Tuesday, June 9, 2015

Iraq Reaches Another Record High In Oil Exports In May 2015


Iraq has been steadily increasing its oil exports in 2015 to new record highs. This has been accomplished due to the deal between the central and Kurdistan regional governments. The country has also benefited from a steady rise in prices as well. Still, Iraq is not making its marks set in the 2015 budget meaning that its financial problems will continue.

In May Iraq exported an average of 3.145 million barrels a day. That was a record high and surpassed April’s 3.077 million barrels, which itself was the previous high. That was made possible by the southern Basra ports exported 2.67 million barrels and the Kurds shipping 451,000 barrels a day. Iraq has not exported this much oil since 1990 when it averaged 3.5 million barrels. At the same time the 2015 budget calls for 3.3 million barrels.

The price for Iraqi crude went up as well. In May a barrel of Iraqi oil sold for $55 up from $51.70 the previous month. That was a nice increase from the start of the year when Iraq could only sell its crude for $41.45 per barrel. Again, like exports this is below the amount set in the budget, which was $56 per barrel. Still, Iraq earned $5.3 billion in May. That was the most since it made $6.12 billion in October 2014.

Iraq is slowly getting to the quotas set in the 2015 budget, but the problem is by the time it gets there it will have made itself such a hole financially it will not be able to get out of it. The Oil Ministry plans on exporting 3.3 million in June. Oil Minister Adel Abdul Mahdi recently said that he expected oil prices to reach $75 per barrel by the end of the year. Still that will be six months into the year, and even with planned increases the country will not earn enough to meet all of its obligations. The government is already operating largely on a month-to-month basis. Many projects have been shut down and some government workers not paid. The country is also dealing with massive bills to fund the war against the Islamic State. The problem as ever was that politicians with little knowledge of economics drew up the budget with unattainable objectives. The oil market was crashing due to increased production and lower expectations of international growth. That didn’t stop parliament from drafting a budget that had a deficit even if Iraq was able to meet its export and price marks. Now the nation is facing the consequences of that bad planning.

Iraq Oil Exports & Revenues 2014-15
Month
Avg.
Exports
Avg. Price
Per Barrel
Earnings
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
2.941
$56.59
$5.161
2014 Avg.
2.51
$92.39
$7.013
Jan
2.535
$41.45
$3.258
Feb
2.597
$47.43
$3.449
Mar
2.98
$48.24
$4.46
Apr
3.077
$51.70
$4.8
May
3.145
$55
$5.3

2015 Oil Exports From Basra
Jan 2.39 mil/bar/day
Feb 2.29 mil/bar/day
Mar 2.71 mil/bar/day
Apr 2.62 mil/bar/day
May 2.67 mil/bar/day

2015 Oil Exports By Kurds
Jan 153,000 bar/day
Feb 306,000 bar/day
Mar 268,000 bar/day
Apr 450,000 bar/day
May 451,000 bar/day

SOURCES

Iraq, Ali Abu, Van Heuvelen, Ben and Lando, Ben, “Oil exports keep pushing record highs,” Iraq Oil Report, 6/2/15

New Sabah, “Rising oil exports in May exceeded five billion dollars,” 6/1/15

Shamseddine, Reem, “Iraqi oil minister sees rising demand; crude at $75 by year end,” Reuters, 6/5/15

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