16 October 2013, London – Iraq could soon be back on track to return as a top table oil exporter as infrastructure work, that cut loadings and helped boost the oil price, progresses, shipping data and industry sources showed.
The maintenance and expansion work is partly designed to increase export capacity and help Iraq maintain its position as the second-largest oil producer in the Organization of the Petroleum Exporting Countries.
Along with disruptions in other producers such as Libya, it tightened the market and helped support oil prices near $110 a barrel. Exports from Iraq’s southern terminals have averaged 1.67 million bpd in the first 16 days of October, according to shipping data tracked by Reuters.
That is down from September’s rate of 1.82 million bpd and 2.31 million bpd in August. The loading rate is expected to increase in the rest of October. Two of the berths at the Basra Oil Terminal, which were closed in the early stages of the work, have begun to receive tankers again, according to a shipping source.
“The average in October should be around 2 million barrels per day if exports in the second half of the month are back to normal,” said a source with a buyer of Iraqi crude. “We shall see.”
A source with a second buyer of Iraqi crude also expected to see a rebound in the rest of the month, with exports averaging 2.0 to 2.1 million bpd during October.
That would be largely in line with Iraq’s plan for the constraint on exports to last for about a month from the middle of September to the middle of October – although some in the industry, such as the International Energy Agency, have pointed to the potential for the reduction to persist as work continues.
Iraq exports the bulk of its oil from its southern ports. Shipments of Kirkuk crude from northern Iraq remain far below their potential, constrained by bomb attacks on the pipeline to Turkey and a dispute with the Kurdistan Regional Government over oil and land rights.
In September, Kirkuk shipments averaged about 250,000 bpd and buyers of the crude expect October’s rate to be around the same, which would bring total exports to 2.25 million bpd or more.
Iraq’s oil revival, which got under way in 2010, has slowed this year due to infrastructure and security problems, keeping output below 3 million bpd in July, although supply is expected to start rising again later in the year.