105 comments on Simple mathematics - The Saudi reserves, GOSPs and water injection
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105 comments on Simple mathematics - The Saudi reserves, GOSPs and water injection
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Damn - just lost the post. The point about tankers was that they can be used to create a local surge in an importer's market, but it would involve careful and longer term planning, and requires certain assumptions to be made - for example, that the Saudis have invested in enough excess storage/port facilities to allow them to use tankers as a 'production' surge mechanism (for example, by leasing 'idle' tankers ahead of time as storage, and then having them steam above their average speed to their destination). This would merely be an illusion, but for a couple of months, it would also be real - that particular importer's storage tanks would be brimming, the refineries would be humming, the price would be sinking, and the electorate would be happy.
But the thinking about the wells is much more elegant, and has the feel of truth.
Not a bad idea. I'd not be surprised to see them use every trick in the book to show some sort of surge later this summer. They can also withhold from the local market.
Say decrease the subsidy a bit and allow some very tight markets.
Its hard to figure the total the could do say for two months
Say 200 kbd at least from maximizing production.
500 kbd draining the 33 million in tank storage.
maybe 100kbd with your tanker idea but more important its a good idea for stretching the oil available with whats basically a shell game. This gives them a 700kbd short term surge ability lets say I'm off by being conservative I'd guess they would try for 3 months instead of two if they have more resources. Cutting supplies to the local market could net say 50-75kbd.
Also they could step it up slowly in 200kbd increments each month instead of ramping up immediately this would spread the time period over maybe 4 months with only 1-2 months actually at a high rate. In fact with this game they might even do 1 million bpd for one month.
They can also do simple tricks like agreeing to send two tanker loads to someone so its booked as a export then cut the shipment later. This fits into your tanker game playing
so they oversell then play games supplying the markets.
Also note its probably easy to create a logjam at the terminals but sending tankers to close together.
A one time surge for 2-3 months should do a good job of empowering peak oil pundits.
This is why I think its important if they drop again and prices are still high or don't surge again later if we have hurricanes. If they are pulling tricks it cannot last.