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The rising tide of high oil prices is spurring upstream activity in the Middle East. The region’s rig count averaged 405 in 1Q 2018, just shy of the record 406 posted in 3Q 2017. Brent averaged $67.22/B in the first quarter, against $61.46/B in the final quarter of 2017.
Interestingly, the driver has not been the Middle East’s core GCC grouping, which has seen activity fall, but Iraq, where operating rigs rose to a three-year high of 58 (see chart).
Data from oilfield services firm Baker Hughes shows that drilling has rebounded worldwide, since falling to a 15-year low of 1,650 operating rigs in 2016, steadily rising to a three-year high of 2,269 in 1Q 2018 (see table). This ought to be music to the ears of Opec, whose members are increasingly lamenting ongoing upstream investment shortfalls ( MEES, 13 April ).
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