Gabon's Top Court Affirms Junta Leader Nguema's Election Win
Gabon's top court said military leader Brice Oligui Nguema won the country's first elections since he overthrew the government almost two years ago.
Nguema garnered 94.9% of the April 12 poll to lead the OPEC-member nation, the Constitutional Court said on Friday. His main challenger, former Prime Minister Alain Claude Bilie-By-Nze got 3.1%, it said. Voter turnout was 70.1%, according to the court.
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Yahoo
12 hours ago
- Yahoo
Analysis-OPEC+ would struggle to cover major Iranian oil supply disruption
By Ahmad Ghaddar and Seher Dareen LONDON (Reuters) -Oil market participants have switched to dreading a shortage in fuel from focusing on impending oversupply in just two days this week. After Israel attacked Iran and Tehran pledged to retaliate, oil prices jumped as much as 13% to their highest since January as investors price in an increased probability of a major disruption in Middle East oil supplies. Part of the reason for the rapid spike is that spare capacity among OPEC and allies to pump more oil to offset any disruption is roughly equivalent to Iran's output, according to analysts and OPEC watchers. Saudi Arabia and the United Arab Emirates are the only OPEC+ members capable of quickly boosting output and could pump around 3.5 million barrels per day (bpd) more, analysts and industry sources said. Iran's production stands at around 3.3 million bpd, and it exports over 2 million bpd of oil and fuel. There has been no impact on output so far from Israel's attacks on Iran's oil and gas infrastructure, nor on exports from the region. But fears that Israel may destroy Iranian oil facilities to deprive it of its main source of revenue have driven oil prices higher. The Brent benchmark last traded up nearly 7% at over $74 on Friday. An attack with a significant impact on Iranian output that required other producers to pump more to plug the gap would leave very little spare capacity to deal with other disruptions - which can happen due to war, natural disasters or accidents. And that with a caveat that Iran does not attack its neighbours in retaliation for Israeli strikes. Iran has in the past threatened to disrupt shipping through the Strait of Hormuz if it is attacked. The Strait is the exit route from the Middle East Gulf for around 20% of the world's oil supply, including Saudi, UAE, Kuwaiti, Iraqi and Iranian exports. Iran has also previously stated that it would attack other oil suppliers that filled any gap in supplies left due to sanctions or attacks on Iran. "If Iran responds by disrupting oil flows through the Strait of Hormuz, targeting regional oil infrastructure, or striking U.S. military assets, the market reaction could be much more severe, potentially pushing prices up by $20 per barrel or more," said Jorge Leon, head of geopolitical analysis at Rystad and a former OPEC official. CHANGE IN CALCULUS The abrupt change in calculus for oil investors this week comes after months in which output increases from OPEC and its allies, a group known as OPEC+, have led to investor concern about future oversupply and a potential price crash. Saudi Arabia, the de facto leader of OPEC, has been the driving force behind an acceleration in the group's output increases, in part to punish allies that have pumped more oil than they were supposed to under OPEC+ agreements. The increases have already strained the capacity of some members to produce more, causing them to fall short of their new targets. Even after recent increases, the group still has output curbs in place of about 4.5 million bpd, which were agreed over the past five years to balance supply and demand. But some of that spare oil capacity - the difference between actual output and notional production potential that can be brought online quickly and sustained - exists only on paper. After years of production cuts and reduced oilfield investment following the COVID-19 pandemic, the oilfields and facilities may no longer be able to restart quickly, said analysts and OPEC watchers. Western sanctions on Iran, Russia and Venezuela have also led to decreases in oil investment in those countries. "Following the July hike, most OPEC members, excluding Saudi Arabia, appear to be producing at or near maximum capacity," J.P. Morgan said in a note. Outside of Saudi Arabia and the UAE, spare capacity was negligible, said a senior industry source who works with OPEC+ producers. "Saudi are the only ones with real barrels, the rest is paper," the source said. He asked not to be named due to the sensitivity of the matter. PAPER BARRELS Saudi oil output is set to rise to above 9.5 million bpd in July, leaving the kingdom with the ability to raise output by another 2.5 million bpd if it decides to. That capacity has been tested, however, only once in the last decade and only for one month in 2020 when Saudi Arabia and Russia fell out and pumped at will in a fight for market share. Saudi Arabia has also stopped investing in expanding its spare capacity beyond 12 million bpd as the kingdom diverted resources to other projects. Russia, the second largest producer inside OPEC+, claims it can pump above 12 million bpd. JP Morgan estimates, however, that Moscow can only ramp up output by 250,000 bpd to 9.5 million bpd over the