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172. Will Oil Become the Achilles Heel of China’s BRI?
- Author:
- Naser al-Tamimi
- Publication Date:
- 01-2020
- Content Type:
- Commentary and Analysis
- Institution:
- Italian Institute for International Political Studies (ISPI)
- Abstract:
- With more than 136 countries (end-July 2019) reported to have signed up to the Belt and Road Initiative (BRI hereafter) since it was announced by President Xi Jinping in 2013, estimates for China's potential BRI investments vary significantly, from around US $1 trillion to as much as US $8 trillion. China’s spectacular economic rise over the last three decades has been accompanied by a sharp increase in its energy demand. As a result, China is the world’s largest energy consumer. As its economy continues to grow, even at lower rates than before, its dependence on oil and gas imports will increase over the next two decades.
- Topic:
- Oil, Economy, Soft Power, and Belt and Road Initiative (BRI)
- Political Geography:
- China and Asia
173. Frenemies of Sudan’s Transitional Economy
- Author:
- Yasir Zaidan
- Publication Date:
- 05-2020
- Content Type:
- Commentary and Analysis
- Institution:
- Italian Institute for International Political Studies (ISPI)
- Abstract:
- Only a few short months following the one year anniversary of the Sudanese revolution, Khartoum is facing a global pandemic and a deteriorating economic situation. Over the last decade, Sudanese people have been suffering from inflation and gas shortages as a result of losing 75 percent of its oil revenue that was assumed by South Sudan after the separation of the two states. The failing economy that contributed to the fall of the Bashir's regime is now getting worse, and the transitional government has yet to implement any fundamental reforms to rescue a weak transitional period in Sudan. The government's failure to achieve these reforms stems from deep ideological divisions inside the revolution's political coalition.
- Topic:
- Oil, Economy, and Transition
- Political Geography:
- Africa and Sudan
174. This Time is Different. The "COVID-Shock" and Future of the Global Oil Market
- Author:
- Giuliano Garavini
- Publication Date:
- 04-2020
- Content Type:
- Commentary and Analysis
- Institution:
- Istituto Affari Internazionali
- Abstract:
- Oil markets are facing a perfect storm. The scissors of supply and demand are moving against one another, generating increasing pain on the oil industry and the political and financial stability of oil-producing countries. Global oil demand is dropping due to the recession induced by the COVID-19 shut down of economic activity and transport in the most industrialized countries. Goldman Sachs predicts that global demand could drop from 100 million barrels per day (mdb) in 2019 to nearly 80 mdb in 2020.1 If confirmed, this would be single biggest demand shock since petroleum started its race to become the most important energy source in the world.
- Topic:
- International Trade and Finance, Oil, Global Markets, and Economy
- Political Geography:
- Russia, Saudi Arabia, and Global Focus
175. Eight Reasons Why the United States and Iraq Still Need Each Other
- Author:
- David Pollock
- Publication Date:
- 01-2020
- Content Type:
- Policy Brief
- Institution:
- The Washington Institute for Near East Policy
- Abstract:
- A host of crucial multilateral interests are baked into the U.S. presence, from keeping the Islamic State down, to protecting vulnerable regional allies, to preventing Iran from taking Iraq's oil revenues. The assassination of Qasem Soleimani has brought the tensions in U.S.-Iraqi relations to a boil, with militia factions strong-arming a parliamentary resolution on American troop withdrawal and various European allies contemplating departures of their own. Before they sign the divorce papers, however, officials in Baghdad and Washington should consider the many reasons why staying together is best for both them and the Middle East.
