Home' Trinidad and Tobago Guardian : June 26th 2014 Contents JUNE 2014 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
INTERNATIONAL | BG27
Before Islamist fighters seized
much of northern Iraq, hope that
the recent era of stable oil prices
would last rested heavily on the
country. Its exports were expect-
ed to go on rising, providing lots of low-cost
oil at a time when the depletion of mature
fields elsewhere is beginning to bite into sup-
The International Energy Agency has pro-
jected that Iraq's production would jump from
2.5 million barrels a day now to 4.4 million
in 2015 and nearly six million by 2020. Other
forecasts had been even rosier.
As on so many occasions since 1980, how-
ever, war, sanctions and domestic upheaval
have constrained the huge potential of OPEC's
second-biggest producer. The chances of
restarting exports from northern Iraq, via a
pipeline crippled by sabotage in March, and
of investment and modernisation in the coun-
try's south, are looking slimmer by the day.
Fighting shut the Baiji refinery, Iraq's largest,
on June 18. It produces 170,000 barrels a day
of gasoline and other products. In addition to
exports, it supplies northern Iraq and Baghdad,
which now face shortages.
Though there is little chance that the Shia
south, which produces 90 per cent of Iraq's
oil, will come under the control of the insur-
gents, sabotage and terrorism are more likely,
as is political instability. Recovering from the
previous bout of sectarian conflict, in 2006,
took time. Nor is the news encouraging out-
siders to invest in the new equipment which
the ill-run oil fields need.
A crumb of good news is that the semiau-
tonomous Kurdish region of Iraq is trying to
step up exports, with another two tankers due
to be loaded at Ceyhan in Turkey this week,
on top of two previous shipments this month.
The Kurds have taken over Kirkuk, the main
oil town in the north, and claim---confusing-
ly---to have built a link from it to their own
export pipeline in only a few days.
Buyers are twitchy, though. Iraq's central
government says that it will sue anyone
involved in what it regards as illegal exports.
Amrita Sen of Energy Aspects, a consultancy,
says that, for all their sympathy with the Kur-
dish proto-state, outsiders' priority is keeping
The bad news from Iraq comes amid other
woes. Exports from Syria, once nearly 400,000
barrels a day, have fallen almost to zero.
Hopes that Libya, until recently a big oil
producer, would restore production have shriv-
eled. It returned to 1.5 million barrels a day
quickly after the civil war of 2011, to the sur-
prise of outsiders, but now has fallen back to
less than one million. Fears are mounting, Sen
says, that chaos and inactivity have seriously
harmed Libya's already-fragile oil fields. The
longer Iraq's pumps stay idle, the greater the
danger of damage there too.
For now global stocks are strong and the
main damage from events in Iraq is to expec-
tations, not to actual supply. The price of a
barrel of Brent crude rose slightly as fighting
intensified before steadying below US$115.
Saudi Arabia can pump more, up to one million
barrels a day, and America can release crude
from its Strategic Petroleum Reserve.
In the medium term, however, the outlook
is bleaker. Not everything has to go right to
keep oil flowing in the quantities and prices
that the industrialized world expects, but an
awful lot is going wrong at once.
@2014 The Economist Newspaper Ltd. Distrib-
uted by the New York Times Syndicate
Hundreds of cost-conscious soccer fans
have found a cheaper way to attend the World
Cup in one of Brazil's most expensive cities
---camping by Rio de Janeiro's Copacabana
Most of them drove thousands of miles
from other South American countries to sup-
port their national teams, avoiding expensive
flights as well as Rio's notoriously pricey
The largest contingent of supporters camp-
ing by the beach is Argentine, but Colombians,
Chileans and Ecuadoreans could also be seen
parking old cars, trailers and even small buses
turned into rolling dormitories along Avenida
Atlantica, one of Rio's most famous post-
Emmanuel Estrada, 29, and Damian Perez,
32, took four days to drive a 1984 Ford Falcon
Ranchero from Buenos Aires to Sao Paulo
for the World Cup's opening game on June
12. Then they came to Rio for Argentina's
first match on Sunday.
"We will stay here until Argentina wins
the World Cup. And certainly a few extra
days after that," Estrada, who works as a
plumber in Buenos Aires, told Reuters as he
sipped a cup of coffee he made himself, using
a portable stove.
Both are part of a larger group of 50 to 60
Argentines who drove rickety buses and vans
into Copacabana over the past weekend. Rio
will host the World Cup final on July 13.
Planning for the trip started years ago, but
travelling on the cheap was the only option
to deal with Brazil's sky-high prices and
Argentina's weak currency, which has lost
about 20 per cent of its value so far this year.
"Our money is worth nothing here," Perez
complained about Rio, where a room for two
in a dingy hotel can cost as much as US$700
during the World Cup.
While their presence has annoyed some
local residents, many Brazilians have wel-
comed them. Nor have they been hassled by
police, several campers said.
Camping is usually not allowed on Rio's
central beaches and cars must pay hourly
parking fees in most of the city, but authorities
have largely turned a blind eye to the presence
of World Cup campers so far.
A military police officer stationed near the
Argentine group said it was the responsibility
of Rio's municipal guard to take action. A
nearby municipal guard said he would only
intervene if the campers caused trouble.
Meanwhile, foreign visitors were pleased
to see an extensive police presence in Copaca-
"We feel safe here," said Fabian Alvarez, a
Chilean auto mechanic who drove over 5,000
kilometres (3,107 miles) from Santiago to
Cuiaba, where he watched Chile defeat Aus-
tralia on Friday, and then to Rio on the fol-
Alvarez said he decided to sleep in his van
after failing to find affordable hotels in Rio.
He plans to spend about one million Chilean
pesos (US$1,789) during the whole trip,
including on gasoline, food and maybe even
one more World Cup ticket.
Echoing most World Cup campers, Alvarez
said the trip was exhausting, but he would
do it again.
"It's all worth it. It's such an emotion when
we sing the national anthem in the stadium.
It gives me goose bumps."
Oil and Iraq:
Burning at both ends
World Cup fans camp
by the beach to dodge
Rio hotel prices
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