Home / Commodities / Freight News / Iraq’s May oil exports seen at 3.3 mil b/d amid northern output suspension: official

Iraq’s May oil exports seen at 3.3 mil b/d amid northern output suspension: official

Iraq’s total oil exports in May are unlikely to exceed 3.3 million b/d amid the continued suspension of production from the semi-autonomous Kurdistan region and northern fields via Turkey, and export constraints at southern terminals, a senior Iraq oil official told S&P Global Commodity Insights May 9.

There is “limited” additional oil export capacity at southern export terminals in the Persian Gulf and the continued suspension of more than 450,000 b/d of production from Kurdistan and federal fields exported from the north via Turkey will not allow the OPEC member to boost its output, the official said.

Iraq’s federal crude exports, excluding flows from Kurdistan, in April rose 1% month on month to 3.288 million b/d, oil ministry data showed May 2.

In May, Iraq started cutting its production quota voluntarily by 211,000 b/d to 4.22 million b/d, joining seven other members in the OPEC+ alliance that announced on April 2 voluntary output cuts totaling 1.66 million b/d until the end of 2023.

The voluntary cuts are on top of the OPEC+ alliance’s collective 2 million b/d cut that started in November and will be carried through until the end of 2023.

Iraqi output in March grew by 60,000 b/d to 4.39 million b/d, according to the latest Platts survey by S&P Global.

Exports via Turkey
The prime ministers of Baghdad and Erbil agreed on a temporary deal April 4 to resume oil exports through the Turkish port of Ceyhan, but despite many pledges of a quick restart, no Iraqi crude has loaded since Ankara suspended exports March 25 due to an international arbitration ruling.

Prior to the suspension, more than 450,000 b/d of Iraqi crude flowed into Ceyhan, with about 350,000-375,000 b/d of the exports comprising Kurdish Blend Test from the semi-autonomous region’s oil fields and the remaining 75,000-100,000 b/d being federally controlled Kirkuk grade.

Iraq’s Oil Minister Hayan Abdul-Ghani said May 3 that he expected Baghdad and Erbil to finalize within two weeks the agreement to resume crude exports via Ceyhan. For exports to resume, Ankara would also need to agree to reopen the Iraq-Turkey Pipeline, which has been shuttered as a result of the dispute.

Turkey is still inspecting the oil pipelines on its side before the resumption of oil exports, Abdul-Ghani said May 3.

Baghdad claims its right to export all Iraqi oil is backed by the International Chamber of Commerce’s International Court of Arbitration ruling March 23 that independent Kurdish exports through Ceyhan were in violation of a 1973 agreement between Iraq and Turkey.

Two-month contracts
Iraq’s federal government has tasked state oil marketer SOMO with handling the exports of Kurdish crude, which had been independently sold and exported via Turkey before the ruling.

SOMO has yet to sign agreements with companies for the sale of Kurdish crude and the new contracts with existing Kurdish traders are likely to be just for two months, the Iraqi official said.

Oil volumes in the contracts have yet to be determined, but they are likely to be “small,” the official added.

Meanwhile, international oil companies operating in Kurdistan are warning they may no longer continue investing, with several forced to halt pumping due to their inability to export.

Gulf Keystone said April 27 it was weighing legal action over the halt in exports that has forced it to shut in its production.
Source: Platts

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping