Wednesday, March 7, 2012
Yesterday I posted a composite oil production graph for Iran based on five data sources from 2000 through Jan 2012. It's interesting to contrast the Iranian production with that of Saudi Arabia, so I updated my graph for that country, based on the same sources:
I also show the rig count on the right axis. In the second half of 2011, Saudi production has been hovering a little below 10mbd while the rig count has been gradually increasing.
I then took the "average" line for each country and rescaled them so that both average 100% over the time period 2000-2012. This is what they look like together:
Two features stand out where the countries acted similarly - the response to the late nineties boom and the 2001 recession, and the production cut following the onset of the great recession in 2008.
However, other features show differences. The sharp boost in Saudi production in spring 2003 was to offset the loss of Iraqi production when the US invaded that country. The Iranians didn't help with that effort. Then the loss of about 1mbd of Saudi production in 2006-2007 was not matched by the Iranians. I interpret this as due to Saudi operational difficulties in sustaining 9.5mbd after a long period of underinvestment in their oil infrastructure since the early 1980s.
Finally, the most marked discrepancy is since the great recession. Saudi Arabia has been gradually increasing production through 2010 and then made a sharp increase in mid 2011 (in co-ordination with an IEA SPR release) to belatedly and partially compensate for lost Libyan production. They've then maintained an approximate plateau a little below 10mbd. By contrast, Iranian production has been slowly declining further, with the sharpest erosion in the last few months of the series.