Iraq Oil Shock To Lift Safe-Haven Currencies Before Those Of Crude Exporters

Any setback to the government in Southern Iraq could lead to greater demand for the more liquid currencies like the yen, the dollar and the Swiss franc.

By Reuters
11 hours ago

A sudden and sustained rise in global oil prices caused by violence in Iraq would initially trigger a rush into safe-haven currencies like the yen and the Swiss franc, despite Japan and Switzerland being importers of crude.

Ever since the violence escalated this month and drove oil prices higher, both currencies have held their ground, challenging a view that higher crude prices usually translate into big wins for oil-exporting countries and their currencies.

Higher prices improve the trade balance for oil exporters like Canada and Norway and push their currencies higher. Conversely, they tend to hurt oil-importing nations.

However, investors are wary that a supply shock could hurt global recovery prospects and hit the less-liquid and riskier commodity currencies at first.

“Such shocks usually do not bode well for general risk appetite as it raises concerns about global growth and tends to be accompanied by falling stock prices,” Petr Krpata, currency strategist at ING, referring to the recent spike in oil prices due to fighting in Iraq.

“In fact, within the G10 FX space, the dent to risk appetite tends to offset the positive effect of rising oil prices on exporters.”

Brent crude surged eight per cent since May to hit a nine-month high of $115.71 in mid-June on worries that sectarian violence in Iraq could hurt oil output. With Iraq contributing to about 11 per cent of the daily production from the OPEC oil producers’ cartel, any supply disruption would hurt.

So far, there is little sign of large scale supply disruptions and oil prices have eased, keeping action in the currency market rather limited. But currency investors are watching whether the fight extends into Iraq’s south.

Around 90 per cent of Iraq’s oil shipments are from there, an area so far largely unaffected by unrest. Any setback to the government there could lead to greater demand for the more liquid currencies like the yen, the dollar and the Swiss franc.

All three currencies are sought-after during financial market turmoil and uncertainty about the global economy. They have more or less held their ground this year, despite stocks soaring and riskier currencies performing well.

The Canadian dollar and Norway’s crown are down four per cent versus the yen so far in 2014 and both have underperformed the rise in oil prices which have risen three per cent this month.

“If it is an oil supply shock then we will see a move towards safe-haven currencies,” said Jane Foley, senior currency strategist at Rabobank. “On the other hand, a sustained rise in oil prices, which is not caused by a supply shock will tend to benefit oil producing countries like Canada.”


Mark Mccormick, a strategist at Credit Agricole says the biggest beneficiaries of a sustained rise in oil prices in the past have been the growth-linked, commodity currencies like the New Zealand, Australian, Canadian dollars and the Norwegian crown.

Higher oil prices are not always bad for economies or financial markets. If gross domestic output is on a strong footing already, robust demand for energy, higher stock markets and growth-linked currencies can co-exist nicely, analysts said.

“But when oil prices result from supply shortages, both the reduction in quantity and the higher price will tend to hit economic activity,” said Jeremy Hale, a global macro strategist at Citi. “In fact, every U.S. recession bar one since the mid-1970′s has been associated with a spike in oil prices.”

The United States, though, is much better placed to tackle an oil shock given its dependency on imports is gradually waning.

In the derivatives market, implied volatilities show there is little sign of an oil price shock being factored in.

Currency volatility has been crushed, languishing at multi-year lows, highlighting most major currency pairs are likely to trade in a range and unlikely to see sharp and volatile swings.

ING’s Krpata warned that may change and an oil shock could see implied volatilities rise.

“This is not surprising as a period of stress and uncertainty tend to be associated with higher vols. The highest pick-up in vols is seen on historically higher beta currencies such as the Aussie, the New Zealand dollar, the Norwegian crown as well,” he said.…/#.U7gzlc4vCG8

Picture: Iraq could export more than 3 million barrels end of the year

6/21/2014 0:00

Brent consolidating near $ 115
Baghdad – Mostafa Hashemi
at the time, which saw the world the high price of a barrel of oil because of some of the events in different parts of the country, saw an economist that this increase my time and built on speculation in the oil markets.

said economic expert, Dr. Majid picture: that speculators in the global oil market took advantage of the effect of the psychological factor in raising the prices the fact that such speculation representing mainly to exploit the conditions and its impacts on the psychological factor, stressing the lack of real risks to Iraqi exports of crude oil.

confirmed picture in a statement (morning) that Iraq is capable of producing and export of oil, with expectations that the arrival of the oil exporting 3.4 million barrels per day by the end of this year, noting that the quantities exported in the month of April amounted to 2.4 million barrels.