- Topic:
- Oil, Bilateral Relations, Islamic State, and Qassem Soleimani
- Political Geography:
- Iraq, Iran, Middle East, Israel, Jordan, United States of America, and Gulf Nations
176. Don’t Count Out U.S. Oil Production as a Market-Shaper
- Author:
- Patrick Clawson
- Publication Date:
- 03-2020
- Content Type:
- Policy Brief
- Institution:
- The Washington Institute for Near East Policy
- Abstract:
- Total U.S. production from all sources will remain the world’s largest no matter how low prices go, leaving Washington (and Texas) with considerable room to help domestic companies and press Riyadh and Moscow on stabilizing prices. Five years ago, U.S. shale production costs were so high that whenever oil prices dropped, the impact was felt first and foremost by American producers. Many commentators and media sources assume that is still the case, but the situation has changed dramatically. A recent IMF report with the dry title “The Future of Oil and Fiscal Sustainability in the GCC Region” listed the “breakeven price” for various sources of crude. Naturally, Gulf oil had the lowest cost at $18 per barrel, but the shocker was that U.S. shale came in second place at $22—50 percent below the average deepwater project, 80 percent below Canadian oil sands, and 90 percent below Russian onshore projects. Since costs vary widely, some projects presumably have a much lower breakeven price and some much higher, but the general findings are nonetheless striking. If the IMF is correct, then U.S. production should not be counted out, since the cost fundamentals are on its side. To be sure, the current market structure is not on U.S. shale’s side. Small U.S. producers have to raise money on financial markets and cannot rely on the deep government pockets available to producers in Russia and OPEC states. As a result, many are staring at a very dire situation.
- Topic:
- Oil, Natural Resources, Global Markets, Business, and Domestic Politics
- Political Geography:
- North America and United States of America
177. India’s energy investments: A fresh approach
- Author:
- Amit Bhandari
- Publication Date:
- 12-2020
- Content Type:
- Working Paper
- Institution:
- Gateway House: Indian Council on Global Relations
- Abstract:
- Oil is the single largest item in India’s import bill as India relies on imports for over 80% of its oil requirement. The annual import of 1.6 billion barrels of crude oil makes India vulnerable to sharp spikes in energy prices. With limited domestic reserves, India has tried to reduce its vulnerability by investing in oil and gas fields overseas. State-owned oil companies have over 50 overseas investments spread across South America, Africa, West Asia and the former-Soviet Union, all of which have large oil reserves. Investments must be made where the oil is, and often, these tend to be volatile regions. Political volatility in some places like Venezuela, Iran and Sudan/South-Sudan, for example, has led to trouble for a few of India’s investments. The purpose of investing as protection against price fluctuations gets defeated when geopolitical or other unrest leads to oil production reduction.
- Topic:
- Energy Policy, Oil, Sovereign Wealth Funds, and Investment
- Political Geography:
- South Asia, Canada, India, Australia, and United States of America
178. Ghana’s Oil Sales: Using Commodity Trading Data for Accountability
- Author:
- Alexander Malden and Denis Gyeyir
- Publication Date:
- 12-2020
- Content Type:
- Policy Brief
- Institution:
- Natural Resource Governance Institute
- Abstract:
- The coronavirus pandemic has severely impacted the Ghanaian economy, with the IMF projecting that growth will slow to just 1.5 percent in 2020 compared to December 2019’s projection of 5.8 percent. The country, like many oil-rich states, is facing the challenge of responding to the pandemic with reduced government revenues resulting from the oil price crash. The coronavirus has also exacerbated the country’s debt sustainability issues, which were already on the rise prior to the pandemic. Ghana is still a relatively new oil producer, with first production from its Jubilee field occurring in November 2010 and the first cargo sold in early 2011. However, the sector represents a significant source of revenue. Ghana’s oil revenues totaled USD 938 million in 2019. Around USD 802 million of this amount, or 86 percent, came from cargos of oil sold by the Ghana National Petroleum Company (GNPC). This oil represents the state’s share of production that it derives from in-kind royalty payments and GNPC’s carried and participating interest (CAPI) in the three oil-producing projects in the country. GNPC oil sales equaled a full nine percent of Ghana’s government revenue in 2019. Responding to the pandemic with reduced government revenues makes it more important than ever that citizens are able to analyze GNPC’s oil sales activities. In this context, in this report the authors demonstrate how publicly available data on the state’s oil sales activities can be used by civil society organizations (CSOs), government, media and other oversight actors to hold the government, GNPC and trading companies accountable for how they sell and manage Ghana’s oil and its revenues. Commodity trading activities are often opaque and do not receive the same level of scrutiny as a state’s upstream operations. This opacity can create opportunities for governance and corruption risks that result in the loss and mismanagement of potential revenues. However, Ghana is one of the most transparent countries in reporting on its commodity trading activities. GNPC, the Ministry of Finance, the Bank of Ghana, the Public Interest and Accountability Committee and Ghana Extractive Industries Transparency Initiative (GHEITI) all disclose information on the state’s oil sales activities. As one example, the MoF has disclosed information on the volume, unit price, date of sale and value for every cargo sold by GNPC to date.
