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The Fed Is Driving Down Oil Prices

The Fed Is Driving Down Oil Prices

The hawkish U.S. Federal Reserve…

South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop

Oil

Between November 1 and 20, Iraq’s crude oil exports from the south averaged 3.5 million bpd, up by 150,000 bpd from October and close to record highs, as Baghdad tries to offset the drop in exports from the northern route from Kirkuk to Ceyhan after Iraqi forces reclaimed control of Kirkuk oil fields from Kurdish forces in mid-October.

According to shipping data tracked by Reuters and to an industry source tracking, the southern Iraqi exports so far this month have been just below the 3.51 million bpd record of December last year, when Iraq exported the highest volume out of the south before the OPEC production cuts kicked in from January this year.

“It seems they managed to get there,” the industry source told Reuters, referring to Iraq’s ability to boost oil exports from the south to compensate for lost shipments in the north.

Still, so far this month, the loss from the northern route has not been fully offset by the southern exports. Shipping data tracked by Reuters and its industry source showed that exports from the north have so far averaged 250,000 bpd in November, down from 450,000 bpd in October and from more than 500,000 bpd before the independence referendum in Kurdistan at the end of September. 

Related: Can Oil Majors Continue To Beat Estimates?

Following the referendum which Baghdad did not recognize, Iraq’s government forces completed in mid-October an operation to seize control of all oil fields that Iraqi state-held North Oil Company operates in the oil-rich Kirkuk region from Kurdish forces. A day later, disruptions in oil flows started, with reports that the flow of crude oil from Kirkuk to Ceyhan had plummeted to some 225,000 bpd, from around 500,000 bpd the previous day. In the second half of October, frequent reports out of the region put disruptions at 250,000 bpd of oil off the market.

Exports from Ceyhan averaged 540,000 bpd in the first nine months this year, but loadings of Kirkuk crude dropped to 430,000 bpd in October, and are lower once again in November, according to ClipperData. So far in November, Basrah Light exports from the south are at their highest pace since September 2016, lifting total southern Iraqi exports so far this month to the highest since March, ClipperData tracking shows.

By Tsvetana Paraskova for Oilprice.com

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