LONDON: Iraq’s oil exports from its southern ports have slowed so far in September and may fall further until mid-October due to maintenance, according to shipping data and industry sources, tightening supply from Opec’s second-largest producer.
Traders, investors and oil companies are watching the level of Iraq’s exports closely as supply disruptions in Libya have tightened the market, helping to support oil prices near $112 a barrel.
Exports from Iraq’s southern terminals have averaged 1.96 million bpd in the first 12 days of September, according to shipping data tracked by Reuters. That is down from August’s average of 2.31 million bpd, but higher than the 1.8 million bpd initially scheduled in September.
The loading rate is expected to fall further in the rest of this month and the first two weeks of October, as two of the berths at the Basra Oil Terminal need to be closed in the early stages of the work, an Iraqi oil official said.
“Exports will be constrained for about a month - from the middle of September to the middle of October,” said the official who declined to be identified. “The work will go on until next year, but it will not affect the movement of the tankers.”
The work is partly designed to increase export capacity and help Iraq maintain its position as the second-largest oil producer in the Organisation of the Petroleum Exporting Countries.
Iraq has sent mixed messages about the impact of the maintenance on supplies. An official from Iraq’s South Oil Co said it would cut shipments by up to 500,000bpd, although other sources have said the drop would be less.
So far, the drop in supplies is not as steep as 500,000bpd and oil traders say there is a chance September’s exports could be revised up, as loading programmes often change. Iraq exports the bulk of its oil from its southern ports. Shipments of Kirkuk crude from northern Iraq remain far below their potential, constrained by bomb attacks on the pipeline to Turkey and a dispute with the Kurdistan Regional Government over oil and land rights.
Iraq’s oil revival, which got under way in 2010, has slowed this year due to infrastructure and security problems, keeping output below three million bpd in July, although supply is expected to start rising again later in the year.
Reuters
