Geopolitical Tension On The Rise | Weekly News Update

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In this week’s news, tensions over Kurdish independence heat up as Iraq request Iranian boycotts and global players, including the US, decide whether to intervene or take a back seat to the conflict. Domestically, California charges forward with new legislation for clean transportation and autonomous vehicle testing. Developments in the global oil market, renewable energy, and truck technology are also at play.

Geopolitical Risk is on the Rise in Q42017

The late-September vote for Kurdish independence from Iraq has raised tensions in the country.  The Iraqi government has requested the surrounding countries of Turkey and Iran to boycott all trade – especially crude oil – with the northern Kurdish region following the vote.  Recent reports also suggest that border crossings between the Kurdish region and Iran have been shut down.  The United States initially spoke out against the independence referendum and its potential to destabilize the region, but have since moved to the sidelines as the event plays out.  Iraq produces around 4.4 million barrels of oil per day (mmbd), which represents nearly 5% of overall global production.  Roughly 20% of Iraq’s oil production comes from the Kurdish region.

President Donald Trump announced that he will not certify that Iran is compliant with its current nuclear deal, triggering a process that may re-impose sanctions against Iran.  There is now a 60-day timeline for Congress to decide if sanctions should be re-imposed, though the US administration would be in favor of a different option that would amend the current agreement to put stricter regulation on Iran’s nuclear and ballistics programs.  There is controversy surrounding Trump’s announcement, as it contradicts findings from the United Nation’s nuclear watchdog agencies that state Iran is complying with the accord (though the US administration contends that violations fall outside the scope of the current agreement).

Sanctions were removed from Iran in January 2016, allowing the country to increase its 2015 production level of 2.8mmbd in 2015 to a current rate of over 3.8mmbd.  Any level of sanctions would reduce oil trade activities of OPEC’s third largest producer and would place upward price pressure on global oil and refined products prices.

California Clearing the Way to Allow Driver-less Vehicles

The California DMV released a revised regulation proposal that established a path for testing completely unmanned vehicles.  Autonomous vehicles are nothing new for California, as 42 companies currently hold permits to test autonomous technology within the state.  The DMV hopes that extending regulations to allow unmanned vehicles will help further autonomous innovation.  The proposal now has a 15-day comment period with hopes to complete the regulations by the end of the year.

In Other News


Financial Times: Saudi Arabia curbs oil exports to combat glut

Saudi Arabia is allocating fewer barrels of crude for export next month and at a level below current demand, emphasizing the effort by global producers to reduce surplus inventories (7.2mil barrels/day, vs. reported demand of 7.7mil barrels/day).


Reuters: OPEC again raises demand forecast for its oil, points to 2018 deficit

OPEC forecast higher demand for its oil in 2018 on Wednesday and said its production-cutting deal with rival producers was getting rid of a glut, pointing to a tighter market that could move into a deficit next year.

Bloomberg: Ophelia Will Be the 10th Straight Atlantic Tropical Storm to Become a Hurricane

Tropical Storm Ophelia won’t come anywhere near U.S. shores, but when it strengthens to a hurricane sometime Thursday, it will achieve another distinction.  Ophelia will be the 10th straight Atlantic tropical storm to become a hurricane, a milestone last reached in 1893, said Phil Klotzbach, a storm researcher at Colorado State University in Fort Collins. “I am not quite sure what to make of it,” Klotzbach said. “It is a ‘gee-whiz’ record.

NGT News: California Gov. Signs Bundle of Clean Transportation Bills into Law

On Tuesday, Gov. Jerry Brown, D-Calif., signed several bills to strengthen California’s zero- and near-zero-emission vehicle markets and accelerate the state’s transition away from fossil-fuel-powered engines.

NGT News: EIA Charts Renewable Natural Gas’ Increasing Role in Meeting EPA Fuel Standard

Renewable natural gas (RNG), which is derived from biogas collected at landfills and other facilities, is increasingly used to meet government targets for renewable fuel production, according to an analysis from the U.S. Energy Information Administration (EIA). In 2016, the agency says, about 189 million gallons of RNG were used to meet about 82% of federal targets set specifically for cellulosic biofuel.


Argus Media: IEA sees 2018 oil price capped, market broadly balanced

Global oil demand and non-Opec supply are likely to grow by about the same volume next year, diminishing the prospect of higher oil prices should Opec production remain at 32.7mn b/d, the IEA said today.

American Shipper: USPS to Build Self-Driving Mail Truck

The United States Postal Service is partnering with the University of Michigan to build a self-driving mail delivery truck and hopes to launch a fleet of the vehicles on rural routes nationwide as soon as 2025. The USPS’ Office of the Inspector General revealed the plans in a 34-page report titled “Autonomous Vehicles for the Postal Service” that was released publicly on Oct. 2.  Researchers at the University of Michigan are expected to deliver their first semiautonomous delivery truck prototype this December, with 10 pilot prototypes debuting on rural routes in 2019.

The Verge: Toyota’s hydrogen fuel cell trucks are now moving goods around the Port of LA

A concept version of Toyota’s hydrogen fuel cell truck is running short-haul drayage routes at the Port of Los Angeles as part of a feasibility study, which figures in to the port’s efforts to reduce harmful emissions.


WSJ: Strong Chinese Crude Imports Boost Oil Prices

Oil prices jumped Friday on a mix of factors, including bullish Chinese data and geopolitical risks from oil-rich regions in the Middle East.

Transport Topics: September Trailer Orders Improve 76% Year-Over-Year

Strength in dry vans pushed U.S. trailer orders in September to near 23,000, up 76% from a year earlier, ACT Research reported.  Research company FTR pegged orders at 21,500 and noted the volume supports the company’s forecast of another strong trailer market in 2018.

This weekly publication is designed to highlight relevant industry news to provide professionals in the transportation, supply chain, and energy sectors with up-to-date information in a rapidly changing marketplace. This update is purely a compilation of industry news and as such, does not necessarily reflect the opinion of Breakthrough®Fuel. We do not warrant or guarantee accuracy or completeness of information. For additional information, please contact us at

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