Wednesday, January 22, 2020

Iraq’s Oil Exports Finish On A High Note In Dec Due To Iran War Fears

(AFP/Getty Images)

Iraq saw diminishing returns from its oil exports in the second half of 2019 as oil prices dropped due to a glut in the market. Due to war fears over Iran however, profits were back up in December. At the end of the year however, Iraq finished with higher export figures, but lower revenues.

Iraq’s oil exports were down in December, but threat of a U.S.-Iran war lifted prices. Iraq exported an average of 3.428 million barrels a day at the end of the year, which was down from 3.5 million the month before. An average barrel of Iraqi crude however went for $63.05 the highest amount since May’s $66.68. That led revenues to increase from $6.282 billion in November to $6.7 billion in December. That was the highest figure since the country earned $7.329 billion, also in May. Iraq’s oil sales had been down since reaching an annual high of 3.603 million barrels a month in August because that was in violation of a production quota set by OPEC. Iraq has been trying to follow that agreement since then by cutting output at state run oil fields. Baghdad has never followed the organization’s attempts to cut production and raise prices because the government hopes to become the largest producer within the group surpassing Saudi Arabia, and its budget is almost wholly dependent upon petroleum.

The country finished the year with higher exports levels, but lower profits. For 2019, Ira averaged 3.527 million barrels of oil per month. That was the highest level ever for the country, and exceeded 2018’s 3.498 million. Again, this was largely accomplished by flaunting OPEC limits. Despite that prices dropped for most of the year despite hope that there would be a recovery in the first half of 2019. In January, prices started at $56.15 per barrel, rising to a high of $67.41 in April. After that prices fell almost every month hitting a low of $57.15 in October before rising at the end of 2019 due to tensions with Iran. Iraq finished averaging $61.09 per barrel down from 2018’s $65.61. Likewise revenues dropped from $6.953 billion per month in 2018 to $6.543 billion in 2019. The lower profits will hurt the government that has little budgetary control. It consistently raises spending, mostly going to more public sector jobs which are handed out as part of patronage networks by the ruling parties, and only cuts back when oil prices crash as they always do.

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
$6.321
Oct
3.447
$57.15
$6.107
Nov
3.5
$59.82
$6.282
Dec
3.428
$63.05
$6.7
2019 Totals
3.527
$61.09
$6.543

SOURCES

Lando, Ben, “December exports fall, but revenues rise on strong oil price,” Iraq Oil Report, 1/3/20

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