- Topic:
- Debt, Oil, Accountability, Commodities, Trade, and COVID-19
- Political Geography:
- Africa and Ghana
179. The Geopolitical Consequences of Oil in Africa: The Case of Nigeria
- Author:
- Cyril Obi
- Publication Date:
- 03-2020
- Content Type:
- Journal Article
- Journal:
- Brown Journal of World Affairs
- Institution:
- Brown Journal of World Affairs
- Abstract:
- Oil endowment has been a significant factor in Africa’s history, politics, and development. The continent was positioned strategically following the global energy transition from coal to crude oil in the latter part of thenineteenth and early part of the twentieth centuries, which shaped the history of oil in Africa.1 Today, Africa’s oil reserves serve both as a supply of oil to the global market and as a node for the continued integration of the continent’s petro-economies into a volatile global oil market. However, the fortunes of Africa’s oil-producing states depend on a commodity whose price they do not determine, and they find themselves with limited options to collectively leverage their positions on the global stage. This article explores the geopolitical consequences of the imminent energy transition from oil to non-carbon and renewable sources of energy for Africa’s largest oil producer and exporter: Nigeria. It argues that the growing use of non-carbon and renewable forms of energy will impact African oil producers negatively, particularly in relation to economic growth, national stability, and diminished international influence. The potential impact of a global energy transition for Nigeria is significant for a continent whose oil producers include Algeria, Angola, Chad, Egypt, Equatorial Guinea, Gabon, Libya, and South Sudan—particularly when grappling with its emerging implications. This transi- tion assumes greater importance in the face of new oil discoveries in other Afri- can countries such as Ghana, Mauritania, Mozambique, Kenya, Tanzania, and Uganda. The new oil discoveries have revived the debate over the implications of the geopolitics of oil in Africa, as well as in an energy-hungry world that is simultaneously caught in a “global energy dilemma.”2
- Topic:
- Oil, Geopolitics, Energy, and Energy Transition
- Political Geography:
- Africa and Nigeria
180. In the Era of U.S. Energy Abundance: The Role of the Caspian Region in U.S. Policy
- Author:
- Brenda Shaffer
- Publication Date:
- 03-2020
- Content Type:
- Journal Article
- Journal:
- Brown Journal of World Affairs
- Institution:
- Brown Journal of World Affairs
- Abstract:
- For most of the last fifty years, international energy policy has been a major focus of U.S. foreign and national security policy.1 Washington has viewed en- suring the energy security of its allies—especially in Europe, Japan, and South Korea—as part of its own national security. In this approach to energy policy, the United States was unique and contrasted with most Western countries, which generally treated energy policy as part of their economic and/or environmental policies. Washington has engaged in international energy policy on the highest executive levels in the White House and established influential units within cabinet departments and agencies to promote international energy policies and to integrate them with U.S. national security and foreign policies. Within the Department of State, successive special ambassadors were appointed to promote various international and regional energy policies and, in 2011, a full Bureau of Energy Resources was established.2
- Topic:
- Foreign Policy, Energy Policy, National Security, and Oil
- Political Geography:
- North America, Caspian Sea, and United States of America