Despite the growing work of international energy firms, Iraq cannot seem to maintain a steady flow of oil exports. The Oil Ministry is putting high hopes on a new terminal opening in Basra to finally increase capacity, but even that is running into problems. In February 2012, the country’s foreign sales saw another dip for the second month in a row, reaching a fourteen month low.
Iraq’s oil exports took another hit in February 2012. Last month, the country exported an average of 2.016 million barrels a day. That was not only down from 2.145 million barrels seen in January, and below the yearly average for 2011, which stood at 2.16 million barrels, but the lowest mark since the beginning of last year. A barrel of Iraqi crude went for $112.92 last month, which was an increase from January’s $109.08, The country was not able to take advantage of that rise however, because of the low export figures. That meant it only earned $6.595 billion in February, the lowest amount in twelve months. In the first half of 2011, Iraq saw a steady increase in exports starting at 2.16 million barrels in January, then climbing to 2.22 million barrels in May, and then reached the yearly high mark at 2.27 million in June. After that, the amount of oil shipped overseas took a steady drop, never to return to 2.2 million again. At the same time, tensions in the Middle East kept prices up, so despite the uneven production Iraq was still able to earn a large amount of money. February broke that trend.
Iraq Oil Exports And Profits 2011-2012
Month | Avg. Exports (Mil/ Bar/ Day) | Avg. Price Per Barrel | Revenue (Mil) |
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 | $104.43 | $6.742 |
Nov. | 2.13 | $106.59 | $6.833 |
Dec. | 2.14 | $106.18 | $7.061 |
2011 | 2.16 | $104.96 | $6.907 |
Jan. 12 | 2.10 | $109.08 | $7.123 |
Feb. | 2.01 | $112.92 | $6.595 |
The cause of February’s decline could be due to a mix of three factors. First, at the beginning of the month, the flow of oil through Basra, which carries the vast majority of the country’s petroleum dropped from an average of 1.7 million barrels to just 480,000, because the weather was creating choppy seas, and preventing tankers from docking at the port there. Around the same time, the northern pipeline to Turkey was bombed, and shut down for three days. Finally, Iraq cut its exports to Jordan, which are shipped by truck from 10,000 barrels a day to 6,000. No reason was given for the decrease, but later the two countries announced that they would be raising shipments to 15,000 barrels a day between the two countries later on. Even without those troubles, Iraq constantly suffers from bottlenecks in its system, which causes exports to go up and down. All of these factors together can help explain why February saw such low numbers.
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| Oil Minister Luaibi (left), Deputy Premier Shahristani (center), and Premier Maliki (right) at the opening ceremony of Basra's new oil terminal, Feb. 12, 2012 (Reuters) |
These difficulties are happening despite increased production and capacity. Oil companies are currently ramping up production at some of the country’s largest fields. The country lacks adequate storage facilities however, so any large back-up in exports would mean that output would have to be cut. The first of four new single point mooring docks also started operating in Basra in February. It was supposed to open in January, but technical difficulties led to a delay. The first terminal has a capacity of around 850,000 barrels a day, which would provide a much needed boost to its foreign shipments. Still, it has taken years for the country to reach 2 million barrels a day in exports, and that slow but steady progress is likely to continue into the future, because of all the difficulties the country continues to face.
Iraq’s oil exports have always gone up and down, and February 2012 was no different. Natural, technical, and security issues were all at play, which could account for why the numbers were so low last month. There is hope for a long-term boost with the new terminal in Basra, and the other three to follow it. As with too many things in Iraq, those will probably take a long time to get up and running as is happening with the first one. In the short term, then, exports are likely to stay at around 2011’s levels, with hopes for a larger increase by the end of the year, and then heading into 2013.
SOURCES
Ajrash, Kadhim, “Iraq Oil Exports Via Turkey Resume After Sabotage, Official Says,” Bloomberg, 2/6/12
Ajrash, Kadhim and Razzouk, Nayla, “Iraq Opens Offshore Oil Facility to Boost Export Capacity,” Bloomberg, 2/12/12
Associated Press, “Iraq oil exports, revenues decline in February,” 3/25/12
Mackey, Peg, “Iraq target 200,000 bpd oil export rise for March,” Reuters, 2/10/12
Reuters, “Iraq new oil terminal loading in 10 days,” 2/7/12
- “Iraq’s oil exports climb to 888,000 bpd,” 2/4/12
Saifaddin, Dilshad, “Slight dip in Iraq’s February oil exports,” AK News, 3/1/12
Wanan, Jaafar, “Iraq cuts oil exports to Jordan by almost half,” AK News, 2/26/12
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