Prospects for oil and gas in the second quarter

Subject Prospects for oil and gas in the second quarter Significance Elevated levels of supply will keep oil and natural gas prices weak. The recent uptick in the price of Brent crude is not reflected in the oversupplied US market, so the slowdown in US crude output growth, centred on shale, should continue into the second quarter. Brent's recent price strength, in part, reflects brightening prospects for the global economy, but more evidence is needed to push prices higher.

Subject Indian-Israeli cooperation in defence trade and manufacturing. Significance Indian Prime Minister Narendra Modi’s visit to Israel in July raised relations between the two countries to what was described in a joint statement as a "strategic partnership". Defence cooperation featured in talks between Modi and his Israeli counterpart Binyamin Netanyahu. Impacts India will struggle to meet its target of reducing imported defence products by 40% within the next ten years. India’s Oil and Natural Gas Corporation is likely to bid for Israeli offshore oil-and-gas exploration blocks. Closer relations between India and Iran may raise concerns in Israel.


Significance Despite coal’s decline, overall US energy exports hit record levels in 2016 after years of strong domestic output growth and major investments in new infrastructure to link US oil and gas fields with international markets. US-produced refined fuel products, crude oil and natural gas liquids are shaking up energy trade routes and posing new challenges to established exporters in the Middle East and Russia. Impacts OPEC oil exporters will have to compete directly with US shale producers for market share in high-growth regions such as Asia. Major LNG exporters like Qatar and Australia are likely to see low global gas prices for many years as new US supply hits the market. Midstream companies will see strong growth opportunities reshaping US energy infrastructure for exports. Washington’s efforts to boost coal in other advanced economies’ energy mixes are unlikely to meet with success.


Subject Prospects for the Gulf states in 2022. Significance The six member states of the Gulf Cooperation Council (GCC), especially Saudi Arabia, are enjoying the windfall from a tight global energy market that has pushed up oil and natural gas prices. They have also coped effectively with the healthcare challenges of the COVID-19 pandemic, laying the groundwork for positive economic prospects in 2022.


Subject Prospects for the Middle East and North Africa to end-2016 Significance The Middle East and North Africa (MENA) region is beset by multiple armed conflicts and security crises, and faces daunting economic challenges as a result of both the widespread political turmoil and the impact of the sharp fall in oil and natural gas prices.


Author(s):  
Viacheslav Olegovich Mosalygin ◽  

For more than 15 years, a significant part of the budget revenues of the Russian Federation have been tax revenues from the sale of hydrocarbons, in particular oil and natural gas. Despite the desire of our government to minimize its dependence on oil and gas revenues, the government continues to implement measures to encourage both small and large companies by providing some tax-related benefits, thereby encouraging the fields to further develop and expand.


Significance Vaezi was speaking after talks with visiting Armenian Economy Minister Karen Chshmaritian. Since Iran's nuclear deal with the international powers, Armenia is in a key position to engage with Iran, building on a recent deepening of bilateral relations. With a sizeable minority community in Iran and a record of historical cooperation, Armenia is well positioned to leverage the opportunities inherent in Iran's reintegration into the global economy. Impacts With two of its four borders closed, better links to Iran would be of great benefit to Armenia. Iran could have ambitions of becoming a mediator in South Caucasus's intractable 'frozen' conflict in Nagorno-Karabakh. Iran could offer Armenia its oil and gas at a discount to take market share from Russia.


Significance US natural gas prices have surged over the past six weeks thanks to falling supply, strong demand from the power sector and rising exports. The uptick in prices has provided a glimmer of hope to gas producers in the United States, hard hit by a prolonged slump in prices. Impacts Declining gas production and rising demand will mean increased pipeline imports from Canada over the coming months. Mexico will pay higher prices for US natural gas imports as the Henry Hub benchmark, potentially hitting demand. US producers that have more gas-producing assets in their portfolio will benefit from rising prices.


Subject Senegalese gas scandal. Significance A high-profile scandal implicating President Macky Sall's brother Aliou continues to prompt controversy. A BBC documentary aired last month alleging an improper relationship between controversial Romanian-Australian businessman Frank Timis and Aliou surrounding offshore natural gas field licences. Impacts The scandal may dent Senegal’s democratic credentials but is unlikely to dampen overall interest in the burgeoning oil and gas sector. Concerns will mount that Sall is gradually instituting a form of ‘civil authoritarianism’, with a growing clampdown on dissent. The youthful Ousmane Sonko, who placed third in the February elections, could use the scandal to bolster his anti-corruption credentials. Fears may grow that Sall could ultimately pursue a third-term bid, using a new 2016 constitution as his validation.


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