Around 2008 oil prices were sky high and Russia was awash with cash. In the late 80s oil prices were rock bottom and the Soviet economy almost collapsed. Russia would like to keep Saudi production down but can exert little influence on them.Oil prices rose sharply last week when Washington announced the Iran oil waivers were being terminated. However, oil prices have dipped back to near where they were before the announcement. There is plenty of West Texas Intermediate crude on the market which has kept oil prices in the US from rising much. The Saudis are hoping production in Libya and Venezuela will not stall. This is a gamble bearing in mind General Haftar looks poised to overthrow the government there. Gen Haftar is backed by Russia and the US. In Venezuela the Western backed opposition leader Juan Guaido has called on the army to oust the president. Venezuelan production is likely to suffer. The...

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