BAGHDAD: Unplanned global oil supply disruptions hit their highest monthly level in five years in May 2016. According to data from the EIA, from April to May, disruptions grew by 800 million barrels per day as increased outages, predominately in Canada as a result of the raging wildfires in Fort McMurray, Nigeria, Iraq and Libya more than offset the reduced outages in Kuwait, Brazil and Ghana. This is in addition to other factors including rising oil demand and falling US crude oil production. As a result, there was a month-over-month increase of $5 per barrel in Brent crude oil spot prices in May.
In Nigera, an escalation in militant attacks on oil and natural gas infrastructure results in a substantial increase in supply disruptions. The country’s crude oil production fell to an average of 1.4 million barrels in May – its lowest monthly level since the late 1980s. These attacks are in response to President Buhari’s restricting and planned phase-out of the amnesty programme, discontinued pipeline protection contracts to former militants, and the increase military presence in the Niger Delta.
Southern Iraq has been affected by power outages and inclement weather in the Basra Gulf, which resulted in a 50,000 barrel per day increase to the country’s supply disruption. Libya’s largest operating oil terminal, Marsa al-Hariga, temporarily halted exports from late April to late May, which increased disruption by an average of 50,000 barrels per day. The EIA predicts that global supply outages will decrease in June as most of the recent outages are starting to subside.
