LONDON: Iraq’s oil exports are rising in December towards a record high, according to loading data and industry sources, as Opec’s second-largest producer pumps more despite oil prices trading near a five-year low. The increase will add to ample supplies and may worry other members of the Opec unable to expand exports and suffering a drop in oil income after a near 50 percent drop in prices since June.
Exports from Iraq’s southern terminals have averaged at least 2.60 million barrels per day (bpd), according to shipping data for the first 23 days of December. Two industry sources who monitor the exports had similar estimates.
“This is looking very strong —massive volumes,” said an industry source, who saw southern flows rise as high as 2.80 million bpd for part of the month.
The southern oilfields produce the bulk of Iraq’s oil and the terminals are its main outlet to world markets. Located far from the parts of the country controlled by Islamic State, they have kept pumping despite the unrest.
In addition, flows of Kirkuk crude out of the Turkish port of Ceyhan have returned in December, after Baghdad reached a deal with the Kurdistan Regional Government. Iraq’s State Oil Marketing Organisation, or SOMO, has been exporting about 180,000 bpd of Kirkuk so far in December, two industry sources said. The oil is being exported in a Kurdish pipe to Ceyhan as an older line has been repeatedly attacked.
“It is all going through the Kurdish line now,” said a trade source with a company that buys Iraqi crude. “The old Kirkuk pipeline is not usable.”
That brings pipeline exports of Iraq’s main crudes to around 2.78 million bpd — close to the 2.80 million bpd record high posted in February, just before flows from Iraq’s Kirkuk fields along a pipeline running to Ceyhan were halted by a bomb attack. Northern exports may be higher if crude produced in the Kurdistan region and being shipped to Ceyhan is included, the sources said. Reuters