between the picture that rising world oil prices is a rise temporarily because it is based on the exploitation of speculators worker psychological lift the price for achieving profits fantasy, where if the price of a barrel of oil from rising global
consumption of it $ 5, they are making a profit estimated at four million dollars a day.

said that Iraq has the ability to increase its production and export of additional quantities as well as the provision of OPEC’s supply of oil to the world This means that the flow of crude constant nor fears of a rise in the price of a barrel in the long run. It also was not affected by fields of raw or exports from southern Iraq and most of the production of 3.3 million barrels per day comes from those fields.

and the impact of the high price of a barrel of oil in Iraq’s budget for next year, said the picture: that his influential double, where the rise of imports to Iraq as long as this continues to rise , who saw that he can not last for a long time because it is based on speculation in the international exchange of oil,

on the other hand, the costs of production and goods that the country needs to import from the countries of the world will have risen is the other and then, this effect will not be complete.

and firmed prices decades combination Brent crude oil near $ 115 a barrel on Friday, near its highest level in nine months and tend to record a second weekly gain in a row amid growing risks of supply disruptions from Iraq is, according to Reuters news agency.

fell Brent nine cents to 114.97 dollars a barrel after it ended the trading on Thursday up 80 cents at 115.06 dollars a barrel. The increased holding U.S. light crude which a solution for it on Friday, up 14 cents to 106.57 dollars a barrel after rising 46 cents in the previous session.

attributed the International Energy Agency in its forecast medium term to Iraq’s share of 60 percent of the rise in global production is expected by 2019, according to a report on the the oil market.

came in the IAEA report that demand for oil will continue to rise in the coming years at a pace of 1.3 percent per year, according to estimates of the agency, for up to 99.1 million barrels per day by 2019. likely to form this year has been a turning point Then demand starts to slow down due to rising prices and concerns for the environment and the presence of less expensive alternatives.

confirmed report that OPEC countries will remain "a large supplier to the market," but it would face "severe headwinds to increase their capabilities."

ARBIL Fri May 23, 2014 3:36pm IST

ARBIL Iraq May 23 (Reuters) –

The first cargo of oil piped from Iraqi Kurdistan was sold to European markets and the revenue will be deposited in Turkey’s Halkbank, the autonomous region said in a statement on Friday.

The Kurdistan Regional Government (KRG) said sales from the Turkish port of Ceyhan would continue despite opposition from the federal government in Baghdad, which has threatened legal action against any company involved in "smuggling" Iraqi oil.

"A tanker loaded with over one million barrels of crude oil departed last night from Ceyhan towards Europe," read the KRG statement.

"This is the first of many such sales of oil exported through the newly constructed pipeline in the Kurdistan region."

The statement added that the oil revenue would be treated as part of the region’s share of the Iraqi national budget, which Baghdad has partially withheld since the start of the year as punishment for the Kurds’ moves to export crude independently.

The KRG said it remained open to negotiations with Baghdad and would comply with United Nations obligations by setting aside 5 percent of the revenue in a separate account for reparation for Iraq’s invasion of Kuwait in 1990.

Turkish Energy Minister Taner Yildiz said on Friday that the first cargo was sold in to the Mediterranean spot crude market.

"This crude oil will possibly go to Italy or Germany," Yildiz said in comments broadcast live on TRT television, adding the cargo was about 1.05 million barrels. (Reporting by Isabel Coles, additional reporting by Seda Sezer in Istanbul, editing by William Hardy.

UPDATE 3-Iraqi Kurdistan defies Baghdad to load first pipeline oil sale

Fri May 23, 2014 2:11am IST

* Move likely to infuriate Iraqi government in Baghdad
* First 1 million barrel cargo being loaded at Ceyhan, Turkey
* Tanker scheduled to sail later on Thursday, buyer not identified (Adds SOMO reaction, background)

By Orhan Coskun and Humeyra Pamuk

ANKARA/ISTANBUL, May 22 (Reuters) – Iraqi Kurdistan started loading oil from its new pipeline for shipment from a Turkish port on Thursday, defying the Baghdad government, which claims sole authority over Iraqi crude and declares any independently sold oil as ‘smuggled’.

The cargo of 1 million barrels of crude oil was being loaded on a tanker in the Mediterranean port of Ceyhan, Turkish Energy Minister Taner Yildiz told Reuters on Thursday.

"Loading will be completed today," Yildiz said, declining to name the buyer.

The sale is likely to infuriate Baghdad, which has been at loggerheads with the autonomous Kurdish region over the sharing of oil revenues, and denounced Turkey’s courtship of the Kurds, warning that steps towards Kurdish economic independence could threaten Iraq’s sovereignty.

