Kazakhstan’s turmoil ignites the oil market.. Everyone is recalculating

Oil prices are heading to rise during the first quarter of 2022 thanks to the efforts of OPEC +, but the turmoil in Kazakhstan raised the alarm.

The turmoil in Kazakhstan has caused a state of uncertainty for some about global oil prices, especially as it is part of the OPEC + agreement, and it produces about 1.59 million barrels per day, and accordingly, production stopped as a major crisis.

Financial market experts believe that the political turmoil in Kazakhstan will increase oil prices, so that the oil-exporting countries will be the winners regarding what is happening in the richest countries in Central Asia with natural resources, especially in the event of escalation of tensions and having to stop production, which will raise the price of a barrel and support the alliance of Russia and Saudi Arabia. in OPEC+.

This will prompt OPEC + to recalculate at the next meeting, and it may have to increase production to fill the share of Kazakhstan and ensure market control in accordance with the desire of the United States of America and Japan.

And by asking about the losers in the event of stopping Kazakhstan’s oil production, we find that the country itself becomes the first to lose, along with the countries of Europe and the United States, which account for about 50% of Kazakhstan’s production, as well as Japan, India and China, and they are the oil importing countries and they hope to increase production and reduce prices within a year 2022 ongoing.

Oil prices rose today, Friday, and are heading towards recording the highest weekly increase since mid-December, due to turmoil in Kazakhstan and production interruptions in Libya, which raised concerns about supplies.

Brent crude futures rose 76 cents, or 0.9%, to $82.75 a barrel by 0939 GMT.

US West Texas Intermediate crude futures rose 77 cents, or 1%, to $80.23 a barrel.

And both are on the verge of recording a 6.5% increase in the first week of the year, with prices reaching their highest levels since the end of November, as concerns about supplies outweighed concerns that demand could be affected by the rapid spread of the Omicron mutant from the Corona virus.

Security forces appeared to take control of the streets of Kazakhstan’s largest city, Almaty, on Friday, as the president announced the restoration of most constitutional order, a day after Russia sent troops to counter an uprising.

Increases in supply from the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries (OPEC), Russia and allies, have not kept pace with demand growth.

OPEC production in December rose by 70,000 barrels per day from the previous month, much less than the increase allowed under the OPEC + agreement of 253,000 barrels per day, which restored production cut in 2020 when demand collapsed under the Covid-closures. 19.

Libya’s production fell to 729,000 barrels per day, from a high production of 1.3 million barrels per day last year, partly due to pipeline maintenance work.

Kazakhstan’s impact on the oil market

Kazakhstan’s largest oil producer has announced the adjustment of production plans at the giant Tengiz field, amid the turmoil and protests taking place in the country.

According to Bloomberg News Agency, the company “Tengischevroil”, which operates the field, said in a statement yesterday, Thursday, that “there is a temporary adjustment to production for matters related to transportation and logistics.”

She added that a number of “contract employees” had gathered in the field in support of the protesters across Kazakhstan.

The company, known by its acronym TSCO, declined to disclose further details about the size of the adjustment, although it said production operations were continuing.

TCO is a joint venture led by Chevron Corp of America, and produces about a third of Kazakhstan’s oil.

A jump in fuel prices led to protests this week in the west of the Central Asian country.

Initial disturbances spread rapidly and escalated into anti-government demonstrations, and dozens of protesters were killed by security forces, according to police.

Russia and its allies have deployed forces to help quell the unrest, which poses the biggest threat to Kazakhstan’s leadership since its independence in 1991.

Laurie Haitian, director of the Natural Resources Governance Institute in the Middle East and North Africa, said that what is happening in Kazakhstan, which is part of the OPEC + agreement, may have a significant impact on supply and the level of understanding in OPEC +, because everyone is currently looking at the possibility of stopping production from Kazakhstan, not Especially if there is a clash around the fields or any stop because of what is happening.

Kazakhstan’s share of the oil market

Recent data issued by “OPEC +” indicate that Kazakhstan’s production, scheduled for February 2022, is 1.59 million barrels per day.

At the beginning of this year, the geopolitical situation dominated the question about the supply, because of what is happening in Kazakhstan on the one hand, and what is happening between Russia and Ukraine on the other hand, in addition to the situation in Libya.

Kazakhstan economy

The republic, which extends over an area of ​​2,717,300 km2, is one of the richest countries in Central Asia with oil, natural gas, uranium and precious metals.

Kazakhstan, which has a gross domestic product of 60% of the output of the entire Central Asian region, and increased in 2020 to 416 billion dollars, is a fortunate country with a small population of 19 million, and with a large area spanning more than two million and 724 thousand square kilometers, almost equal to the area of ​​countries The Gulf Cooperation Council combined, so it is the largest landlocked country on the open sea in the world, and the ninth among its countries, where every 7 of its inhabitants square kilometers.

Oil constitutes 21% of the country’s gross domestic product in 2020, according to the World Bank, and the most prominent oil field, “Tengiz”, produces a third of Kazakhstan’s annual output, and 50% of it is controlled by the American company Chevron.

Despite its oil reserves, Kazakhstan suffers from financial crises, with an average per capita income of about $600 per month, and a gross domestic product of about $179 billion last year.

The banking system suffers from complex crises as a result of non-performing loans and widespread corruption cases.

These were the details of the news Kazakhstan’s turmoil ignites the oil market.. Everyone is recalculating for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.

It is also worth noting that the original news has been published and is available at saudi24news and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.

NEXT US military raises alert level for Europe bases: reports

Author Information

I am Joshua Kelly and I focus on breaking news stories and ensuring we (“Al-KhaleejToday.NET”) offer timely reporting on some of the most recent stories released through market wires about “Services” sector. I have formerly spent over 3 years as a trader in U.S. Stock Market and is now semi-stepped down. I work on a full time basis for Al-KhaleejToday.NET specializing in quicker moving active shares with a short term view on investment opportunities and trends. Address: 838 Emily Drive Hampton, SC 29924, USA Phone: (+1) 803-887-5567 Email: [email protected]