Iraq Crude Export Highest in 35 Years

Iraq Crude Export Highest in 35 YearsIraq Crude Export Highest in 35 Years

Iraq boosted crude shipments in March to the highest level in more than three decades, adding to a global supply glut that has helped push down oil prices by 46 percent in the last year.

OPEC’s second-largest producer shipped 92.4 million barrels in March, or 2.98 million barrels a day, Iraqi Oil Ministry spokesman Asim Jihad was quoted by Bloomberg as saying. Iraqi exports gained 15 percent from February, when foul weather at the country’s southern oil terminals limited shipments to 2.59 million barrels a day, according to the oil ministry.

Iraq’s monthly shipments rebounded amid an oversupply fed partly by the US shale boom and increased output from Russia. US crude inventories expanded in the week ended March 27 to the most since at least August 1982, the Energy Information Administration (EIA) reported Wednesday. West Texas Intermediate crude is down almost 7 percent this year. North Sea Brent has lost 51 percent from its 12-month peak and was trading at $56.73 a barrel at 7:21 a.m. Thursday in London. Iraq pumped 3.3 million barrels a day on average last year, the most since 1979, according to data compiled by Bloomberg. Among the 12 members of the Organization of Petroleum Exporting Countries (OPEC), only Saudi Arabia produces more. Iraq is targeting output of 6 million barrels a day in 2018.

The Middle Eastern nation’s shipments in March grew even as the $4.46 billion in oil revenue it generated last month was barely half of the $8.08 billion it earned in May, the peak for monthly sales in 2014. Iraq sold crude at an average price of $48.24 in March, according to Jihad.

The country shipped 84.08 million barrels last month from the southern Basra region and 8.3 million barrels from the northern oil hub of Kirkuk, Jihad said. While the Basra area has been largely unaffected by Iraq’s conflict with Islamic State militants, troops from Iraq’s self-governing Kurdish region took control of oil fields around Kirkuk to prevent their capture by the militants.

OPEC oil supply has jumped in March to its highest since October as Iraq's exports rebounded and Saudi Arabia pumped at close to record rates. OPEC supply rose in March to 30.63 million bpd from a revised 30.07 million bpd in February. If the total remains unrevised at 30.63 million bpd, March's supply would be OPEC's highest since 30.64 million bpd in October 2014, based on Reuters surveys.

In addition, Saudi Arabia increased output to within a whisker of 10 million bpd on average in March, due to higher demand from export customers and an increased local requirement in new oil refineries. Of countries with lower output in March, the biggest decline was in Angola, partly due to a force majeure on exports on BP's Saturno crude stream. OPEC's other West African producer Nigeria also exported fewer cargoes in March.