Iraq’s oil exports to fall for a third month in July

Iraq’s oil exports to fall for a third month in July

Southern exports fall to 2.07 mbpd so far in July; Northern exports lower than usual on Kurdish row; Exports down each month since reaching April's record rate

July 19, 2012 12:00 by Reuters

Iraq’s oil exports are set to fall for a third month in July to below 2.4 million barrels per day (bpd), according to shipping data and industry sources, a setback to hopes Iraqi supply will compensate for lower output from sanctions-bound Iran.

Exports from Iraq’s south have averaged 2.07 million bpd in the first 18 days of July, less than last month, according to shipping data, while northern Kirkuk crude shipments have also dropped, say shipping agents and an Iraqi official.

“We do not have enough availability for exports,” a senior Iraqi oil official said of Kirkuk shipments. “Kirkuk exports for July are running between 300,000 bpd to 350,000 bpd and are likely to remain at that level next month.”

Without a recovery in the rest of July, that would mean Iraq’s exports have fallen for a third month from April’s post-war record of 2.5 million bpd. Rising Iraqi supplies earlier this year had helped to keep a lid on oil prices as Western sanctions targeted Iran’s exports.

Southern exports have declined so far in July from as much as 2.14 million bpd in June as poor weather hampered shipments in the early part of the month. A rise in southern exports as new Gulf terminals came into operation had led to the jump in April’s exports.

Iraq’s northern shipments have declined from above 400,000 bpd earlier this year. This is partly a result of Iraq’s Kurdistan region announcing in April it was halting its exports because firms operating there were not getting paid by the central government.

While the senior Iraqi official said Kirkuk exports are running at between 300,000 bpd and 350,000 bpd, shipping data points to even lower supplies.

According to shipping sources and traders, only about 260,000 bpd of Kirkuk has been exported from the port of Ceyhan and by pipeline so far in July, down from a loading programme scheduling almost 400,000 bpd.

Due to reduced supplies there are loading delays of 10 to 15 days and some customers have cancelled August Kirkuk cargoes, the Iraqi official sources said.

Nonetheless, he said Iraq was aiming for overall exports of 2.4 million bpd to 2.5 million bpd this month and next by pushing up southern shipments. The Halfaya oilfield, operated by China National Petroleum Corp., is now pumping at least 80,000 bpd, helping to boost flows.

In addition to seabourne crude, Iraq exports small amounts of crude via truck to Jordan, estimated at 10,000 bpd. Turkey said earlier this month it had begun importing 5 to 10 road tankers of crude from northern Iraq daily.

(Editing by James Jukwey)