October Oil Exports Up For Iraq As It Continues To Violate OPEC+ Agreement

Iraq’s exports and revenues increased in October despite prices for its crude declining for the last two months.

 

In October Iraq exported an average of 2.87 million barrels a day of oil. That was up from 2.613 million barrels in September, and the highest amount since 3.2 million in May. Iraq Oil Report noted that this was due to the Oil Ministry ordering a 250,000 barrel a day increase in production last month. This was likely due to the government being desperate for funds as it is facing a huge budget deficit with the collapse in the petroleum market this year due to the COVID-19 pandemic and the Saudi-Russia price war. This also means Iraq is continuing to violate its agreement with OPEC+ to cut production to try to raise prices. Iraq has reduced production overall this year, but not enough to meet its quota. Not only does it need the money but the contracts it has with international oil companies obligates it to pay for unused production.

 

The increase in exports resulted in an increase in revenues despite prices going down. Iraq earned $3.43 billion in October up from $3.167 billion in September. Prices however have gone down since August when they were at $43.69. In September a barrel of Iraqi crude sold for $40.40 and then $38.48 in October the lowest price since June. The OPEC+ deal has raised prices, but fear over the continuing effect of the pandemic has meant there is so some uncertainty about the short term future of the oil market.

 

The slight increase in profits in October is still not enough to cover Iraq’s bills. It is still running a huge budget deficit and will need further borrowing to finish out the year.

 

Federal Oil Exports, Prices, Revenues 2019-2020

Month	Avg Export (Mil)	Avg Price	Earnings (Bil)
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	$6.121
Nov	3.5	$59.82	$6.282
Dec	3.428	$63.05	$6.7
2019 Avgs	3.527	$61.09	$6.543
Jan 2020	3.306	$60.14	$6.163
Feb	3.391	$51.37	$5.053
Mar	3.391	$32.73	$2.962
Apr	3.438	$13.80	$1.423
May	3.212	$21.00	$2.092
Jun	2.816	$33.86	$2.861
Jul	2.763	$40.70	$3.487
Aug	2.597	$43.69	$3.517
Sep	2.613	$40.40	$3.167
Oct	2.87	$38.48	$3.43
2020 Avgs	3.039	$37.61	3.415

 

SOURCES

 

Iraq Oil Report, “Oil Ministry orders 250,000 bpd October production hike,” 10/23/20

 

NRT, “Iraq Exports More Than 89 Million Barrels Of Crude Oil In October: Ministry,” 11/2/20

 

Van Heuvelen, Ben, “Iraq’s September production drops 200,00 bpd toward OPEC+ compliance,” Iraq Oil Report, 10/15/20