next three months and will struggle to raise output further due to sanctions. The UAE says its maximum oil production capacity is 4.85 million bpd, and told OPEC that its production of crude alone in April stood at just over 2.9 million bpd, a figure largely endorsed by OPEC's secondary sources. The International Energy Agency, however, estimated the country's crude production at about 3.3 million bpd in April, and says the UAE has the capacity to raise that by a further 1 million bpd. BNP Paribas sees UAE output even higher at 3.5-4.0 million bpd. "I think spare capacity is significantly lower than what's often quoted," said BNP analyst Aldo Spanjer. The difference in ability to raise production has already created tensions inside OPEC+. Saudi Arabia favours unwinding cuts of about 800,000 bpd by the end of October, sources have told Reuters. At their last meeting, Russia along with Oman and Algeria expressed support for pausing a hike for July. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17 hours ago
- Yahoo
Iran Conflict Ensnares Energy as Israel Hits Giant Gas Field
(Bloomberg) -- The unfolding Middle East crisis extended to Iran's energy infrastructure as Israel launched an attack on a giant gas field in the Persian Gulf, threatening further turmoil for markets. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban Do World's Fairs Still Matter? As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space Israel's strike on Saturday triggered a powerful explosion and fire at a natural gas processing facility linked to Iran's giant South Pars field. The hit on the onshore Phase 14 processing plant forced the shut down of a production platform at the field, according to a report from the semi-official Tasnim news agency. The targeting of energy assets represents a new front in the conflict, which erupted on Friday when Israel launched a wave of attacks directed at the Islamic Republic's nuclear program. While the damage to the gas facility may be confined to Iran's domestic energy system, the escalation may nonetheless provoke further swings in oil futures when trading resumes after the weekend. Also read: Israel Extends Iran Airstrikes as Nuclear Talks Called Off The attack heightens the risk to oil infrastructure in Iran, OPEC's third-biggest producer, and to shipments from elsewhere in the region. US crude prices surged as much as 14% on Friday, before settling near $73 a barrel. 'It's going to be pretty significant,' Richard Bronze, head of geopolitics at consultant Energy Aspects Ltd., said of Saturday's attacks. 'We appear to be in an escalatory cycle,' and there will be 'questions about whether Israel is going to target more Iranian energy infrastructure,' he added. South Pars, the world's largest gas field, is shared between Iran and neighboring Qatar, where it's known as the North Field. Iran's gas is mainly for domestic use and is not widely exported, with South Pars providing roughly two-thirds of the country's supplies. The fire at the facility at Phase 14 halted production from one of its offshore platforms, amounting to 12 million cubic meters per day, Tasnim reported. Firefighters prevented the blaze from spreading to other units, it said. A separate fire also broke out at the Fajr Jam gas plant, which processes fuel from South Pars as well as the Nar and Kangan fields and is one of Iran's largest processing facilities, Tasnim reported. Also read: Oil Market Long Numb to War Risk Confronts Weekend of Worry The strikes could further cripple Iran's wobbling energy industry. The country has been facing some of the worst power outages in decades that have hit large swathes of the economy, pushing a country rich in energy resources further into crisis. Blackouts cost the economy about $250 million a day, according to estimates from the Iran Chamber of Commerce, Industries, Mines and Agriculture. 'Israel is looking for economic targets, but at least in this stage trying to limit the impact and the knock-on effects for international markets' to avoid alienating allies, Bronze said. An official cause wasn't given for the blaze at Fajr Jam, but initial assessments pointed to hostile drones, Tasnim reported. Iran has developed a vast network of gas-processing and chemical plants onshore around the port of Assaluyeh on the country's southern coast. The facilities linked to the offshore production sites are also vital for export of condensate, a light oil-like liquid usually produced with gas. Iran mainly ships condensate to China. Iran exports some gas to Iraq and has also shipped to Turkey in the past, but the country has never been able to secure the investment needed to complete liquefied natural gas terminals that would allow it to widely export the fuel. 'This is a significant escalation,' said Jorge Leon, an analyst at Rystad Energy A/S who previously worked at the OPEC secretariat, said of the onslaught on Saturday. 'This is probably the most important attack on oil and gas infrastructure since Abqaiq,' Leon said, referring to the 2019 strike that briefly crippled one of Saudi Arabia's key oil-processing plants. American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
a day ago
- Forbes
Higher Oil Prices Mean Less GDP
