Thursday, July 7, 2016

Iraq’s Revenues Up Despite Decline In Oil Exports


Iraq’s oil exports declined for a second month in a row in June 2016. Ironically, prices continued to rise leading to an increase in revenue. Unfortunately the country was still not able to earn enough to meet its minimum budget requirements.

In June Iraq exported an average of 3.175 million barrels a day. That was down from May’s 3.2 million, and April’s 3.363, and was the lowest amount of the year. The Oil Ministry said the decrease was due to more production being diverted to generators to produce electricity during the summer heat.

Despite the drop in sales, Iraq was able to bring in more money. That was due to oil prices finally breaking the $40 amount. The last time that happened was in September 2015 when a barrel of Iraqi crude went for $40.32. In June 2016 it sold for $40.37. That earned the government $3.845 billion the highest amount of 2016, and the most since August 2015.

Unfortunately Iraq needs to earn at least $4 billion a month just to cover salaries and pensions let alone pay for the war, rebuilding and investments. In 2016 the nation has only been averaging $3 billion a month in earnings. In 2015 things were only slightly better when it averaged $4 billion, and only made that amount four out of twelve months. That has led Baghdad to raid its foreign reserves and go into debt to cover its costs. That means even if Iraq were to make $4 billion in the next month or two it would still be in a huge hole.

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
3.287
$28
$2.894
Apr
3.363
$33.25
$3.368
May
3.200
$37.75
$3.748
Jun
3.175
$40.37
$3.845
2016 Avg.
3.255
$30.76
$3.061

SOURCES

Lando, Ben, “Oil price keeps rising, covering export slippage again,” Iraq Oil Report, 7/1/16

Reuters, “Iraq’s June oil exports fall as domestic usage rises,” 7/1/16

No comments: