Iraq’s
oil exports and revenue dropped for the third straight month in September 2015.
The country has been hit by two concurrent negative trends. The first is that
the Kurds are contributing less and less to the central government’s oil flow
as the budget deal between the two sides has collapsed. Second, the glut in
world petroleum production has led to a steady decline in prices. Together they
are adding to Iraq’s financial troubles as it had a poorly planned budget, and
has added costs with the war against the Islamic State and the humanitarian
crisis it has wrought.
In
September 2015 oil sales took another hit. The country exported an average of
3.052 million barrels a day. That was down from August’s 3.079 million, July’s
3.104 million, and June’s 3.187 million exports.
Those
earlier numbers were achieved due to increased outflow from Basra’s ports and
the contributions of the Kurdistan Regional Government (KRG). In June, exports
from southern Iraq surpassed the three million mark with 3.022 million barrels
a day, a new high. In July that went up to 3.064 million, but has declined
since then with 3.021 million in August, and 3.03 million in September. At the
same time, the budget deal with the Kurds finally broke down. By May the KRG
was contributing 451,000 barrels a day to the Oil Ministry’s sales, but that
has dramatically dropped off since then. By September the Kurds were only contributing
21,500 barrels to the central government, while exporting 600,463
barrels a day independently. The Kurds were supposed to contribute a set
amount of oil each month, and in return Baghdad was to pay the region its 17%
of the budget. Neither side met their obligations, which led to recriminations
and the eventual collapse of the agreement.
At
the same time that exports have dipped so have prices. In September a barrel of
Iraqi crude sold for $40.32. That was the lowest price so far this year. In May
Iraq had the highest price of 2015 at $55.87 per barrel, but that has dropped
since then with $55.32 in June, $50.99 in July, and $40.59 in August. Along
with the decline in exports that has hurt revenue, which went from $5.447
billion in May down to $3.692 billion in September.
The
decreasing income could not come at a worst time, but it was something that
Iraq’s government failed to plan for. Currently Baghdad is facing huge bills as
it has to fight the Islamic State and deal with the 3 million displaced that
has created. That situation is made worse by the fact that the government
included unrealistic numbers in its budget for oil exports and revenue, which
provides roughly 90% of funds. Even if the Oil Ministry had met its quotas
there was going to be a deficit, and now that has sky rocketed with the falling
output and prices. Baghdad has not adequately
dealt
with that either, causing even more problems.
Iraq
Oil Exports & Revenues 2014-15
Month
|
Avg.
Exports
|
Avg.
Price
Per
Barrel
|
Earnings
(Bil)
|
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
|
$4.457
|
Apr
|
3.077
|
$51.70
|
$4.8
|
May
|
3.145
|
$55.87
|
$5.447
|
Jun
|
3.187
|
$55.32
|
$5.289
|
Jul
|
3.104
|
$50.99
|
$4.908
|
Aug
|
3.079
|
$40.59
|
$3.874
|
Sep
|
3.052
|
$40.32
|
$3.692
|
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 2.69 mil/bar/day
Jun 3.022 mil/bar/day
Jul 3.064 mil/bar/day
Aug 3.021 mil/bar/day
Sep 3.03 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
Jun 164,733 bar/day
Jul 41,000 bar/day
Aug 50,900 bar/day
Sep 21,500 bar/day
SOURCES
eKurd, “Iraqi Kurdistan News in brief – October 5, 2015,”
10/5/15
Lando, Ben, Osgood, Patrick, Van Heuvelen, Ben, Iraq, Ali
Abu, “September exports flat as Baghdad loses oil to KRG sales,” Iraq Oil
Report, 10/1/15
Salaheddin, Sinan, “Iraq’s economy, beaten by Islamic State
war and low oil prices, struggle amid rising protests,” Associated Press,
8/18/15
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