Iran's supreme leader Ayatollah Ali Khamenei speaks after casting his ballot during the runoff ... More presidential election in Tehran on July 5, 2024. (Photo by ATTA KENARE / AFP) (Photo by ATTA KENARE/AFP via Getty Images) The shale revolution has been a huge boon for America, producing an enormous amount of income, tax revenue and employment as well as reducing CO2 emissions. At the same time, by reducing our net oil imports, they have substantially improved our energy security. But the simple metric of net imports understates the complexity of energy security. Energy vulnerability is often treated as nothing more than reliance on imports from foreign countries, and that is certainly a crucial element but hardly the only one. Conversely, the fact that the U.S. still imports as much as eight million barrels a day of oil overstates our vulnerability: lost imports would not mean a shortage for domestic consumers, as that oil is swapped out for domestic supplies for the sake of economic efficiency, and producers can simply retain crude that is currently exported. The Figure below breaks down the source of gross imports; the decline in oil from OPEC is pronounced, while the rise of Canadian oil imports, due to higher oil sands production, exaggerates the security of our supply, albeit only slightly. U.S. Oil Imports (thousand barrels per day) On the one hand, despite ongoing tension with Canada, they are unlikely to cut off sales to the U.S. for political reasons. Nevertheless, there is no guarantee that in a new disruption of global oil supply, such as from unrest in Russia or war in the Middle East, Canadian oil would continue to be delivered to American refiners. In theory, Canada could use the U.S. for the transshipment of oil to better paying overseas customers, although given the globalized nature of the oil market, prices should not be significantly different elsewhere. Of course, should American politicians (foolishly) respond to a global oil crisis by restricting exports of domestic crude, U.S. oil prices would presumably drop below global prices, encouraging Canadian companies to export their oil elsewhere. Such a populist move by the U.S. would be detrimental and the impact multiplied if politicians tried to prevent Canadian companies from selling their oil onwards, mostly through the Gulf Coast ports. Should, say, a country like China offer attractive deals to Canadian companies for additional supply (similar to what happened in 1979), the political calculus becomes more complex. But this highlights another way the globalized oil market affects energy security: even if the U.S. is well-supplied with oil, a global oil crisis will translate into higher domestic oil prices. Absent political intervention, U.S. prices would rise to match global oil prices, meaning even with our current energy independence, a new oil crisis would inflict economic damage. Certainly, now that the U.S. is a net exporter of oil, higher oil prices would improve not worsen the trade balance. Still, sending the money from East Coast consumers to Southwest producers will have a deflationary impact on the economy because higher oil prices have an effect similar to a tax hike. Consumers would spend more for gasoline and reduce other spending accordingly. It is generally thought that a tax hike lowers GDP by 2-3 times the increased taxes, so that an increase in taxes equal to 1% of GDP yields a 2-3% reduction in GDP. Tax Increases Reduce GDP | NBER An oil price increase does not have precisely the same effect, because the money goes not from the private sector to the government but from one part of the private sector (consumers) to another (oil producers). Still, a $10/barrel increase in oil prices equates to roughly $35 billion in higher household expenditures, or about 0.1% of GDP. So, back of the envelope calculation suggests that GDP would drop somewhere on the order of 0.2% for every $10/barrel increase in oil prices. This effect is clearly seen in historical GDP data, as the figure below shows, although there are obviously many confounding factors. In all likelihood, the impact now would be less than in the past because our oil trade balance is positive; net exports, at 2 million barrels per day, will translate into modest but significant economic benefits. Still, in the case of a prolonged period of $100 per barrel oil, which many think could be achieved if the Middle East situation worsens significantly, a GDP loss of 0.5% is quite likely. Change in Real GDP (percent) At present, it appears unlikely that Middle Eastern oil supply will be affected by the ongoing conflict between Iran and Israel. Attacks on shipping or the Straits of Hormuz would boost prices but are unlikely to persist beyond a few weeks. More worrisome would be an Israeli attack on Iranian oil facilities, although at present, such is not expected. So, $100 oil for several months would not automatically translate into a recession, but would have a notable impact on GDP growth, especially if the Fed raises interest rates as higher oil prices increase inflation. But an oil price spike will definitely worsen consumer and business confidence. As much as it would be nice for cash-rich Southwesterners to spend their increased income on Maine lobster and New England clam chowder, a prolonger period of higher oil prices--$100 or more—will be disruptive enough to threaten at least significant economic slowing and potentially tip us into a recession.
