Monday, November 2, 2015

Iraq’s Oil Exports Take Large Hit Due To Poor Weather And Final End Of Kurdish Deal


Iraq’s oil exports in October 2015 were the third lowest of the year. The international energy market was unkind to the country as well with the lowest prices as well. The decline was due to poor weather that shut down the southern ports and the final end to the budget deal with the Kurdistan Regional Government.

In October Iraq’s oil exports declined 10%. Foreign sales went from 91,552,863 barrels in September to 83,000,935 in October, which averaged out to 3.052 million barrels a day down to 2.7 million. That was the third lowest export average of the year with only January, 2.535 million and February, 2.597 million having lower figures. There were two factors behind the drop. First, bad weather shut down the ports in Basra from October 28-30, which stopped the loading of crude completely. This often happens in Iraq. The other issue was that the budget deal with the Kurdistan Regional Government (KRG) finally ended. Starting in June, the Kurds decided to ship most of its petroleum for itself rather than for Baghdad. Before that, the KRG exported for the State Oil Marketing Organization (SOMO) in return for 17% of the budget. The reason why the agreement broke down was that neither side met its obligations. The Kurds sent less and less for the central government until reaching zero in October. The oil flow via the south went up since June to partially make up for this loss, but poor weather intervened last month.

Iraq faced a third issue in October, the lowest oil prices of the year. Iraqi crude sold for $39.56 per barrel last month, the first time it had dropped below $40. From April to July prices recovered a bit and surpassed $50, but have gone down since the summer. That meant Iraq only earned $3.32 billion in October, the second lowest of 2015. This will only add to the already growing budget deficit that the nation is facing.

Iraq Oil Exports & Revenues 2014-15
Month
Avg.
Exports
Avg. Price
Per Barrel
Earnings
(Bil)
Jan. 14
2.228
$102.37
$7.074
Feb
2.799
$102.05
$8.001
Mar
2.396
$101.03
$7.507
Apr
2.509
$100.69
$7.582
May
2.582
$100.69
$8.077
Jun
2.423
$102.96
$7.470
Jul
2.442
$102.27
$7.742
Aug
2.375
$97.44
$7.172
Sep
2.542
$90.76
$6.916
Oct
2.432
$81.12
$6.120
Nov
2.51
$70.40
$5.25
Dec
2.941
$56.59
$5.161
2014 Avg.
2.51
$92.39
$7.013
Jan
2.535
$41.45
$3.258
Feb
2.597
$47.43
$3.449
Mar
2.98
$48.24
$4.457
Apr
3.077
$51.70
$4.8
May
3.145
$55.87
$5.447
Jun
3.187
$55.32
$5.289
Jul
3.104
$50.99
$4.908
Aug
3.079
$40.59
$3.874
Sep
3.052
$40.32
$3.692
Oct
2.7
$39.56
$3.320


2015 Oil Exports From Basra
Jan 2.39 mil/bar/day
Feb 2.29 mil/bar/day
Mar 2.71 mil/bar/day
Apr 2.62 mil/bar/day
May 2.69 mil/bar/day
Jun 3.022 mil/bar/day
Jul 3.064 mil/bar/day
Aug 3.021 mil/bar/day
Sep 3.03 mil/bar/day
Oct 2.7 mil/bar/day

2015 Oil Exports By Kurds
Jan 153,000 bar/day
Feb 306,000 bar/day
Mar 268,000 bar/day
Apr 450,000 bar/day
May 451,000 bar/day
Jun 164,733 bar/day
Jul 41,000 bar/day
Aug 50,900 bar/day
Sep 21,500 bar/day
Oct 0.0 bar/day

SOURCES

Osgood, Patrick, Tahir, Rawaz, and Van Heveneln, Ben, “New deatisl of KRG oil deals reveal latent risks,” Iraqi Oil Report, 10/29/15

Reuters, “Iraq’s October oil exports fall to average 2.7 mln bpd – oil ministry,” 11/1/15

Sotaliraq, “Decline in oil exports for the month of October by about 84 million barrels,” 11/1/15

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