By JOHN P. TRETBAR
The Trump administration announced it will no longer grant waivers to countries currently importing oil from Iran. China, Japan, India, Turkey and South Korea, have continued to do business with the Islamic republic despite U.S. Sanctions. But the special wavers will not be renewed, which threatens to wipe roughly 1 million barrels per day off the market. The news sent crude futures prices up by more than three percent on Monday.
Independent Oil & Gas Service reported a slight drop in last week’s active drilling rig counts in Kansas. There were six active rigs east of Wichita, down three, and 22 in Western Kansas, down two. Drilling was underway at sites in Ellis and Stafford County. Operators are about two spud on one lease in Barton County and two in Ellis County.
Baker Hughes reported a big drop in active rigs across the U.S. for last week, down eight oil rigs and two gas rigs for a total of 1,012. Oklahoma and Texas were each down two rigs. Canada reported 66 rigs which is unchanged from the week before.
Independent Oil & Gas Service reported 17 new well completions for the week, 471 so far this year. There were four in eastern Kansas, and out of the 13 newly-completed wells in western Kansas, more than half were dry holes. There was one new completion in Ellis County.
Operators received 21 permits for drilling at new locations across Kansas last week, two east of Wichita and 19 in the western half of the state. Regulators have issued 262 new permits so far this year.
Last year the U.S. exported nearly double the amount of crude oil it sent abroad the year before. Domestic exports rose to two million barrels per day last year. According to data compiled and reported on the Web site World Oil dot com, Canada remains the largest single destination for U.S. exports, at an average 378-thousand barrels per day. That’s about 19% of the total. South Korea surpassed China to become the second-largest U.S. customer.
Industry observers report a dramatic increase in oil-by-rail shipments. According to the Association of American Railroads, U.S. shipments increased nearly 39% for the week ending April 13 compared to a year earlier, to more than 13-thousand rail cars. Canada reported a nearly 26% increase in oil-by-rail shipments.
Saudi Arabia is once again floating the idea of selling its crude oil in currencies other than the U.S. dollar, if American lawmakers pass an anti-OPEC bill. Reuters reports the Arab kingdom is preparing a strategy to deal with the possible passage of “NOPEC,” the No Oil Producing and Exporting Cartels Act. The bill is widely viewed as a non-starter, suggesting the Saudi effort is also unlikely to come to pass. Despite that, Reuters cites two sources saying the kingdom has discussed the proposal with other OPEC members.
Another source said the Saudis have broached the subject with U.S. energy officials. If the Saudis follow through, it would chip away at U.S. influence over the world’s financial markets and our ability to enforce sanctions on foreign entities. Efforts to diminish the greenback’s role in oil trading have been fairly limited to date, but would represent a coup for countries like Russia and China.