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”
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