Tuesday, November 8, 2011

Iraq’s Oil Exports Have Declined For Last Fourth Months


For the last four months, Iraq has seen a steady decline in its oil exports even though production has gone up. The major reason is that the country’s oil industry is at capacity. Monthly fluctuations have been the result of attacks, equipment problems, and recently, bad weather. That’s reflected in October 2011’s numbers.

October saw another drop in Iraq’s exports. It had an average of 2.08 million barrels per day for the month. That was down from 2.10 million barrels in September, and 2.19 million in August. Prices for Iraqi crude have also stabilized at roughly $104 per barrel for the last three months. That earned Iraq $6.7 billion last month, up from $6.6 billion in September. The Oil Ministry said that it was able to bring in more money in October than September despite the lower exports because October has more days than September. After reaching a yearly high of 2.27 million barrels in June, exports have gone down since then. That has been because of a wide variety of reasons from bombings of pipelines and oil fields to maintenance issues. October was no different.

Last month’s decline was due to three reasons. First, bad weather hit the port of Basra, which accounts for the vast majority of Iraq’s oil flow. Exports went from an average of 1.63 million barrels a day from the south, then dropped for three days beginning on October 27, and then completely stopped on October 30. On the last day of the month, it shipped 960,000 barrels. Second, there was a bombing at the Rumaila oil field, the largest in the country. On October 7, bombers struck some pipelines at the field, cutting production from 1.24 million barrels per day to 530,000. It took three days to restore and repair the damage. Finally, leaks in the northern pipeline to Turkey shut it down from the end of September until the beginning of October. Nearly every month, Iraq faces one or more of these problems. The country’s oil infrastructure has been a favorite target of insurgents since 2003, and every couple months it is still struck until this day. The facilities in Basra are also vulnerable to fluctuations in the weather that can create rough seas making it impossible for ships to dock there. The infrastructure is also old, not having been upgraded for decades, and thus has a huge number of repair issues going on with it.

2011 has witnessed new highs in oil production and exports for Iraq. In 2009, it auctioned off a number of petroleum fields to foreign energy companies, and they have been hard at work since then to boost the country’s output. That has led to over 2 million barrels of day in exports each month, and just under 3 million barrels a day in total production, something that had not been achieved consistently since the 2003 invasion. At the same time, Iraq has not been able to significantly go past that mark because its export facilities are at capacity. To add to that, the oil industry faces constant problems like old equipment to terrorist bombings. That has driven down exports for the last few months. Until the whole industry is thoroughly renovated, something that the government plans to do, these trends will continue.

Iraq Oil Exports And Profits 2010-2011
Month
Avg. Exports
(Mil/
Bar/
Day)
Avg. Price Per Barrel
Revenue
(Mil)
Jan. 10
1.92
$73.97
$4.441
Feb.
2.05
$73.04
$4.229
Mar.
1.84
$76.20
$4.351
Apr.
1.80
$79.66
$4.222
May
1.88
$73.85
$4.335
Jun.
1.86
$71.10
$3.889
Jul.
1.82
$71.21
$4.009
Aug.
1.82
$71.43
$3.957
Sep.
2.02
$73.07
$4.428
Oct.
1.91
$77.10
$4.526
Nov.
1.92
$80.59
$4.618
Dec.
1.95
$86.31
$5.222
Jan. 11
2.16
$90.78
$6.082
Feb.
2.20
$98.44
$6+
Mar.
2.15
$107.13
$7.167
Apr.
2.14
$114.26
$7.342
May
2.22
$108
$7.45
Jun.
2.27
$105.16
$7.173
Jul.
2.16
$108.80
$7.3
Aug.
2.19
$104.92
$7.124
Sep.
2.10
$104.89
$6.619
Oct.
2.08
$104.04
$6.742

SOURCES

Aswat al-Iraq, “URGENT: Erosion of main pipeline stops Iraq’s oil exports through Turkey,” 9/29/11

Hafidh, Hassan, "UPDATE: Iraq Oct Oil Exports Down 0.6% On Month At 2.088M B/D - SOMO," Dow Jones, 11/1/11

Mohammed, Aref, “UPDATE 2-Bombs shut Iraq’s Rumaila south output, exports OK – Oilmin,” Reuters, 10/8/11

Reuters, “Iraq Oil Exports Down in October,” Iraq Business News, 11/1/11
 

2 comments:

tank cleaning NH said...

Wow, I hope Iraq would still have enough oil left for the future generation.

Joel Wing said...

Iraq has plenty of oil. That's not the problem. It's the pipelines and ports that are the problem. They can't handle the load being pumped right now.