Iraq’s Oil Exports And Revenues Take A Slight Dip In May 2012

In April 2012, Iraq saw a large increase in its oil exports due to two new terminals in Basra opening. That resulted in the highest earnings since 1989. As ever though, the country was not been able to maintain that rate, because in May there was a slight dip in output, coinciding with a drop in international prices. Still, Iraq is pumping more petroleum and shipping it out at a higher rate than it has done in years.

May’s petroleum numbers were slightly down from the previous month's. In May, Iraq exported an average of 2.45 million barrels a day. In total, it shipped out 75.95 million barrels. That was up from April’s 75.25million. The extra day in the month led to a slight drop in the average however from 2.508 million barrels a day last month. World petroleum prices also took a drop in May leading to revenues going from $8.8 billion in April to around $8 billion in May. April was a landmark for Iraq as it was the most the country had earned from oil since before the 1990 invasion of Kuwait. According to officials, the reason why exports were down was because of maintenance in Basra, which is Iraq’s workhorse carrying around three-quarters of the country’s flow of oil to foreign markets. In the first 18 days of May, Basra exported an average of 1.94 million barrels a day, which was below the 2.11 million it saw in April. At the end of the month, the Oil Ministry also claimed it diverted a larger portion of production to domestic needs than exports. That could've been a reason why the flow through the northern pipeline was down as well. May was not a marked decline from April. Last month’s output was still far above last year’s, and foreign companies continue to boost output overall. Iraq’s oil industry has always had peaks and valleys, and the last few months were no exception.

Iraq Oil Exports And Profits 2011-2012

Month	Avg. Exports (Mil/ Bar/ Day)	Avg. Price Per Barrel	Revenue (Mil)
Jan. 11	2.16	$90.78	$6.082
Feb.	2.20	$98.44	$6+
Mar.	2.15	$107.13	$7.167
Apr.	2.14	$114.26	$7.342
May	2.22	$108	$7.45
Jun.	2.27	$105.16	$7.173
Jul.	2.16	$108.80	$7.3
Aug.	2.19	$104.92	$7.124
Sep.	2.10	$104.89	$6.619
Oct.	2.08	$104.43	$6.742
Nov.	2.13	$106.59	$6.833
Dec.	2.14	$106.18	$7.061
2011	2.16	$104.96	$6.907
Jan. 12	2.10	$109.08	$7.123
Feb.	2.01	$112.92	$6.595
Mar.	2.31	$118	$8.475
Apr.	2.50	N/A	$8.8
May	2.45	$105	$8

Oil Exports Through Basra 2012

January 1.712 mil/bar/day

February 1.711 mil/bar/day

March 1.92 mil/bar/day

April 2.12 mil/bar/day

May 2.08 mil/bar/day

Oil Exports Through Kirkuk 2012

January 393,500 bar/day

February 375,000 bar/day

March 400,600 bar/day

April 387,000 bar/day

May 366,000 bar/day

Last month was a disappointment for the Iraqi government. The Oil Ministry was hoping that it could achieve a 20% increase in exports through Basra in May. It wanted to load seven more tankers than in April. Overall, exports were supposed to reach 2.53 million barrels a day as well. With a second mooring point opening in the south, it was completely reasonable for Baghdad to expect its petroleum numbers to continue to rise, but that was not to be. For the year, the Ministry wants to achieve 3.4 million barrels a day in production, and 2.6 million barrels a day in exports. With a third mooring due to start operating in a few months, this could be one of the rare times when Iraq actually reaches its goals. The country has always set high marks, but its lack of infrastructure, attacks by insurgents, bad weather, maintenance, and bottlenecks have always prevented it from obtaining them. Some of those problems are finally being addressed, and Iraq’s output can expect continued growth.

What Iraq has been able to achieve is surpassing Iran in exports. Iran is the second largest exporter in the Organization of the Petroleum Exporting Countries (OPEC). In the first quarter of the year however, Iraq passed it with an average of 2.145 million barrels a day, compared to 2.1 million for Iran. Tehran’s output has been cut, because of international sanctions over its nuclear program. More are expected to go into affect over the coming months, so its exports are going to drop more, opening the door for Iraq to pass it. When Baghdad welcomed the return of foreign energy companies in 2009, it was hoping to become a major player in international oil markets once again. Three years later it’s starting to reach that level. 

Iraq’s oil exports will continue to fluctuate like they always have. The country still has a severe shortage of infrastructure, and other issues that continuously affect output. Despite that, foreign companies have given a huge boost to production levels. Iraq still needs millions of dollars in new pipelines, ports, storage facilities, etc. to fully exploit these increases. That will take years to complete, but in the meantime it is benefiting from high prices, which will provide it with a steady flow of cash, that accounts for 90% of the nation’s revenue. In the long run, Iraq’s petroleum industry will grow. It’s just a question of how long and by how much.

