Energy
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Iraq Crude Exports Steady

Iraq Crude Exports SteadyIraq Crude Exports Steady

Oil exports from Iraq's southern ports have averaged 3.162 million barrels per day so far this month, down slightly from May due to maintenance work and rising demand for fuel oil used in power generation, a senior oil official said.

"The exports, including 850,000 barrels of Basra Heavy, are expected to hold steady through the end of the year," Hayan Abdulghani Abdulzahra, the head of state-owned South Oil Company, told Reuters in an interview late on Sunday.

"With the start of summer, demand for crude oil from power stations and refineries has increased to around 550,000 barrels per day, and this comes at the expense of exports," he said.

The official noted that power stations and refineries had been using 400,000 bpd before high temperatures boosted electricity consumption.

"OPEC's second-largest producer aims to increase its southern oil storage capacity to 14 million bpd by the first quarter of 2018, from 11.5 million currently, to help cope with export bottlenecks caused by bad weather and to absorb an expected rise in output," he said.

Abdulzahra said the country plans to bring a fourth single point mooring facility on stream by mid-2017 to boost export capacity from southern terminals to 4.5 million bpd from 3.6 million currently.

Iraq last year was OPEC's fastest source of supply growth, boosting output by more than 500,000 barrels per day, despite spending cuts and conflict with the self-styled Islamic State terrorists.

A collapse in Brent crude prices, which at $47 a barrel are less than half their level of two years ago, has hit revenue for the government, which relies on oil for nearly all its income.

The price drop has raised concern that Iraq's oil output growth could slow, or stall. Indeed, oil companies have warned Iraq that projects will be delayed if the government insists on drastic spending cuts this year.

Financialtribune.com