Baghdad has cut the region’s share of the budget to punish it for building the new pipeline, and oil sales can provide the Kurdistan Regional Government (KRG) with desperately needed independent income.

Flows through the pipeline started last December, but Ankara had pledged it would wait for Baghdad and Arbil to resolve their differences before allowing independent oil exports.

After five months of talks and little progress, however, tanks at Ceyhan are now full with 2.5 million barrels of Kurdish oil, and Turkey decided there was no point in further obstructing exports, sources familiar with the sale said.

In late 2013, Iraq’s Oil Ministry instructed a U.S. law firm to pursue legal action against any buyer of Kurdish oil.

Iraq’s State Oil Marketing Organization (SOMO) issued a statement late on Thursday calling the loading of oil from Ceyhan "an illegitimate deed of the Turkish authorities".

It said that both the Oil Ministry and SOMO "reserve the right to take all legal measures against any company or entity" that loaded Iraqi crude from Ceyhan without Baghdad’s approval.

Officials in Arbil could not immediately be reached for comment.


An official at the GAC shipping agency in Turkey confirmed that a tanker named United Leadership was loading piped Kurdish oil. Reuters AIS Live ship tracking showed the tanker had arrived in Ceyhan around May 20 and was berthed there.

Flows through the KRG oil pipeline have increased since early March while Iraq’s federal oil pipeline, from the northern Kirkuk fields to Ceyhan, has been down, an industry source said. That freed up Turkish capacity to handle the Kurdish flows.

"Because the Kirkuk line was not working, KRG was able to pump around 100,000 barrels per day (bpd) at times, which filled up the storage tanks quickly," the source said.

KRG’s new oil pipeline connects to the existing Iraqi federal pipeline on the Turkish border.

The industry source said the flow in the KRG pipeline continued as the export cargo was being loaded in Ceyhan.

Another source said the payments for the exports were likely to be deposited with Turkey’s Halkbank.

Iraqi Kurdistan began selling its oil independently of the federal government in 2012, transporting a small trickle of condensate and then, in 2013, small quantities of crude through Turkey by truck.

A Turkish company called Powertrans has acted as broker for the Kurdish government, selling the oil via tenders to traders.

Last week, Reuters reported that Israeli and U.S. oil refineries had imported small cargoes of crude oil from the region.

The sales may have immediate political consequences as Iraq’s incumbent prime minister, Nuri al-Maliki, looks for partners to form the next government after preliminary results from the April 30 election were announced last Monday.…0O840O20140522

Kurdistan seeks to enshrine the independence of its oil sector
By: wab
on: Mon 5/12/2014 5:36

Erbil / Baghdad news
preparing the Kurdistan region of Iraq to start selling its oil flowing in the new pipeline, completed the extended end of last year, even if it was unable to reach

an agreement with the central government in Baghdad on the mechanism of export and how to share the proceeds of oil sales.

Aware of the Kurdish leadership that Maturity of the parliamentary elections, which took place in Iraq on April 30 last year, may not provide the opportunity to fast for the region because maneuvering to extract concessions from Baghdad as part of political bargaining that will resort to the winning parties to form a new Iraqi government,

the Prime Minister announced the region, Nechirvan Barzani, on the eve of the elections that the region will begin the sale of oil that has been pumped to the Turkish port of Ceyhan, regardless of whether an agreement was reached with Baghdad in this regard or not.

Kurdistan: We will sell our oil independently of Baghdad

May 2, 2014 12:50
Last Updated: May 2, 2014 12:50

Prime Minister of Iraq’s Kurdistan region Nechirvan Barzani’s decision to sell a stake region independently from the capital, is a constitutional decision, surprising the actions of the other party by saying: In short, Baghdad always used oil and gas trump card against the Kurdistan region. Said: The region issued 1.5 million barrels to port of Ceyhan, where it is stored in some reservoirs in Kurdistan, but separated from the quantities of Iraqi oil stored there, explaining that the region will be exporting oil through Turkey. According to Al-Qabas newspaper

And about what the Turkish energy minister said they will not be able to store only two million barrels, so you do not need to be sold, said Barzani: We Senbaah. This is our decision. Returned Barzani, the historical background, the issue of the oil region, referring to the two sides in this issue: First, is the oil that has been extracted in Kirkuk and other areas of Kurdistan and sell them to buy bombs and weapons to be used against the Kurdish people, and we believe that after 2004 began a new era in Iraq.

On the second side, Barzani said that the Iraqis acknowledged their new constitution, and voted upon by 80%, and for the Kurds agreed to every word, so as to make sure that we can say what we have and we are practicing, this our rights today, and will not give them up. Continued: no freckles in this the trend so far, but the oil is not only the business element. It is certainly also political. Since we started in June 2005 became the Kurdistan region of energy resources, and major companies such as «Exxon Mobil» and «Gazprom» and «Total» and «Chevron» is in Kurdistan. If you were not sure that Kurdistan has a constitutional and political reasons, so why take the risk to come to Kurdistan to invest?

