According Money Morning website, oil prices soared to its highest peak within the last two-and-a-half years on Monday because of investor supply concerns. Yemen produces about 300,000 barrels of oil per day, of which about 95% is exported.
Money Morning columnist Jon D. Markman, said that because the country sits at the crossroad of the Red Sea and the Gulf of Aden, Yemen is strategically positioned.
On a daily basis, about three million barrels of Saudi Arabian crude floats past it, mostly destined for the U.S. “That means that Yemen is positioned at a major ‘choke point’ for the regional distribution of oil. And it’s also shaping up as the next big catalyst for rising oil prices,” he said. Occidental Petroleum Corp., DNO International ASA of Norway and OMV AG of Austria have all announced they are evacuating personnel from Yemen.
“In Yemen, as elsewhere in the Middle East, expatriates are largely responsible for running the oilfields. And when those expats hit the road, oil production tends to go straight down,” said Markman.
In related news, chief executive manager of Total, Christophe de Margerie, said on Wednesday that the company’s production of Yemen LNG has not been affected by the unrest in the country, adding that the protests that hit the Middle East did not change production levels targeted by the company in 2011.
LNG is the only liquefied natural gas company in Yemen that warned its customers last month of a possible interruption of supplies and the possibility of violence in the country that might affect exports. “There has been no effect at this time. We produce at a normal level,” De Margerie told reporters in Paris during an oil summit. For the latest updates PRESS CTR + D or visit Stock Market news Today
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