Iraq’s oil exports and profits were down for the third
straight month in June 2013. Bad weather led to a small drop in the south. More
importantly, the northern pipeline to Turkey was down due to repairs for almost
the entire month. That points to a larger problem that the country’s oil
facilities have reached their limit as seen over the last 16 months, and there
can be no more growth in exports until new infrastructure is added.
The petroleum industry faced several problems last month.
Total exports dropped from 78.7 million barrels in April to 76.9 million in May
to 69.8 million in June. That averaged out to 2.33 million barrels a day.
That placed exports right back to where they were in December 2012 and January
2013 when they were at 2.34 million barrels and 2.35 million barrels
respectively. The southern pipeline to Basra had a slight drop from 2.19
million barrels in May to 2.13 million in June. It is still averaging more this
year, 2.169 million barrels a day, than last, 2.042 million barrels. The real
problem was with the northern Kirkuk line to Turkey. For June it only averaged
193,300 barrels a day down from 283,800 barrels the previous month. That was
the lowest amount in years. It exported a total of 5.8 million barrels in June
when it was supposed to ship 9.6 million, and an average of 309,600 barrels. Bad weather and attacks upon the northern pipeline were the reasons given
by the Oil Ministry for the lower than expected exports. Rough waters in Basra
did temporarily halt docking in the ports there in early June. There were
no reported bombings of the Kirkuk line however. Instead, it was down for
almost the entire month because of leaks and maintenance work that continues into July. Overall, Iraq’s exports have been at a plateau for the last 16
months. They are almost the same this year, 2.45 million barrels per month as
last, 2.41 million. Bad weather is seasonal. The problems with the northern
line however point to a larger issue. The country’s export infrastructure has
reached their limit, and there can be no further growth until new facilities
are opened, and old ones rehabilitated. There are plans to add two more docking
points in Basra, to build a connecting line from the northern fields to the
southern ones, to expand the capacity of the Kirkuk line, to re-open a pipeline
to Syria, and build a new one to Jordan. That’s an ambitious and aggressive
strategy. Some of it, like the line to Syria will probably never materialize
however, and due to Baghdad’s inefficient government, the rest may take far
longer than planned to come to fruition. The Oil Ministry has recently revised down its export target to 9 million barrels a day by 2018. That’s probably
unrealistic given the bureaucracy’s lack of capacity, which has made Iraq miss
all of its previous goals.
Iraq Oil Exports And Profits
2011-2013
Month
|
Avg.
Exports
(Mil/
Bar/
Day)
|
Avg. Price Per Barrel
|
Revenue (Bill)
|
Jan. 11
|
2.16
|
$90.78
|
$6.082
|
Feb.
|
2.20
|
$98.44
|
$6.064
|
Mar.
|
2.15
|
$107.13
|
$7.167
|
Apr.
|
2.14
|
$114.26
|
$7.342
|
May
|
2.22
|
$108
|
$7.45
|
Jun.
|
2.27
|
$105.17
|
$7.173
|
Jul.
|
2.16
|
$108.79
|
$7.311
|
Aug.
|
2.18
|
$104.91
|
$7.124
|
Sep.
|
2.10
|
$104.89
|
$6.619
|
Oct.
|
2.08
|
$104.04
|
$6.742
|
Nov.
|
2.13
|
$106.59
|
$6.833
|
Dec.
|
2.14
|
$106.18
|
$7.061
|
2011 Avg.
|
2.16
|
$105.00
|
$6.913
|
Jan. 12
|
2.10
|
$109.08
|
$7.123
|
Feb.
|
2.01
|
$112.92
|
$6.595
|
Mar.
|
2.31
|
$117.99
|
$8.472
|
Apr.
|
2.50
|
$116.79
|
$8.795
|
May
|
2.45
|
$103.03
|
$7.831
|
Jun.
|
2.40
|
$90.09
|
$6.487
|
Jul.
|
2.51
|
$97.14
|
$7.577
|
Aug.
|
2.56
|
$106.22
|
$8.445
|
Sep.
|
2.59
|
$107.59
|
$8.371
|
Oct.
|
2.62
|
$105.51
|
$8.578
|
Nov.
|
2.62
|
$104.32
|
$8.200
|
Dec.
|
2.34
|
$103.72
|
$7.551
|
2012
Avg.
|
2.41
|
$106.20
|
$7.835
|
Jan. 13
|
2.35
|
$104.92
|
$7.672
|
Feb.
|
2.53
|
$107.66
|
$7.644
|
Mar.
