Wednesday, October 2, 2013

Iraq’s Oil Profits Bounce Back In August 2013 With Higher Exports And Rising Prices Due To Fears Over Syria

 
August 2013 saw Iraq’s oil industry bounce back. Its exports had been declining for three months before they rebounded in August, and so did the price for its crude. The latter was due to fears of an American strike upon Syria for its alleged use of chemical weapons. That set off international petroleum markets to Baghdad’s benefit. Iraq however is still stuck in a 17-month plateau that it is hoping to escape after major renovation work is completed on its southern oil infrastructure.

Iraq’s petroleum exports and profits both increased in August. For the month it averaged 2.57 million barrels a day, the second highest mark for the year. The Basra pipeline maintained its level from the previous month going from an average of 2.32 million barrels in July to 2.30 million in August. The cause of the country’s recovery was the Kirkuk line to Turkey, which finally overcame a huge number of leaks that put it out of action for most of June and July. It went from 283,800 barrels in May to 193,300 in June then 180,600 in July to 270,900 in August. That extra supply came just in time as the price for Iraqi crude went up as well to $104.45. From August to June Iraqi crude was selling for below $100 per barrel, but then finally started going up in July on renewed tensions in the Middle East. That culminated in a spike in August as commodity traders were scared by news that the United States might strike Syria for its alleged use of chemical weapons. How exactly that was supposed to affect the world petroleum market was not clear as Damascus is not a major player, but traders used it to their advantage to boost prices, and Iraq came out a winner as a result. For August, it earned $8.356 billion the highest amount since $8.578 billion in October 2012. In 2013, Iraq has averaged 2.45 million barrels just slightly above 2.41 million in 2012, while prices have dropped from $106.20 last year to $101.90 this year. That has meant profits have stagnated as well going from an average of $7.835 billion per month in 2012 to $7.594 billion in 2013. After the Oil Ministry opened up some new mooring points in Basra at the beginning of 2012 there has been no meaningful growth in the country’s exports leaving it at a plateau for the last 17-months. Baghdad is hoping to overcome that issue with some major maintenance work in the south, which started in September, followed by new mooring points and some more infrastructure additions.

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
$6.799
Jul.
2.32
$101.00
$7.272
Aug.
2.57
$104.45
$8.356
2013 Avg.
2.45
$101.90
$7.594

Oil Exports Through Basra 2012-2013
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
July 2.32 mil/bar/day
August 2.30 mil/bar/day
2013 Avg. 2.204 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
July 180,600 bar/day
August 270,900 bar/day
2013 Avg. 269,375 bar/day

The ups and downs that Iraq’s hydrocarbon sector has experienced in the last few months are the norm. Leaks, bad weather, and repair work often occur causing exports to fluctuate. August was simply one of those months when those issues did not have a large affect. The early numbers for September however point to a decline due to the work in Basra. The Oil Ministry is hoping that it can overcome some of those issues when new infrastructure is added. That can’t happen quickly enough as the country still has not reached its vast potential.

SOURCES

Agence France Presse, “Iraq oil exports ‘rebound in August,’” 9/1/13

Dananer, “Start exporting oil from Gharraf field 35 thousand barrels per day,” 9/1/13

Al Rafidayn, “Iraq’s oil exports rise in August thanks to the southern fields,” 9/2/13

Rasheed, Ahmed, “Iraq undecided on full Basra oil port maintenance in Sept,” Reuters, 8/15/13

Razzouk, Nayla, “Iraq Threatens to Cut Revenue to Kurds Over Pipeline,” Bloomberg, 9/24/13

Republic of Iraq Ministry of Oil, “Iraq Crude Oil Exports – August 2013,” 10/1/13

Reuters, “Iraq southern oil exports drop in Sept,” 10/1/13

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