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Iraq’s Oil Exports To China Up 27.5% During First Half of 2020

Despite the turmoil of 2020 in the crude oil market, Iraq has managed to increase its oil exports to China, its main customer. In its latest weekly report, shipbroker Banchero Costa said that “oil prices began to recover after the Organization of Petroleum Export Countries (OPEC) and its allies agreed to end a price war and make their biggest-ever production cut. The deal has helped oil prices to double in the past two months by withdrawing about 10 percent of global supplies from the market. Under the OPEC+ deal, Iraq is obliged to compensate for their over-production on May and June in the coming months. In the first half of 2020, OPEC’s second-largest producer exported just 80.4 mln tonnes of crude oil, according to vessel-tracking data from Refinitiv. This represents a net decline of -9.3% y-o-y, compared to the 88.7 mln tonnes exported in the same period of 2019, and -6.9% down from the 86.6 mln tonnes exported in January-June 2018”.

Source: Banchero Costa

According to Banchero Costa, “on a monthly basis, January 2020 showed a -8.9% year-on-year drop to 14.1 mln tonnes, and February showed a -11.5% drop y-o-y to 13.0 mln tonnes, whilst March recorded a +2.0% gain y-o-y to 14.1 mln tonnes. April was -5.7% y-o-y to 14.5 mln tonnes, and May also showed a contraction of -8.9% y-o-y to 13.3 mln tonnes. In June 2020 we saw output as low as 11.4 mln tonne, shrinking -14.2% m-o-m from May 2020. This was -22.2% less than the 14.7 mln t exported during June 2019, showing that Iraq improved its compliance with OPEC+ cuts”.

“Crude oil exports from Iraq are shipped primarily to China, which also this year accounts for 35.8% of Iraq’s total. Shipments from Iraq to China have increased by +27.5% y-o-y in 1H 2020, to 28.8 mln t, from 22.6 mln t in the same period last year. Also, Iraq boosted exports to Turkey, which went up by +11.3% y-o-y to 3.6 mln t in the 1H2020. On the other hand, volumes to India from Iraq, decreased slightly by -5.4% y-o-y to 23.1 mln tonnes, from 24.4 mln tonnes in 1H 2019. India accounts for 28.7% of Iraq’s total crude oil exports this year. Exports to the EU (including the UK) shrunk by -43.2% year-on-year to 8.4 mln tonnes. Volumes to South Korea and the US weakened at 6.4 and 3.9 mln tonnes, -25.0% and -47.2% y-o-y respectively. Looking back at last year, Iraq’s total exports were 176.3 mln tonnes in the 12 months of 2019. This represented a flat change of 0.0% y-o-y, compared to the 176.4 mln tonnes exported in 2018, but +7.1% from 164.7 mln t in 2017”, Banchero Costa said.

Source: Banchero Costa

The shipbroker added that “during the whole of 2019, exports from Iraq to China expanded by +19.0% y-o-y to 50.1 mln tonnes. Exports to India increased by +8.6% y-o-y in the whole of 2019 to 49.0 mln tonnes. Volumes to the US were down -36.1% y-o-y in 2019 to 15.3 mln t. The vast majority of the crude oil exported by Iraq in 1H2020 (49.2 mln tonnes out of 80.4 mln tonnes) was shipped on VLCCs. A further 25.5 mln tonnes was shipped on Suezmaxes, only 2.7 mln tonnes on Aframaxes, and just 3.0 mln tonnes on smaller units. The vast majority of Iraqi crude exports are shipped from the port of Basrah (80.2 mln tonnes loaded in 1H2020, 99.8% of the total volumes), with sporadic cargoes from Khor Al Zubair (0.2 mln t)”, it concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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