Thursday, June 9, 2016

Iraq’s Oil Revenue Up In May 2016 But Still Short Of Meeting Costs


In May 2016 Iraq’s oil revenue went up due to an increase in price for its crude. This happened despite a dip in exports. International oil prices have been going up in 2016 helping Iraq bring in much needed cash. Unfortunately the country is still not earning enough for the government to meet its minimum costs.

Last month Iraq exported an average of 3.2 million barrels of oil per day. That was back to the levels seen at the beginning of the year after the Oil Ministry reached a post-2003 high in April with 3.364 million barrels. As usual, oil sales fluctuate, and in May there was some bad weather at Basra’s ports that stopped tankers from docking and power outages that shut down infrastructure for a short period of time. Still, so far in 2016 Iraq has averaged 3.271 million barrels a day, above its 2015 mark of 3.003 million.

International oil markets have been trying to recover from a glut in supply in 2016. Iraq has been helped by that trend even as it attempts to produce as much petroleum as possible. Throughout the year prices for its oil has steadily climbed form a low of $22.21 per barrel in January to May’s $37.75, the highest price since October 2016’s $36.42.

The increase in prices meant the country took in its largest monthly revenue in nine months. In May Iraq made $3.745 billion from its exports. That still put the government in a whole as it needs an estimated $4 billion just to pay for its payroll and pensions. This deficit has forced Baghdad to go to the International Monetary Fund, other international organizations and donors to ask for assistance as well as attempt to sell bonds to raise money. Even if petroleum prices continue to rise as expected Iraq will still need this financial assistance as it has been running in the red for months now.

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
2.980
$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
$3.925
Sep
3.052
$40.32
$3.725
Oct
2.703
$39.56
$3.29
Nov
3.363
$36.42
$3.66
Dec
3.215
$29.84
$2.92
2015 Avg.
3.003
$44.81
$4.094
Jan
3.285
$22.21
$2.262
Feb
3.224
$23
$2.249
Mar
3.286
$28
$2.894
Apr
3.364
$33.25
$3.343
May
3.2
$37.75
$3.745
2016 Avg.
3.271
$28.84
$2.898

SOURCES

Chmaytelli, Maher, “Exclusive: Iraq plans $2 billion bond sale end 2016 as aid lowers borrowing costs,” Reuters, 6/3/16

Lando, Ben and Osgood, Patrick, “Oil revenues rise despite export dip,” Iraq Oil Report, 6/1/16

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