Tuesday, June 5, 2018

Oil Exports and Revenue Increase In May As Iraq Pushes Ahead With Development Plans


Iraq saw across the board growth in its oil exports in May 2018. The average oil flow, prices, and revenues were all up for the month. The Oil Ministry also signed contracts with several companies after its latest auction, and oil exports from Kirkuk to Iran finally began.

Iraq’s average oil exports rose from 3.34 million barrels a day in April to 3.49 million barrels a day in May. That was due to an increase in the number of tankers that docked at the ports in Basra. Prices rose as well with a barrel of Iraqi crude going from $64.60 per barrel to $69.93. That was the high rate since November 2014. As a result, Iraq earned $7.566 billion, the most since it made $7.8 billion in July 2014. Iraq has averaged 3.4 million barrels a day in 2018, up from 2017’s mark of 3.3 million. Oil prices have also steadily rose from around $40 per barrel at the start of 2017 to over $60 for all but one month of this year.

This is good news for Baghdad that has been running a budget deficit since the oil market collapsed in 2014, and had the added costs of fighting the war against the Islamic State. The 2018 budget called for 3.8 million barrels a day in petroleum exports at $46 per barrel. While that export figure is unlikely to be met anytime soon, the increased prices will mean that Iraq will probably have a surplus this year.

Kirkuk’s oil production is climbing back up, and a plan to find a new outlet for it has finally started. In November 2017 Iraq and Iran made a preliminary deal to truck 30,000-60,000 barrels a day of petroleum from Kirkuk to a refinery in western Iran. That deal was formalized in December, but then poor security along the route delayed it. At the start of June, Iran’s Oil Ministry confirmed that the first tankers arrived. Currently Kirkuk’s oil is being sent to power plants in Kirkuk and Kurdistan, but it needs more consumers. After the federal authorities took back the province and ended Kurdish administration, its crude is no longer flowing to Turkey via the Kurds’ pipeline. The amount of oil being sent to Iran is a small amount, but it will help in the short term.

Finally, the Oil Ministry signed three contracts that came from its latest oil and gas auction. Crescent Petroleum will develop two blocks in Diyala and one in Basra, Geo-Jade won rights to a field in Diyala and one in Maysan, while United Energy Group won a license for al-Sindibad in Basra. This is all part of the plan to boost production to 5 million barrels a day.

Federal Oil Exports, Prices, Revenues 2014-2018
Month
Avg Export (Mil)
Avg Price
Earnings (Bil)
Jan 2014
2.228
$102.37
$7.073
Feb
2.799
$102.05
$7.9
Mar
2.396
$101.03
$7.507
Apr
2.51
$100.69
$7.582
May
2.58
$100.69
$8.077
Jun
2.423
$102.96
$7.47
Jul
2.442
$102.27
$7.8
Aug
2.375
$97.44
$7.172
Sep
2.542
$90.76
$7
Oct
2.461
$81.12
$6.19
Nov
2.51
$70.40
$5.238
Dec
2.94
$57
$5.195
2014 Totals
2.517
$92.39
$7.017
Jan 2015
2.535
$41.45
$3.258
Feb
2.597
$47.43
$3.449
Mar
2.980
$48.24
$3.449
Apr
3.077
$51.70
$4.8
May
3.145
$55.87
$5.447
Jun
3.187
$55.32
$5.289
Jul
3.105
$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
3.216
$29.84
$2.92
2015 Totals
3.003
$44.81
$4.094
Jan 2016
3.285
$22.21
$2.262
Feb
3.224
$23
$2.249
Mar
3.287
$28.40
$2.894
Apr
3.363
$33.38
$3.368
May
3.2
$37.78
$3.748
Jun
3.175
$40.36
$3.845
Jul
3.203
$38.28
$3.802
Aug
3.229
$29.24
$3.928
Sep
3.276
$38.89
$3.822
Oct
3.384
-
$4.426
Nov
3.47
$40
$4.216
Dec
3.52
-
$5.074
2016 Totals
3.302
-
$3.625
Jan 2017
3.321
-
$5.002
Feb
3.270
-
$4.514
Mar
3.258
$47.18
$4.766
Apr
3.253
$47.27
$4.607
May
3.261
$47
$4.623
Jun
3.273
$42.07
$4.144
Jul
3.230
$43.80
$4.386
Aug
3.216
-
$4.608
Sep
3.24
-
$4.882
Oct
3.346
$52.59
$5.456
Nov
3.502
$59.19
$6.021
Dec
3.535
$59.35
$6.504
2017 Totals
3.309
-
$4.959
Jan 2018
3.49
$63.29
$6.847
Feb
3.426
$60.14
$5.77
Mar
3.453
$59.95
$6.418
Apr
3.34
$64.60
$6.474
May
3.49
$69.93
$7.566

SOURCES

Lando, Ben, “Nationwide exports and revenues increase in May,” Iraq Oil report, 6/4/18

Al Masalah, “Oil exports rise in May,” 6/1/18

Al-Mawlawi, Ali, “Iraq’s 2018 Federal Budget: Key features and trends,” Al-Bayan Center, 3/17/18

New Sabah, “Al Luaibi announces the export of Kirkuk oil to Iran,” 11/10/17

Reuters, Iraq and Iran sign Kirkuk oil swap deal, 12/9/17
- “Iraq to sign development contracts for six blocs: oil ministry,” 6/3/18
- “Plan to truck oil from Iraq’s Kirkuk to Iran delayed by security concerns,” 2/26/18

Trend, “Iran starts oil swap with Iraq’s Kirkuk,” 6/3/18

Xinhua, “Iraq, UAE join hands to develop 3 oil, gas blocks,” 6/4/18

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