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Investors are worried about possible attacks on oil facilities in Southern Iraq that could affect crude supplies into Asia, an analyst told Sirius Energy<\/strong>.<\/p>\n Iraq is the second-largest oil producer in OPEC, the Organization of the Petroleum Exporting Countries. A disruption to its output level could make it hard for the oil cartel to replace the shortfall, Henning Gloystein, director for global energy and natural resources at political risk consultancy Eurasia Group, said on \u201cSquawk Box.\u201d<\/p>\n \u201cThat southern facility is right at the heart of the geopolitical risk world at the moment,\u201d he said referring to oil facilities in Iraq\u2019s southern province of Basra. \u201cThis is where the oil market fears a confrontation because if that gets hit, markets will get into trouble, especially in Asia.\u201d<\/p>\n Basra, which is near the Umm Qasr port, accounts for nearly 85% of Iraq\u2019s crude oil production, according to the Associated Press.<\/p>\n Tensions in the Middle East soared after Iran on Wednesday local time launched more than a dozen ballistic missiles against Iraqi military bases housing American troops. It was an act of retaliation in response to the U.S. killing of Iran\u2019s top general, Qasem Soleimani. The attacks did not destroy major energy infrastructure that could have disrupted global crude supply.<\/p>\n Oil prices initially surged more than 4% at news of the missile attacks, but they subsequently dropped almost 5% when U.S. President Donald Trump said Washington would impose sanctions on Tehran instead of another military strike as feared by some investors. But the situation remains volatile and the likelihood of possible strikes on tankers or oil facilities in the region remains.<\/p>\n<\/div>\n Some major Asian countries \u2014 like Japan, South Korea, China and India \u2014 rely on the Middle East for oil. Japan and South Korea have large strategic petroleum reserves in place, and China is building up its reserves. \u201cThe biggest concern would probably be India,\u201d Gloystein said, referring to a potential disruption in supply.<\/p>\n \u2033(India gets) about 40% of oil from the Middle East and 20% from Iraq, and they switched to Iraq when they lost Iran and Venezuela because of the U.S. sanctions. So, they have been caught up in this geopolitical crisis and game, which they don\u2019t have a part in,\u201d he added.<\/p>\n<\/div>\n Still, there is an abundance of oil in the market right now, partly due to the ramp-up of U.S. oil production, Gloystein said.<\/p>\n \u201cThey are producing around 13 million barrels per day of crude oil today,\u201d he said referring to the U.S. It\u2019s likely that U.S. production could go further up to 14 million barrels a day later this year or in early 2021, he added.<\/p>\n Gloystein pointed to the attacks on two Saudi Aramco oil facilities last year that forced Saudi Arabia, the largest oil producer in OPEC, to shut down half its total oil production. In the immediate aftermath of those attacks, oil prices rose, but they came back down again and did not \u201cgo anywhere near a $100,\u201d he said.<\/p>\n \u201cThere\u2019s so much oil in the market right now that a single disruption, or even a small series of disruptions in the Middle East, doesn\u2019t impact the world as much as it did five or ten years ago,\u201d Gloystein said. \u201cThat is because of U.S. shale but also Brazilian production has gone up. Even the North Sea, even Norway, which plateaued recently, is now increasing production this year.\u201d<\/p>\n As supplies surge, demand growth has also slowed \u2014 from about 3% a year three years ago to around 1% to 1.5% currently, he added.<\/p>\n On Friday morning in Asia, U.S. crude futures traded down 0.3% at $59.38 a barrel. Global benchmark Brent crude also fell 0.29% to $65.18 at 10:40 a.m. HK\/SIN.<\/p>\n \u201cEssentially what photography is, is life lit up.\u201d\u2014 Sam Abell – Visit The Online Publishers TOP online photos for inspiring, professional photography.<\/strong> Want To Start <\/em><\/strong>Selling Your Photos Online<\/em><\/strong><\/a>? Here Are the Steps to Follow<\/em><\/strong><\/p>\n\nAn abundance of oil<\/span><\/h2>\n
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