(EnergyAsia, June 11 2016, Saturday) — Unplanned global oil supply disruptions averaged more than 3.6 million b/d in May 2016, the highest monthly level recorded since the US government’s energy unit began keeping such records in January 2011.
According to the Energy Information Administration (EIA), a huge surge in production losses in Canada, Nigeria, Iraq and Libya in May added to disruptions in Kuwait, Brazil and Ghana to push the world’s total unplanned supply cuts to a new monthly high.
Those losses contributed to Brent crude rising an average US$5 a barrel between April and May to reach a six-month high of over US$50 a barrel.
Canada was the main source of supply losses as wildfires in the oilsands province of Alberta reduced production by more than 800,000 b/d in May.
Nigeria suffered an average 800,000 b/d loss as terror groups and local gangs stepped up attacks on the country’s oil and natural gas infrastructure. The West African nation’s production fell to 1.4 million b/d in May, its lowest monthly level in nearly three decades.
“The infrastructure attacks are occurring in response to President Muhammadu Buhari’s restructuring and planned phase-out of the amnesty program, discontinued pipeline protection contracts to former militants, and the increased military presence in the Niger Delta,” said the EIA.
For the first five months of 2016, Nigeria has lost an average 500,000 b/d of production compared with 300,000 b/d for all of 2015. The EIA said it expects the country’s production disruptions to remain relatively high through 2017.
Iraq and Libya each lost an additional 50,000 b/d last month. Iraq’s production was disrupted by power outages and inclement weather in the Basra Gulf while Libya’s exports from Marsa al-Hariga, the country’s largest operating terminal, were temporarily halted from late-April to mid-May.
The EIA said its expects a reduction in global oil production disruptions in June, with Canada leading the way as its wildfires subside.
Oil flows from out of Libya, Nigeria, Iraq, South Sudan and Yemen will remain volatile and unpredictable as they remain hostage to conflict.