Algerian Oil Output Unchanged Amid Unrest

On Tuesday, the International Energy Agency (IEA) told Reuters that Algerian production and exports had not been affected, but the agency continued to monitor the situation for new developments.

Cause for concern has increased since ExxonMobil moved to halt talks over Algerian shale assets last week over the protests and what Exxon clearly views as dangerous instability.

Protests began in mid-February with Bouteflika’s attempt to run for a fifth term as president.

Those same protests succeeded in forcing Bouteflika to publicly announce he would not be running for a fifth term; however, protests have not ceased and show no signs of letting up until the president steps down.

What Exxon is eyeing is a situation in which Bouteflika is forced to resign and what ensues in a political vacuum that leads to further unrest for the major oil producer.

Investors are now closely watching what the military’s next move will be, with news emerging today that the military chief of staff has publicly taken sides with the protesters.

Other political elite have also appeared to abandon Bouteflika, including some ruling party members and key business leaders.

In the meantime, Algeria’s state-run oil company, Sonatrach, has priced its April-loading cargoes of Saharan blend at flat to Dated Brent, Reuters reports, compared to 30 cents above Brent for March cargoes.

This will hit at the heart of the issue, which is that Bouteflika needs high oil prices to keep subsidizing his autocratic rule, and he’s not getting them.

“The debate is now focused on politics, but the real iceberg is the risk of an economic crisis in the next couple of years and no one has a strategy to tackle this,” Riccardo Fabiani, Algeria analyst at Energy Aspects, a London-based consultancy, told the Financial Times.

“Foreign reserves are falling very quickly and they probably have less than two years of import cover left.”

Source: Oilprice.com