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WTI Tops $60 On Gulf Of Mexico Shut-Ins

WTI Tops $60 On Gulf Of Mexico Shut-Ins

Oil prices ended the week…

Iraq Exporting More Oil Now Than Before Production Cut Agreement

Shipping

Iraq exported the most crude oil in May over the last six months, shipping data from Bloomberg has revealed. That’s despite the OPEC production cut agreed to in November 2016 and extended last week. By the time the extension was announced, OPEC’s number-two was still suspected of not having hit its target of 210,000 bpd less in production.

However, as Iraq’s Oil Minister Jabbar al-Luaibi told media at the OPEC meeting in Vienna that oil exports from the semi-autonomous region of Kurdistan were not subject to the extension of OPEC’s production cuts. Kurdistan exports around 600,000 bpd, most via the Kirkuk-Ceyhan pipeline.

The daily export rate for Iraqi oil last month averaged 3.93 million barrels—higher than the rate for October—the month that was taken as basis for the new production quotas for OPEC members and their partners in the cut deal.

While Iraq has been struggling with keeping its end of the deal, it has also been expanding its export capacity. In February, state-owned South Oil Company said it would halt operations at the country’s largest terminal, in Basra, to install a new feed-in pipeline. The Basra terminal has a loading capacity of 1.8 million bpd. In January, the South Oil Company also announced an expansion of another oil export terminal, Khor al-Amaya, to bring its daily capacity to 1.2 million barrels.

Related: Russia’s Economy Minister: Russia Can Live Forever At $40 Oil

When the initial production cut deal was inked, Iraq was widely considered to be the first among OPEC members to cheat. It has been very slow to reduce its production, unsurprising given its long-suffering economy that relies on oil revenues to fight what remains of IS and keep the country going in the absence of any viable revenue source alternatives.

According to OPEC’s latest Monthly Oil Market Report Iraq pumped 4.37 million barrels of crude daily in April, down from 4.41 million bpd a month earlier. The April figure, however, is close to the average for 2016, which stood at 4.39 million barrels daily.

By Irina Slav for Oilprice.com

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