Iraq’s Oil Exports Reach New Plateau

Iraq’s oil industry has reached a new plateau. Since November 2015 it has been able to export over 3.2 million barrels a day. This has largely been due to the Oil Ministry offering two grades of crude and new infrastructure coming on line. Unfortunately, this is occurring when petroleum prices have collapsed.

Iraq exported an average of 3.286 million barrels a day in March 2016. Since November 2015 the Oil Ministry has shipped 3.365 million barrels, 3.215 million in December, 3.285 million in January, and 3.225 million in February for an average of 3.275 million barrels a day. That was higher than all of 2015’s average of 3.003 million.

New infrastructure and the introduction of two grades of oil have allowed Iraq to increase its exports. First, new mooring points in Basra came on line that facilitated increased capacity to load tankers in the south. Second, Iraq began offering Basra Heavy crude to the market, which was roughly 23% of sales in March. Basra Heavy comes from newer production in southern oil fields.

Iraq’s increased exports come at a time when oil prices have collapsed due to overproduction. That has cost the country billions as it is making roughly half of what it earned per month in 2015. Since December a barrel of Iraqi crude has been going for under $30. In March it rebounded slightly to $28 per barrel, the highest since December’s $29.84. That brought in $2.852 billion last month. For 2015 the nation was averaging $4.079 billion per month. More than 90% of the country’s revenue comes from petroleum exports. It needs an estimated $4 billion a month just to cover payroll and pensions. Baghdad is using its foreign reserves to pay its bills, while offering no real changes. The few reforms Prime Minister Haidar Abadi has offered have been met with constant opposition from both the ruling parties and the public who are unwilling to give up on their privileges even during a period of financial crisis.

Iraq Oil Exports & Revenues 2015-16

Month	Avg. Exports	Avg. Price Per Barrel	Earnings (Bil)
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
Jan	3.285	$22.21	$2.26
Feb	3.225	$23	$2.2
Mar	3.286	$28	$2.852

SOURCES

Lando, ben, Osgood, Patrick, Van Heuvelen, Ben, “March exports strong despite disruptions,” Iraqi Oil Report, 4/1/16

Reuters, “Iraq’s March oil exports from south 3.286 mln bpd: South Oil,” 4/1/16