Thursday, January 7, 2016

Iraq Ends 2015 With A Surge In Oil Exports But At Lower Prices


Iraq finished 2015 on a good note with new highs in its oil exports. Unfortunately, that came at time when there was a glut in supply in the global petroleum market causing the country’s revenues to decline by almost 50%.

In December Iraq exported an average of 3.215 million barrels a day. That was down from November’s 3.365 million, which was a record post-2003 high. That figure was due to oil being released from storage because of bad weather the month before, which shut down the Basra ports. Otherwise, December might have had the highest average of the year. All of that oil came from the south as the Kurds have not sent any oil to Turkey for Baghdad since September. Iraq ended the year averaging 3.003 million barrels a day. That was a 19.6% increase from 2014’s 2.51 million barrels.

Iraq Oil Report pointed out two major reasons why the country’s exports have increased over the year. One was that new infrastructure came on line increasing capacity in the south. Probably the most import of which was the opening of three single point mooring points, the third of which started operating in January 2015. The second was that Iraq began selling two grades of petroleum, Basra Heavy and Basra Light. That allowed southern fields to expand production that have a heavier grade of crude.

The rise in exports came as prices continued to plummet. December a barrel of Iraq’s crude went for $29.84 the lowest price of the year. A year before the country was averaging $92.39 per barrel. It finished 2015 at less than half that price at $44.81.

For December Iraq earned $2.793 billion. Like prices that was the lowest amount of the year. In 2014 the nation averaged $7.013 billion per month. In 2015 that was down to $4.079 billion.

Like all the major oil producing countries Iraq is trying to deal with the collapse in prices by expanding exports. That is only maintaining the glut in supply. The result is that revenues continue to plummet. That will put huge strains upon Iraq that relies upon oil for almost all of its revenue. Most of the country’s development projects came to a halt in 2015. If prices keep on falling it may not even be able to meet operational costs, which are huge with a bloated public sector and a large number of pensioners.

Iraq Oil Exports & Revenues 2014-15
Month
Avg.
Exports
Avg. Price
Per Barrel
Earnings
(Bil)
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
Oct
2.7
$39.56
$3.320
Nov
3.365
$36.42
$3.67
Dec
3.215
$29.84
$2.793
2015 Avg.
3.003
$44.81
$4.079


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
Oct 2.7 mil/bar/day
Nov 3.37 mil/bar/day
Dec 3.215 mil/bar/day

2015 Oil Exports By Kurds For Baghdad
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
Oct 0.0
Nov 0.0
Dec 0.0

SOURCES

Al-Ansary, Khalid and Ajrash, Kadhim, “Iraq Says It Exported More Than 1 Billion Barrels of Oil in 2015,” Bloomberg, 1/1/16

Lando, Ben, “Iraq ends turbulent oil year on high note,” Iraq Oil Report, 1/5/15

Lando, Ben, Osgood, Patrick, “Record oil exports, but half the money,” Iraq Oil Report, 1/5/16

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