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Iraq oil exports to rebound in July amid unrest, IEA says

LANANH NGUYEN

PARIS (Bloomberg) -- Iraq should boost southern crude exports this month even after an armed insurgency disrupted the nation’s northern oil operations, according to the International Energy Agency.

Shipments from Iraq’s southern region should recover this month to about 2.6 MMbpd, compared with 2.42 million in June, barring technical problems, the Paris-based IEA said July 11. The increase will come from oil in storage tanks at Fao and added capacity from the West Qurna 2 and Majnoon fields. Production from the northern Kurdistan region surged last month even as the conflict escalated, the IEA said.

“Iraq’s southern oil fields have so far remained untouched by the violence sweeping through the north and west,” the IEA said in its monthly oil market report. “The risk remains that militants will target the region’s vital infrastructure and cause a substantial or lengthy disruption.”

Iraqi crude production fell to 3.17 MMbpd in June after fighting shut its biggest refinery at Baiji and reduced output from the northern Kirkuk field. That’s a decline of about 260,000 bpd from the previous month and compares with an average 3.3 million in the first half.

Output from the Kurdistan region increased to 360,000 bpd last month, an increase of 130,000 bpd, as ships loaded crude delivered through a pipeline to Turkey controlled by the Kurdistan Regional Government. The region is in a dispute with Iraq’s central government over land and oil rights.

Asia would be “most vulnerable” if militants strike the country’s southern oil network, which pumps almost all of Iraq’s crude exports and generates most of Baghdad’s revenue. About 60% of Basrah Light crude shipments go to Asia, with China and India the biggest buyers, the IEA said.

07/11/2014

 

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