Iraq’s Oil Exports Dipped In September Leading To Drop In Revenue

(AFP)

In August 2019, Iraq produced a record level of oil, which violated its quota set by OPEC. Due to complains from that organization, Iraq reduced its output in September, leading to a drop in exports, which also cut into revenues, despite an increase in prices.

In September, Iraq exported an average of 3.576 million barrels a day. That was down from 3.603 million barrels in August. The cause was Oil Minister Ghadban ordered state owned fields in Basra to reduce production due to complaints from OPEC that Iraq was once again violating its quota. Several times the Organization has attempted to get its members to reduce production to try to raise prices after they collapsed in 2014. Baghdad has never followed those agreements, hoping to expand its industry and share of the market. Whatever cut the Oil Minister demanded, Iraq is likely still not to be in full compliance.

Prices rose for Iraqi oil in September due to tensions with Iran, but profits were down. A barrel of Iraqi crude sold for $59.14, up from $57.41 in August. That’s still below the yearly average of $61.46. That resulted in revenues going from $6.413 billion in August to $6.345 billion in September. Both were below the 2019 average of $6.603 billion per month. Despite the immediate situation in the Persian Gulf there is a glut in production, and worries about a coming world recession that are depreciating prices for petroleum. If the value of Iraqi crude continues to decline that will mean problems for the budget. Baghdad is horrible at financial planning, greatly increasing its spending when oil increases, failing to save for when the market will inevitably drop, and then falling into deficits and debt when it does.

Federal Oil Exports, Prices, Revenues 2014-2019

Month	Avg Export (Mil)	Avg Price	Earnings (Bil)
2014 Totals	2.517	$92.39	$7.017
2015 Totals	3.003	$44.81	$4.094
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	3.490	$63.29	$6.847
Feb	3.426	$60.14	$5.770
Mar	3.453	$59.95	$6.418
Apr	3.340	$64.60	$6.502
May	3.489	$69.80	$7.551
Jun	3.521	$69.32	$7.323
Jul	3.544	$69.16	$7.532
Aug	3.583	$69.65	$7.735
Sep	3.56	$74.15	$7.919
Oct	3.478	$73.38	$7.908
Nov	3.377	$61.09	$6.195
Dec	3.726	$52.80	$6.234
2018 Totals	3.498	$65.61	$6.953
Jan 2019	3.649	$56.15	$6.367
Feb	3.621	$60.83	$6.179
Mar	3.377	$63.80	$6.709
Apr	3.466	$67.41	$7.021
May	3.572	$66.68	$7.329
Jun	3.52	$60.58	$6.372
Jul	3.566	$61.15	$6.692
Aug	3.603	$57.41	$6.413
Sep	3.576	$59.14	$6.345
2019 Totals	3.55	$61.46	$6.603

SOURCES

Lando, Ben, “Nationwide oil exports dip in September,” Iraq Oil report, 10/2/19

Reuters, “UPDATE 1-Iraq oil exports fell to 3.576 mln bpd in September – oil ministry,” 10/1/19