The Middle East leading oil producers have opened collectively a gateway to the future. After years of lagging behind IOCs such as Shell, ENI or Total, GCC based NOCs have stepped up to the challenge. Formerly led by Saudi Arabia’s oil giant Aramco, others are now pushing for a new and leading role in IOT, IA and further digitalization. As indicated at ADIPEC 2018, Abu Dhabi National Oil Company (ADNOC) has taken over the helm, showing its appetite to enter in full force the 21st Century. As ADNOC’s CEO Sultan Al Jaber said to the audience, a new digital strategy is not only needed to counter known threats but to increase the overall reliability and commercial attractiveness of the sector for the future. In the middle of a conservative hydrocarbon audience, used to implement proven upstream and downstream technologies, ADNOC’s CEO Sultan Al Jaber, one of the region’s young future leaders, put this message out with a bang.
Ongoing developments around the construction of an East Med offshore gas pipeline to Europe, involving Israel, Cyprus, Greece and Italy, could present the current participants with several severe challenges.
After two days of heated internal discussions, OPEC seems to have reached a production cut agreement. OPEC officials have stated that the oil cartel has agreed on an 800,000-barrel per day (bpd) production cut, while non-OPEC is being asked to commit to around 400,000 bpd to be cut at the same time. The overall agreement will become effective in January 2019. Optimism surfaced straight away within the oil markets as crude oil prices jumped immediately after the news.
The Suez Canal is regaining its high strategic profile. Offshore oil and gas discoveries in the East Mediterranean basin drive this evolution, along with military developments in Syria and the heightened tension between NATO members Turkey and Greece. Egypt’s military analysts worry about possible military activity by the Turkish, Syrian and even Russian naval forces in case of an escalation around Cyprus, Syria or Israel. As a consequence, Egypt is seeking to expand its own naval and air forces.
The full impact of U.S. sanctions on Iran is still to be assessed, as major underlying factors remain opaque.