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fig_1d_2010_12 fig_1c_2010_12 fig7_2010_12 fig8_opec_2010_12

Oil Price

Iran

iran_petrol_lines_sept_2010_v2

Petrol queues getting worse everyday – Tehran September, 2010
http://www.youtube.com/watch?v=Nzg7BXpWMjQ

Iranian riot police out in force as food and fuel subsidies end

19/12/2010    http://www.guardian.co.uk/world/2010/dec/19/iranian-riot-police-subsidies-end

PRESIDENT Mahmoud Ahmadinejad has taken a big political gamble.

20/12/2010     http://www.theaustralian.com.au/news/world/prices-to-soar-as-iran-cuts-subsidies/story-e6frg6so-1225974109120

Why are there these problems? This graph explains everything:

iran_exports_to_2015_implied_by_iea_medium_term_2010

Increasing local consumption will intersect with a declining production curve some time in this decade. In the following post I had used IEA data:

3/7/2010    Iran needs $130 oil to balance budget by 2015 when crude oil production is down by 700 Kb/d

http://www.crudeoilpeak.com/?p=1669

Dr. Ali Samsam Bakhtiari (rest his soul in peace) told me and others in ASPO in 2006 that Iran may no longer export oil by 2015.  This is no secret as it follows from his estimate presented at the International Workshop On Oil Depletion IWOOD 2003 in Paris:

A realistic view of long term Middle East production capacity

http://www.peakoil.net/conferences/iwood-2003-paris

Ali’s estimate for Iran from that presentation forms the underlay (blue area) for the above  graph.  Apparently he expected a collapse of oil production similar to what happened before and after the fall of the Shah:

iran_oil_production_1965_2009_bp

Excerpts from Dr. Bakhtiari’s presentation to the Australian Senate Hearing on oil supplies in July 2006:

Senator MILNE— ………..Let us assume there is a geopolitical crisis and Iran decides to stop supplying into that 81 million barrels a day. What impact would that have?

Dr Samsam Bakhtiari—At present I think that Iran is supplying roughly two million barrels of oil for exports. In the case of some geopolitical problem, you would have to take the two million out of the 81 million. That in itself would not be very harsh. Why? Because major consuming countries have their strategic petroleum reserves. They could start taking it out of their reserves.

What would be impacting heavily on the price is the psychological impact of any geopolitical happening, whether in the Persian Gulf or in South-East Asia. Because the leeway in [transition phase] T1 is extremely small—as I have tried to mention to you—the slightest impact geopolitically will have enormous consequences. If you had in Saudi Arabia, for example, or anywhere else, some two million to three million barrels of spare capacity—that you usually had before—then people would not be so worried about this geopolitical impact. But you do not have spare capacity anymore.

I will give you just one example of what we in NIOC [National Iranian Oil Company] did in 1975 after the first price shock, when the price went from roughly $2 per barrel to $11 per barrel. To find out what the real price was NIOC set up an auction, saying, ‘We have a few barrels and we are going to auction these barrels, so whoever is interested should give us a bid.’ Through the bids, we found out what the real price was. Some bids were up to $41. There were people who were willing, at $11 per barrel, to pay $41.

CHAIR—If I understand you correctly, you are saying that we should be investing now as a matter of priority in public transport.

Dr Samsam Bakhtiari—Certainly, yes. Right now. As soon as possible. Start tomorrow on public transport. It is better than starting the day after tomorrow. You also have the problem that, at some stage, you will not be able to invest that easily. The further we go down the line, investment gets more difficult. People who think they will undertake projects in 10 years time do not realise the problems of making these projects.

http://www.aph.gov.au/hansard/senate/commttee/S9515.pdf

Independent petroleum geologist Jeffrey J Brown

http://www.aspousa.org/worldoil2010/Speakers.cfm?bid=1022

reminds us continuously:

“Here is Sam’s forecast for Iranian net oil exports, showing actual net exports through 2006 (the 2007, 2008 and 2009 data points fall between his middle case and high case):”

iran_sam_foucher_image028

“The projected 2005 to 2015 net export rate of change is shown, -4.9%/year–within a range from -11.9%/year to +2.1%/year. The actual observed net export rate of change, for 2005 to 2009, has been -1.4%/year.”

http://www.theoildrum.com/node/7272#comment-753038

The above graph is from this article:

A Quantitative Assessment of Future Net Oil Exports by the Top Five Net Oil Exporters

http://graphoilogy.blogspot.com/2008/01/quantitative-assessment-of-future-net.html

Iran’s oil reserves

Iran’s 2P technical oil reserves are 60 Gb compared to “political” reserves of 140 Gb as calculated by Jean Laherrere, a French petroleum engineer:

iran_2p_technical_reserves_laherrere_oct2010

http://aspofrance.viabloga.com/files/JL_Nice2010long.pdf

See also under OIL RESERVES, OPEC’s PAPER BARRELS.