Iraq witnessed the highest level oil exports in December
2014 in decades. At the same time, its increased oil production is only adding
to the glut on the international market, which has seen a dramatic drop in
prices. The result is that the country can expect lower revenues into the near
future.
December was a landmark date for Iraq’s post-2003 oil industry.
The country exported an average of 2.94
million barrels a day, up from 2.51
the previous month. That was the most seen since 1980 according to an Oil
Ministry spokesman. The cause of the increase was the implementation of the deal
between Baghdad and Irbil, under which the latter would send 250,000 barrels a
day in oil to the state run oil company from fields in Kurdistan, and another
300,000 barrels a day from the Kirkuk fields, which it now occupies. In return,
the Kurdistan Regional Government (KRG) was assured it would get 17% of the
national budget, and the peshmerga would be funded by
Baghdad.
For the year Iraq saw an average of 2.51 million barrels a
day in exports. That was more than 2013’s 2.386, but only 100,000 barrels more
than 2012’s 2.41 million barrels. 2013
was a difficult year for Iraq’s oil industry. There were major leaks and
attacks on the northern Kirkuk pipeline. More importantly, at the end of 2012
the KRG stopped cooperating with the central government due to arguments with
Prime Minister Nouri al-Maliki. The premier objected to the Kurds’ independent
oil strategy, which included signing contracts with foreign companies and
building its own pipeline to Turkey. Maliki retaliated by stopping payments to
Kurdistan and blacklisting energy corporations that operated there.
Iraq
Oil Exports And Profits 2011-2014
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
|
$7.160
|
Nov.
|
2.381
|
$102.57
|
$7.324
|
Dec.
|
2.341
|
$102.89
|
$7.470
|
2013
Avg.
|
2.386
|
$102.33
|
$7.435
|
Jan. 14
|
2.228
|
$102.37
|
$7.074
|
Feb
|
2.799
|
$102.05
|
$8.001
|
Mar
|
2.396
|
$101.03
|
$7.507
|
Apr
|
2.509
|
$100.69
|
$7.582
|
May
|
2.582
|
$100.69
|
$8.077
|
Jun
|
2.423
|
$102.96
|
$7.470
|
Jul
|
2.442
|
$102.27
|
$7.742
|
Aug
|
2.375
|
$97.44
|
$7.172
|
Sep
|
2.542
|
$90.76
|
$6.916
|
Oct
|
2.432
|
$81.12
|
$6.120
|
Nov
|
2.51
|
$70.40
|
$5.25
|
Dec
|
2.94
|
$57
|
$5.247
|
2014
Avg.
|
2.51
|
$92.39
|
$7.013
|
The glut in world oil markets caused a drastic decline in prices
for Iraq’s petroleum. A barrel of Iraqi crude sold for $57 in December and
$70.40 in November. Since 2011 the country had seen over $100 a barrel nearly
every month. In 2011, prices averaged $105.00 per barrel, $106.20 in 2012, and
$102.33 in 2013. In 2014 the price went down to $92.39. The result of that
change was that Iraq earned $5.247 billion in December compared to the yearly
average of $7.013 billion.
Iraq is in a precarious situation. Oil accounts for more
than 90% of the country’s revenue. This year’s draft
budget calls for 3.3 million barrels a day in exports at $60 per barrel.
Prices have already dropped below that level. The result is that the country
might face decreased earnings for the foreseeable future until energy markets
turn around, and there’s no timeline for when that will happen.
SOURCES
Agence Frane Presse, “Iraq oil exports soar but low prices
hit revenue,” 1/3/15
Al-Najar, Kamaran, Lando, Ben, “November exports rise ahead
of expected surge,” Iraq Oil Report, 12/10/14
Osgood, Patrick, Van Heuvelen,
Ben, “Analysis: 5 key takeaways from Iraq’s 2015 draft budget,” Iraq Oil
report, 1/1/15
Rudaw, “Erbil, Baghdad confirm agreement on oil and budget
dispute,” 12/2/14
Van Heuvelen, Ben and Lando, Ben, “Analysis: Iraq’s oil
disputes remain unresolved,” Iraq Oil Report, 12/10/14
No comments:
Post a Comment