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Coup in Gabon raises supply concerns as crude oil hits $86 per barrel
The coup in Gabon is fueling a modest increase in the prices of crude oil due to seemingly threats to exports from the country which produces about 200,000 barrels a day (bpd) of crude oil, making it the second-smallest OPEC producer.
Earlier on August 30, a cohort of senior military officers declared that they had assumed control following the announcement by the state election body that President Ali Bongo, had secured a third term. Note that Bongo’s Father had ruled as president before him for 42 years.
According to a report by Wall Street Journal, since Gabon’s coup announcement, global crude oil prices have seen a modest increase due to seeming threats to exports from the country.
“The coup and the threat of disruptions to Gabon’s oil exports are supporting oil prices, but only modestly as the nation is a minor OPEC oil producer, DNB Markets analyst Helge Andre Martinsen says. Brent crude oil is up 0.3 per cent at $85.19 a barrel.
“The nation’s output stands at a modest 190,000 barrels a day, but it has been the only African OPEC member to hit its production quotas. So far, there has been no sign of disruption to Gabon’s oil output. Still, the coup serves as a reminder of the geopolitical risk in the oil market, Martinsen says.”
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It is important to note that as of 12:50 PM (GMT+1) on Wednesday, August 30, Brent crude price was at $86 per barrel.
The Gabon coup is raising supply concerns alongside Hurricane Idalia in the United States, which has raised oil supply concerns as well.
Meanwhile, on Wednesday, Amena Bakr, OPEC’s chief correspondent posted on Twitter that so far, it appears that oil production from fields in Gabon is not affected by the military coup.
Similarly, Assala Energy, which is wholly owned by Carlyle Group (CG.O), said its oil production in Gabon has been unaffected by the military coup in the country.
“We can confirm that all our personnel are safe, our operations continue as usual and our production is not affected,” a company spokesperson said.
The private equity fund’s non-U.S. energy arm first invested in Assala in 2017 when it acquired Shell’s (SHEL.L) ageing operations in Gabon for $628 million.
However, earlier this month, Carlyle agreed to sell Assala to French producer Maurel & Prom (MAUP.PA), which owns and operates oil and gas assets in Africa, Europe and Latin America, including three licences in Gabon, for $730 million.