3 stages of the policies of Baghdad

He pointed to what the other party that the region began with small businesses, this is true. But in the end some of the largest oil and gas companies of international arrived and is now working in Kurdistan. Explained that the policies of Baghdad undergone three stages: First, they said we were not exaggerate, Second: They put a black list of companies that worked in Iraq and Kurdistan, Third, they said okay to be We have to extract the oil, but you can not export it. Briefly Baghdad always used oil and gas trump card against the Kurdistan region. Unconstitutional and the decision to sell oil through an organization other than the State Oil Marketing Company (SOMO), Barzani said: No, it is not unconstitutional. It is perfectly constitutional. Any part of the Constitution says that the SOMO only has the right to sell oil. There is no such thing.…s%29&sandbox=1

Barzani: We will sell the oil .. with or without the approval of Baghdad


The head of the Kurdistan Regional Government of Iraq Nechirvan Barzani in Arbil will begin the sale of oil stored at the port of Ceyhan beginning next May with or without the approval of Baghdad.

Barzani said he was "at the beginning of next May will begin Arbil in the sale of oil stored in tanks port of Ceyhan, with or without the approval of Baghdad," adding "we will sell oil, and this is our decision."

And added that "Erbil will bear the responsibility for the sale of oil alone, even if The Baghdad to cut off payments…#1575;د-

About 8 billion dollars in oil revenues last March

4/26/2014 0:00

Oil Ministry announced that the exported quantities of crude oil and the revenue for the month of March, according to the statistical final issued by the Iraqi Oil Marketing Company amounted to 74.300000 seventy-four million and three hundred thousand barrels while revenues were 7,507 seven billion five hundred and seven million dollars. spokesman of the Ministry of Oil Assem Jihad said in a press statement:

that the quantities exported and the revenue for the month of March last recorded a decline compared to last February, because of repeated targeting exports through the line of Ceyhan – Kirkuk.

adding that the exported quantities of crude oil for the month of March last, Tksmt between Basra oil, which reached (73.5) seventy-three million five hundred thousand barrels earnings of $ 7,429 seven billion and four hundred and nine and twenty million Dolarama Kirkuk oil exports amounted to (0.8) eight hundred thousand barrels, which achieved revenues of (74) seventy-four million dollars and added that the average selling price was (101.036) dollars per barrel.

between the quantities above were uploaded by the international oil companies that carry different nationalities of (30) oil companies from the ports of Basra and Khor al-Amaya and buoys unilateralism on the Arabian Gulf and Turkish port of Ceyhan on the Mediterranean Sea and the truck by truck to Jordan.

noteworthy that The ministry and through faith in informing the people on the export operations and the amounts realized it has taken this procedure monthly to the completed Two Chinese companies operations completions to three new wells, including wells (multiple arms) in the Halfaya oil (35
southeast Maysan) one major fields belonging to the Maysan Oil Company.

The general director of Maysan Oil Company Ali Qubool Bahadli that my company Bohai Dagin Amlten according to contracts with the operator of President Halfaya field (Company Petrojayna) have completed recently operations completions to three new wells in the Halfaya field two (Hlvaip -60.65, 76),

indicating that the two wells of these wells were drilled technology arms of multinational. investigating drilling technique multiple arms of the wells a significant increase in the amount of oil produced and to reduce the cost of drilling.

added Bahadli that the number of wells that have been completed in that field since the implementation of contracts for the licensing rounds, including these wells, amounted to 62 wells In addition to reclaiming 11 wells in the same field.

estimated oil reserves of the field about 16 billion barrels of which 4 billion are recoverable at the moment in addition to large quantities of natural gas, has been drilling the first well in the field in 1976.

Shahristani: Iraq 2020 will produce 9 million barrels of oil per day

Wrote: April 21, 2014

Deputy Prime Minister for Energy Hussain al-Shahristani that Iraq’s oil production up to nine million barrels per day by the year two thousand and twenty.

Shahristani said that to achieve this would be to build on existing contracts signed with international companies for oil noting that it be Iraq at the forefront of producing countries

and the source of the oil will be Iraq’s revenues from that of two hundred to three hundred billion dollars, stressing that the next phase will be the benefit of associated gas is not burned .

Shahristani was announced, earlier in the rise of Iraq’s production of crude oil to three million million barrels per day, noting that exports also rose to a record two hundred and eight million barrels per day.…-%d9%85%d9%84/