Wednesday, February 26, 2014

Iraq’s Oil Exports Remain At 23-Month Plateau

 
Iraq’s oil exports and revenue dropped in January 2014. The averages however remained in line with what they had been for almost two years straight now. Some new infrastructure is supposed to be completed this quarter that will boost capacity in the south. Until then Iraq’s output will remain flat-lined.

Iraq’s foreign oil sales were down in January. Last month the country averaged 2.228 million barrels a day. That was down from December’s 2.341 million barrels. 2.036 million barrels were shipped through the southern line to Basra, while 192,000 barrels flowed through the northern Kirkuk pipeline to Turkey. Those were all below average. In 2013, Iraq shipped 2.388 million barrels a day for the year with 2.16 million going through the south and 264,200 via the north. Oil Minister Luaibi blamed bad weather and attacks for the decline. The winter months usually create high waves in Basra’s ports that prevent tankers from docking there. The Kirkuk line has been a prime target for not only insurgents but also oil thieves.


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
$7.47
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
$8
Jun.
2.40
$90.09
$6.453
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
$7.846
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.
2.32
$97.40
$6.799
Jul.
2.32
$101.00
$7.272
Aug.
2.57
$104.45
$8.356
Sep.
2.07
$104.87
$6.511
Oct.
2.25
$102.57
$7.169
Nov.
2.381
$102.57
$7.238
Dec.
2.341
$102.89
$7.471
2013 Avg.
2.388
$102.33
$7.428
Jan. 14
2.228
$102.40
$7.07
 
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
September 1.90 mil/bar/day
October 2.06 mil/bar/day
November 2.281 mil/bar/day
December 2.081 mil/bar/day
2013 Avg. 2.16 mil/bar/day
January 2014 2.036 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
September 250,000 bar/day
October 193,000 bar/day
November 309,00 bar/day
December 260,000 bar/day
2013 Avg. 264,200 bar/day
January 2014 192,000 bar/day

The drop in exports led to a decline in profits. For January a barrel of Iraqi crude sold for $102.40. That brought in $7.07 billion. For 2013, Iraq averaged $7.428 billion per month. For the last four months the price for Iraqi oil has stayed at $102. Unfortunately the Oil Ministry has not been able to sustain its exports. In October it exported 2.25 million barrels, then 2.3 million in November and December before dropping back down to 2.2 million in January. Over 90% of the Iraqi government’s income comes from the sale of petroleum, and the country has a state-run economy making it one of the most petroleum dependent nations in the world.

Iraq’s oil industry can’t expand until new infrastructure comes on line. Construction of a new export platform was supposed to be finished in Basra in February, but it doesn’t look like that will happen. When it does it will provide another large increase in capacity, which has not happened since two platforms started operating in early 2012. That was the last time exports increased, and they have been on a 23-month plateau since then. Because Iraq also lacks adequate storage facilities it has to cut back on production at its oil fields if the petroleum can’t be exported. The Oil Ministry said that it was expecting large increases in output from Rumaila, Majnoon, West Qurna 1 and 2, and Zubayr from 2.4 million barrels a day to 6.95 million. That potential will be wasted if Iraq can’t speed up the completion of its infrastructure.

Iraq’s oil exports always fluctuate. January was simply one of those down months. Luckily prices have remained relatively stable so the country was still able to bring in a large amount of money. The Oil Ministry consistently states that it expects huge increases and aspires to be a dominant petroleum producer. Those plans have consistently fallen short because of bottlenecks caused by not only its infrastructure, but its bureaucracy as well. Until those problems are overcome Iraq will continue to under perform given its huge potential.

SOURCES

Agence France Presse, “Iraq oil exports down in January: ministry,” 2/19/14

Iraq Oil Report, “Iraq exports dip, preliminary West Qurna 1 decrease agreed,” 2/1/14

Reuters, “Iraq crude exports decline to 2.2 mln bpd in January, 2/1/14

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