Iraq's March Oil Exports to Drop as Violence Hits Flow

Source: Reuters 3/25/2014, Location: Middle East

Oil exports from Iraq's southern terminals have held within sight of a 35-year high so far in March, according to loading data, reflecting Iraq's efforts to expand capacity and deliver supply growth in 2014.

But, keeping a question mark over the sustainability of Iraq's oil revival, shipments of Kirkuk crude from northern Iraq have plunged due to sabotage, industry sources said, meaning total Iraqi exports will drop from last month's record rate.

Exports from Iraq's southern terminals have averaged 2.47 million barrels per day (bpd) in the first 25 days of March, according to shipping data tracked by Reuters. An industry source, who also monitors the exports, had a similar estimate and said shipping delays have reduced.

"So far, it has been around 2.5 million barrels per day and delays are only a few days," the source said. That would be on a par with February's southern exports of 2.50 million bpd, the highest since 1979.

Iraq has expanded capacity at the southern ports, which typically handle almost all of Iraq's oil exports. From the north, Iraq also exports crude from its Kirkuk fields to Ceyhan in Turkey.

The northern pipeline suffers frequent interruptions to oil flow and was attacked 54 times by insurgents last year, keeping Kirkuk shipments far below their potential.

Sabotage suspended flows along the pipeline at the start of March and escalating violence has prevented technicians from fixing damage, sources from Iraq's North Oil Company (NOC) said last week.

As a result, oil industry sources said just one tanker and one pipeline shipment of Kirkuk have been exported in March, equal to a daily rate of less than 30,000 bpd, down from 300,000 bpd in February.

That would bring Iraqi exports to just over 2.5 million bpd in March, down from February's 2.80 million bpd which Deputy Prime Minister for Energy Hussain al-Shahristani described as a record rate.

Northern exports could increase if the autonomous region of Kurdistan starts to sell oil via a pipeline to Turkey. A long-running dispute between Baghdad and the KRG remains unresolved.

Still, Kurdistan has agreed to export 100,000 bpd via the Iraqi pipeline network from April 1 as a "gesture of goodwill" while negotiations with Baghdad are ongoing.


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