The Art and Sci­ence of Tanker Track­ing

En­ergy ▶ Lit­tle-known com­pa­nies mea­sure oil pro­duc­tion world­wide ▶ “Saudi Ara­bia and Rus­sia would like to see … the freeze is work­ing”

Bloomberg Businessweek (North America) - - Global Economics -

On Feb. 16, Saudi Ara­bia and Rus­sia, meet­ing in Doha, Qatar, agreed in prin­ci­ple to freeze their pro­duc­tion of oil at cur­rent lev­els, with Ecuador and Venezuela sign­ing on, too. All four na­tions want Iran to freeze its pro­duc­tion be­fore they do the same thing. In late March, OPEC and NON-OPEC pro­duc­ers plan to meet and fi­nal­ize the terms of the freeze.

An agree­ment may be the first step in end­ing the oil glut that’s cratered prices. But some­one has to fig­ure out if the coun­tries that pledged to freeze pro­duc­tion stick to their word. “Over the next cou­ple of months, Saudi Ara­bia and Rus­sia would like to see that the freeze is work­ing, that tanker-track­ing data doesn’t show an in­crease in out­put,” says Yasser El­guindi, an oil an­a­lyst at New York-based con­sul­tant Med­ley Global Ad­vi­sors.

The prob­lem: Data analy­ses from com­pet­ing or­ga­ni­za­tions of­ten re­sult in dif­fer­ent out­comes. The In­ter­na­tional En­ergy Agency (IEA), the Western coun­tries’ oil watch­dog, says OPEC pumped 32.6 mil­lion bar­rels a day in Jan­uary. But ask the U.S. Depart­ment of En­ergy, and the an­swer is 1 mil­lion bar­rels a day fewer. The oil-pro­duc­ing na­tions of­ten pro­vide in­com­plete data be­cause the most pre­cise fig­ures are con­sid­ered state se­crets.

OPEC tra­di­tion­ally has pub­lished a mea­sure of pro­duc­tion based on what the group calls sec­ondary sources—in ef­fect, con­sul­tants who cal­cu­late flows from a va­ri­ety of sources, in­clud­ing tanker-track­ing data. The car­tel also pub­lishes pro­duc­tion fig­ures based on in­for­ma­tion OPEC coun­tries re­lease pub­licly. At times, th­ese can be very dif­fer­ent. For in­stance, the United Arab Emi­rates has listed

0 Base­line is what each mem­ber state said it pro­duced in Jan­uary The chal­lenge is de­ter­min­ing what pro­duc­ers “are re­ally do­ing as dis­tinct to what they say they are do­ing.” ——Petro-lo­gis­tics’ web­site The DOE, IEA, and Platts said Iraq and Qatar pro­duced more oil than they re­ported

to OPEC

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