Another example of the Export Land Model

Indonesia to withdraw from OPEC

Currently a producer a 860,000 barrels/day, Indonesia now needs all of that for domestic consumption as exports have fallen to 0.  In recent months, it has been forced to import from Iran, Saudi Arabia and Kuwait.

This is further evidence of the accuracy of the Export Land Model which explains the effect on oil exports as production peaks and domestic consumption continues to increase.  Once producing 1.3 million barrels per day, Indonesia now must keep what it can still pump for itself.  This isn’t much of an issue at the moment, but if this pattern shows up in a major exporter to the United States such as Mexico, there could be serious economic, social, political and geopolitical consequences.  In fact, Mexico’s oil exports this April were down 13% from a year ago.

Stay tuned.