Kazakhstan bans oil "product" exports

frankthetank · **Posted:** Tue May 20, 2008 7:51 am

First they banned wheat exports...

Quote:

Kazakhstan on Monday banned the export of all refined oil products, news agencies reported, as the energy-rich Central Asian nation grapples with soaring fuel costs.

The announcement, made by Prime Minister Karim Masimov at a government meeting, comes just days after opposition parties called on his government to resign amid what they call a worsening economic climate.

Kazakhstan has huge oil and gas resources, but soaring prices for consumer products like diesel and other fuel are having a knock-on effect on the country's agricultural sector.

The increase in the cost of diesel and gasoline have outstripped the rate of inflation in recent months. Inflation already looks set to hit last year's rate of 18 percent.

Industry insiders insist rising fuel costs are caused by foreign demand, but the head of Kazakhstan anti-monoply body said Monday he believed there have been instances of price-fixing for some forms of fuel.

http://www.iht.com/articles/ap/2008/05/ ... el-Ban.php

dorlomin · **Joined:** Sun Aug 05, 2007 12:00 am **Posts:** 1506

Oil hits $129 and the dow loses 100 points.

Good morning America hows your day started. Been a bit of a boring morning up till now here in Europe

Edited as oil is not $109

frankthetank · **Posted:** Tue May 20, 2008 8:07 am

I think you meant...

Wonder who'll ban exports next? Mexico or Canada???

SpringCreekFarm · **Joined:** Fri Mar 03, 2006 1:00 am **Posts:** 869

Canada can't ban exports but I realize you're just being a smarty pants. :-D

Eli · **Posted:** Tue May 20, 2008 8:14 am

Great article Frank, that only makes sense that they would ban exports. Poor nations that are energy rich are better off just keeping the oil and lowering domestic prices. The export land model strikes again!

If they export the crude they may get more money but they will also import crippling inflation that destroys their populations purchasing power.

emersonbiggins · **Posted:** Tue May 20, 2008 8:22 am

pup55 · **Joined:** Wed May 26, 2004 12:00 am **Posts:** 4220

At this point, any tin-horn dictator with an attitude problem can be as powerful as OPEC. All you have to do is shut down exports for awhile to send the price through the roof.

According to the BP review, we are talking about 1.4 mbpd of crude oil production. The article states that the ban is on refined products.

Quote:

Kazakhstan has three oil refineries - at Pavlodar, Chimkent and Atyrau - with a combined capacity of over 427,000 b/d.

allbusiness

Their internal consumption is 221,000 barrels per day as of last year per the BP review, which means the effect on exports will be about 200KB/d or .2 mbpd of finished products that are not going to be on the market.

dunewalker · **Posted:** Tue May 20, 2008 8:37 am

Nevermind, Pup covered it-I erased my post.

Eli · **Posted:** Tue May 20, 2008 9:13 am

Excellent point Pup, at this point every country is KSA.

That is an important mile stone to be pointed out. It wasn't just that Saudi Arabia was a member of OPEC they were historically the one producer that could control the entire oil market. They were in charge and could even over come actions of other OPEC nations if they so chose.

Now since they have no spare capacity any producer can control the market.

shortonoil · **Posted:** Tue May 20, 2008 9:40 am

Eli said:

Quote:

Excellent point Pup, at this point every country is KSA.

That is an important mile stone to be pointed out. It wasn't just that Saudi Arabia was a member of OPEC they were historically the one producer that could control the entire oil market. They were in charge and could even over come actions of other OPEC nations if they so chose.

Now since they have no spare capacity any producer can control the market.

The situation is actually worse than what you pictured. As we discussed several years ago, the point would come when it would become more profitable for an oil producer not to sell oil than to maximize production. It looks like we at that point. Now, even a half million barrel decline in production would be more than compensated for by its increased price. Cutting a half million barrels per day would generate more revenue than what an extra half million in production could generate.

This could already be happening and we would have no way of knowing.

Prince Abdula Abi Smuck now controls the world!

pup55 · **Joined:** Wed May 26, 2004 12:00 am **Posts:** 4220

Quote:

As we discussed several years ago, the point would come when it would become more profitable for an oil producer not to sell oil than to maximize production.

In essence the Saudis said as much a few weeks ago with their statement that they are "saving some of their reserves for future generations".

The concept has not trickled down to the consumer level yet, obviously.

TheDude · **Posted:** Tue May 20, 2008 10:20 am

"Give me your tears, Gypsy, or I will take them from you."

How much were they exporting in the first place?

Asked at TOD as well. Hope this doesn't become a trend. Hoarding can only go on so long before you get some demand destruction. Or airstrikes.

Revi · **Posted:** Tue May 20, 2008 10:35 am

emersonbiggins wrote:

Didn't Borat say: "You can't have this!"

shortonoil · **Posted:** Tue May 20, 2008 10:38 am

TheDude said:

Quote:

Asked at TOD as well. Hope this doesn't become a trend. Hoarding can only go on so long before you get some demand destruction. Or airstrikes.

How much demand destruction can there be, before we start cutting into “essential services”, like food, water, medical services or housing? It may not be that much; our society has become so integrated that if the banks fail, the crops rot in the fields.

Demand destruction for oil could be analogous to demand destruction for breathable air. There may be a near limit to it occurring before one starts to gasp!

Revi · **Posted:** Tue May 20, 2008 10:45 am

We're cutting into essential services really soon. I wonder what our area is going to be like with gas at $4 a gallon and heating oil at $4.50. People will die. Old people are going to be found frozen to the floor next winter. I don't know how it's going to work.

Kazakhstan bans oil "product" exports

Who is online