The up and down nature of Iraq’s oil industry continued in
July 2016. Exports increased, while prices for the country’s crude declined.
That led to a loss in revenue. Iraq was still making more than it did at the
start of the year when revenues were at a nadir due to the collapse of the
international oil market, which helps the country as it is facing a huge budget
deficit.
The Oil Ministry announced
that Iraq exported an average of 3.2 million barrels a day in July. That was up
from June’s 3.276 million barrels, and equal to May’s 3.2 million. In April the
country reached its highest post-03 export mark at 3.363 million barrels a day.
Officials told Iraq
Oil Report that the nation has not been able to return to that level
because petroleum was being sent to refineries to produce electricity during
the summer heat wave.
The international oil market has apparently reached a new
plateau leading to a leveling off of prices. At the start of the year, the
country’s oil was going for only $22.21 per barrel. That figure went up every
month afterward until reaching $40.36 in June. In July however prices went down
to $37.71 per barrel. Iraqi oil will likely sell for around that amount for the
next several months.
The drop in prices led to a decrease in revenue. In July
Iraq earned $3.744 billion, down from $3.845 billion in June, the most the
government had earned in 2016. At the start of the year, it was making only $2
bill per month. Overall, Iraq has made an average of $3.1 billion per month in
2016. That’s still not enough to meet basic costs. Iraq has an oil dependent
state-run economy where petroleum provides around 90% of revenues. The
government needs around $4 billion a month just to pay salaries and pensions
let alone pay for the war with the Islamic State, rebuild liberated areas, pay
oil companies, and fund development projects, etc. This is creating a growing
deficit and forcing Iraq to seek out international loans like the one it just
worked out with the International
Monetary Fund. Iraq hasn’t carried out any serious reforms nor made sound
economic decisions to address this problem. Until it does so it can only hope
for prices to recover, and be subject to the fluctuations of the world oil
market.
Iraq
Oil Exports & Revenues 2015-16
|
Month
|
Avg.
Exports
|
Avg.
Price
Per
Barrel
|
Earnings
(Bil)
|
|
Jan
|
2.535
|
$41.45
|
$3.258
|
|
Feb
|
2.597
|
$47.43
|
$3.449
|
|
Mar
|
2.980
|
$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
|
$3.925
|
|
Sep
|
3.052
|
$40.32
|
$3.725
|
|
Oct
|
2.703
|
$39.56
|
$3.29
|
|
Nov
|
3.363
|
$36.42
|
$3.66
|
|
Dec
|
3.215
|
$29.84
|
$2.92
|
|
2015
Avg.
|
3.003
|
$44.81
|
$4.094
|
|
Jan
|
3.285
|
$22.21
|
$2.262
|
|
Feb
|
3.224
|
$23
|
$2.249
|
|
Mar
|
3.287
|
$28.40
|
$2.894
|
|
Apr
|
3.363
|
$33.38
|
$3.368
|
|
May
|
3.200
|
$37.78
|
$3.748
|
|
Jun
|
3.176
|
$40.36
|
$3.845
|
|
Jul
|
3.202
|
$37.71
|
$3.744
|
|
2016
Avg.
|
3.248
|
$31.83
|
$3.158
|
SOURCES
Lando, Ben, “Exports up but revenues drop in July,” Iraq Oil
Report 8/1/16
Mohammed, Aref and Rasheed, Ahmed, “UPDATE 2-Iraq’s oil
exports from south rose to 3.2 million bpd in July,” Reuters, 8/1/16
Reuters, “IMF board approves $5.34 billion standby
arrangement for Iraq,” 7/7/16
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