SOURCES

Agence France Presse, “Iraq April oil exports highest since 1989,” 5/1/12

- “Iraq oil income drops on lower prices,” 6/2/12

Associated Press, “Iraq’s oil exports drop by 2.2 percent in May,” 6/3/12

Lawler, Alex and Mackey, Peg, “Iraq’s southern oil exports fall from record in May,” Reuters, 5/18/12

Lando, Ben and Staff, “$39B in oil revenue through May, though exports drop,” Iraq Oil Report, 6/4/12

Rasheed, Ahmed, “RPT-UPDATE 2-Bad weather still slowing Iraq Basra oil exports-source,” Reuters, 6/4/12

Razzouk, Nayla and Dipaola, Anthony, “Iraq Oil Output Beating Iran Ends Saddam Legacy,” Bloomberg, 5/11/12

Su, Sherry, “Iraq to Boost Basrah Light Exports for Second Half of May,” Bloomberg, 5/17/12

Attacks Up, But Casualties Down In Iraq In May 2012

Iraq saw contradictory trends in May 2012. First, the summer months are approaching and militants are picking up their operations as a result. That led to a rise in attacks. At the same time, the average number of deaths for the month saw a decline. As the temperatures continue to climb in Iraq however, both figures are likely to go up as they have every year since 2003.

Two out of the three groups that track Iraqi casualties saw decreases in May 2012. Iraq Body Count has seen a three month decline going from 320 in March to 309 in April, and 207 in May. The United Nation’s Inter-Agency Information and Analysis Unit’s numbers have gone up and down from 294 in March to 320 in April, and then going down to 285 in May. Both organizations later revise their numbers, and they have always gone up. Iraq’s Health, Interior, and Defense Ministries continued to have far lower figures. They have seen a steady increase going from 112 in March to 126 in April to 132 in May. Unlike the other two, the Iraqi government has never published any corrections to its numbers. As reported before, the fact that the official numbers are so low, and Prime Minister Nouri al-Maliki is the acting Defense and Interior Minister likely means that the figures are being kept down for political reasons. The premier likes to claim that he has secured the country, and one way to show that is to have very small death counts each month.

Bombing in the Shula area of Baghdad on May 31, which was the deadliest day of the month (Reuters)

Deaths In Iraq 2011-2012

Month	Iraq Body Count	Iraqi Ministries	United Nations	Avg. Monthly Deaths	Avg. Daily Deaths
Jan. 2011	387	259	265	303	9.7
Feb.	250	167	267	228	8.1
Mar.	307	247	268	274	8.8
Apr.	285	211	279	258	8.6
May	378	177	319	291	9.3
Jun.	385	271	424	360	12.0
Jul.	305	259	381	315	10.1
Aug.	398	239	455	364	11.7
Sep.	394	185	405	328	10.9
Oct.	355	258	416	343	11.0
Nov.	272	187	264	241	8.0
Dec.	371	155	313	279	9.0
TOTALS	4,125	1,591	4,056	-	-
2011 Mo. Avg.	343	217	338	298	9.7
Jan. 2012	464	151	500	371	11.9
Feb.	293	150	254	232	8.0
Mar.	320	112	294	242	7.8
Apr.	309	126	320	251	8.3
May	207	132	285	208	6.7

Attacks In Iraq 2011-2012

Month	Attacks	Avg. Daily Attacks
Jan. 2011	416	13.4
Feb.	358	12.7
Mar.	565	18.2
Apr.	483	16.1
May	561	18.0
Jun.	545	18.1
Jul.	404	13.0
Aug.	376	12.1
Sep.	283	9.1
Oct.	406	13.0
Nov.	268	8.0
Dec.	293	9.4
TOTALS	4,958	-
2011 Mo. Avg.	413.1	13.4
Jan. 2012	330	10.6
Feb.	299	10.3
Mar.	239	7.7
Apr.	301	10.0
May	329	10.6

The average number of deaths also saw a drop in May after staying relatively stable for the previous three months. Last month, there were an average of 208 deaths per month. That was below January’s 371, February’s 232, March’s 242, and April’s 251, placing May as the lowest casualty count so far. The same was true for the average number of fatalities a day with just 6.7 in May, compared to 8.3 in April, 7.8 in March, 8.0 in February, and 11.9 in January. When Iraq Body Count and the United Nations update their numbers those averages will go up, but unless there is a large jump in the new figures, May is likely to stay one of the low points in deaths for the year.

Attacks have been going in the opposite direction. In May the U.N. counted 329 attacks, up from 301 in April, 239 in March, 299 in February, and only one less than the 330 in January. That led to an average of ten or more security incidents for four out of 2012’s five months. The trend in Iraq since the 2003 American invasion has been for there to be a jump in attacks in January as Sunni militants go after Shiites during their yearly pilgrimage that month, then for security to improve until the summer approaches, and insurgents launch an extended campaign while the weather is hot that eventually ends when winter arrives. That means the number of attacks will go up over the coming days if militants stay true to form.

Last month may turn out to be the calm before the storm. Deaths have stayed relatively low for four out of the first five months of the year. The heat is quickly approaching however, and so is the regular summer campaign of the insurgents. Today, Iraq has reached what U.S. commanders used to call the “irreducible minimum.” They meant violence had reached a nadir, which could not improve without major political compromises and changes within the country. The American military did withdraw in December 2011. The affects of that have not been felt yet, but it could result in a very small reduction in the level of militant operations. The coming months will show whether that will bring about any real changes in Iraq’s security situation.

SOURCES

Cordesman, Anthony, “Victory And Violence In Iraq: Reducing the ‘Irreducible Minimum,’” Center for Strategic and International Studies, 2/25/08

Inter-Agency Information and Analysis Unit, “Security in Iraq”

Iraq Body Count

Yacoub, Sameer, “Iraqi figures show slight growth in death toll,” Associated Press, 6/2/12