Iraq Has Highest Oil Earnings Of The Year In October 2010

A recent rise in oil prices provided Iraq with its highest monthly earnings of the year in October 2010. Last month Iraqi petroleum sold at $77.10 per barrel, the second highest price of the year. That earned the country $4.5 billion for the month, which surpassed the $4.4 billion Iraq made in January and September. Beforehand prices had dipped from June to August to just over $71 per barrel. Even then, October's profits were not much different from the rest of the year.

This happened despite the country's petroleum industry hitting a plateau since 2008. In that year Iraq produced an average of 2.41 million barrels a day, with exports of 1.84 million barrels a day. In 2009 production was 2.40 million barrels, and exports were at 1.90 million barrels. In the first ten months of 2010 the numbers have hardly changed with an average of 2.36 million barrels in production and 1.88 million barrels of exports. October was no different with 2.35 million barrels a day in production, and 1.89 million barrels in exports. 

The only way that Iraq can significantly increase its revenue is if prices continue to rise or production is ramped up. Petroleum prices are notoriously volatile, and the state of the world economy mitigates against any dramatic changes for the time being. On the other hand, Oil Minister Hussein Shahristani has promised a 4.2% growth in output by the end of the year, and the National Development Plan passed this year predicts 2.30 million barrels of exports in 2011, 2.50 million barrels in 2012, 2.80 million barrels in 2013, and 3.10 million barrels in 2014 because of the deals Baghdad signed with foreign petroleum companies in 2009. Few analysts believe those numbers are possible, but even a modest up tick in production could bring in a sizeable amount of money. Iraq needs to earn as much as possible since it has so many reconstruction needs. Its oil industry will be developed with the help of international firms, but the question is how long will it take, and how great will the increases be. 

Month	Total Oil Earnings	Price Per Barrel	Total Oil Production	Avg. Monthly Production (Mil/Bar/Day)	Avg. Monthly Exports (Mil/Bar/Day)
Jan. 2010	$4.4 bil	$73.97	59.7 mil bar	2.46	1.92
Feb.	$4.2 bil	$73.40	57.9 mil bar	2.44	2.05
Mar.	$4.3 bil	$76.20	57.1 mil bar	2.25	1.84
Apr.	$4.2 bil	$79.66	53.0 mil bar	2.38	1.80
May	$4.3 bil	$73.85	58.7 mil bar	2.35	1.88
Jun.	$3.8 bil	$71.10	54.7 mil bar	2.41	1.86
Jul.	$4.0 bil	$71.21	56.3 mil bar	2.30	1.82
Aug.	$3.9 bil	$71.43	55.4 mil bar	2.32	1.82
Sep.	$4.4 bil	$73.07	60.6 mil bar	2.35	2.00
Oct.	$4.5 bil	$77.10	58.7 mil bar	2.35	1.90

 
SOURCES

Razzouk, Nayla, "Iraq's October Oil Export Revenue Reaches Highest Level in Year," Bloomberg, 11/26/10

Special Inspector General for Iraq Reconstruction, "Quarterly Report to the United States Congress," 10/30/10