Editor’s Note: John Defterios is CNN’s Emerging Markets Editor and anchor of Global Exchange, CNN’s business show focused on the emerging and BRIC markets. Follow John on Twitter.
Story highlights
Airstrikes, rebels seizing oil fields and a refugee crisis would normally spell market panic
But in Iraq, which has dealing with all three issues, oil prices have remained steady
The militants storming the country's north have not taken the country's oil-rich south
And investment is still being pumped into the region, John Defterios writes
Usually, airstrikes, rebels seizing control of oil fields and refineries, plus a severe refugee crisis are a recipe for market panic.
That is the situation unfolding in Northern Iraq, but without a spike in prices, even though energy companies are retrenching.
There’s been a growing list of small and medium sized explorers who have suspended operations: London listed Afren, Dublin based Petroceltic and Abu Dhabi National Energy Company, known as TAQA here in the UAE. Chevron, a major oil company, is trimming non-essential staff and others will likely do the same.
Gulf Keystone, an early mover in the Kurdish Region, said the situation is not good, but after fortifying their facilities, production is holding steady at 25,000 barrels a day.
What we have now, after the initial panic when ISIS made its move into Iraq, are two distinct camps: Explorers suspending operations and producers battening down the hatches and producing as best they can. According to the Kurdish Regional Government, supplies up north are still above 300,000 barrels a day.
Tucked into the IEA’s latest monthly report is one of today’s harsher realities: ISIS has taken control of seven fields, which typically produce about 80 thousand barrels a day. Energy and security sources here in the region tell me that oil is starting to find its way onto the black market, offered at a heavy discount.