|
2.41
|
$103.76
|
$7.772
|
Apr.
|
2.62
|
$98.70
|
$7.764
|
May
|
2.48
|
$97.23
|
$7.477
|
Jun.
|
2.33
|
$97.41
|
$6.8
|
2013 Avg.
|
2.45
|
$101.61
|
$7.521
|
Oil
Exports Through Basra 2012-2013
January 2012 1.711 mil/bar/day
January 2012 1.711 mil/bar/day
February
1.639 mil/bar/day
March 1.917
mil/bar/day
April 2.115
mil/bar/day
May 2.086
mil/bar/day
June 2.085
mil/bar/day
July 2.216
mil/bar/day
August
2.252 mil/bar/day
September
2.178 mil/bar/day
October
2.172 mil/bar/day
November
2.122 mil/bar/day
December
2.022 mil/bar/day
2012 Avg. 2.042 mil/bar/day
January
2013 2.093 mil/bar/day
February
2.196 mil/bar/day
March 2.1
mil/bar/day
April 2.31
mil/bar/day
May 2.19
mil/bar/day
June 2.13
mil/bar/day
2013 Avg. 2.169 mil/bar/day
Oil Exports Through Kirkuk 2012-2013
January
2012 393,500 bar/day
February
375,800 bar/day
March
400,000 bar/day
April
393,300 bar/day
May 364,500
bar/day
June
316,600 bar/day
July
300,000 bar/day
August
312,900 bar/day
September
420,000 bar/day
October
451,600 bar/day
November
426,600 bar/day
December
325,800 bar/day
2012 Avg. 373,300 bar/day
January
2013 264,500 bar/day
February
339,200 bar/day
March
316,100 bar/day
April
306,600 bar/day
May 283,800
bar/day
June
193,300 bar/day
2013 Avg. 283,900 bar/day
Prices for Iraqi crude have also fallen recently. A barrel
of Iraqi petroleum sold for $97.41 in June, earing the country $6.8 billion down
from $7.48 billion in May and $7.76 billion in April. This was the third month
in a row that prices were below $100 per barrel after being there 23 months out
of 30 since the start of 2011. That has brought down the average price from
$106.20 per barrel in 2012 to $101.61 this year. Average monthly earnings have
gone down as well from $7.835 billion last year to $7.521 billion this year.
The 2013 budget is based upon 2.9 million barrels a day in exports at $90 per
barrel. The former is improbable, but the latter is still a reality. Iraq
relies upon oil for 90% of its revenue. Fortunately for it, the government has
never been able to spend all of its budget, especially as it has grown in size
the last few years, so not reaching the export mark is not so important as
keeping up prices.
Iraq was hoping for large growth this year in its oil
industry, but that has not materialized. There was a large spurt in exports
towards the beginning of 2012 when two new mooring points were opened in Basra.
Exports continued to climb throughout 2012 as the Kurdistan Regional Government
(KRG) and Baghdad reached a new oil deal. That fell apart, bad weather has hit,
and the northern pipeline has been plagued by problems all contributing to the
current stagnation. It doesn’t matter whether production goes up if it can’t be
pumped out to foreign markets. This is the dilemma facing Iraq right now. Until
new facilities are opened exports will remain at the current plateau.
SOURCES
Al-Ansary,
Khalid, Ajrash, Kadhim & Razzouk, Nayla, “Iraq Crude Exports Fall for
Second Month on Attacks, Bad Weather,” Bloomberg, 7/22/13
Aswat al-Iraq, “Iraqi oil
re-pumped to Turkish terminal,” 6/6/13
- “Kirkuk oil exports to Turkey resumed,” 6/21/13
- “Stoppage in Iraqi oil exports to Turkey,” 6/19/13
Chazan, Guy,
“Storm clouds threaten Iraq’s striking oil revival,” Financial Times, 7/8/13
Hafidh,
Hassan, “Iraq northern oil exports on hold for 7th day – shipping
agent,” Dow Jones, 6/27/13
Middle East Economic Survey, “Document – Iraq’s Integrated National
Energy Strategy,” 6/17/13
Platts,
“Iraq’s Kirkuk crude shut again following second failed restart,” 7/12/13
Reuters,
“Crude oil flows through Iraq-Turkey pipeline down,” 7/22/13
- “Iraq’s oil exports fall 200,000 bpd so far in June,”
6/21/13
- “Rough weather halts Iraq Basra
oil exports – shipper,” 6/10/13
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