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Iraq Boosting Crude Exports at Fastest Pace

Shipments in the first two weeks of the month were 4.05 million bpd, the highest since November 2016.Shipments in the first two weeks of the month were 4.05 million bpd, the highest since November 2016.

Iraq exported oil at the fastest pace since late 2016 during the first half of July, indicating OPEC’s second-largest producer is pumping more after the group eased production limits.

Crude shipments during the first two weeks of the month were 4.05 million bpd, the highest since November 2016, according to tanker tracking and port agent data compiled by Bloomberg.

That is 6% higher than the daily average of exports for all of June. Preliminary tanker tracking data are subject to change because shipments can be delayed and the average for a full month can be higher or lower. The Organization of Petroleum Exporting Countries and allied producers agreed last month to ease production cuts to ensure sufficient supply to markets, starting in July.

Saudi Arabia, the world’s largest exporter, and Russia said OPEC and partners would increase output by about 1 million bpd. They had been curtailing output since the start of 2017 to help curb a global glut.

Brent crude recovered from below $30 per barrel in 2016 to $80.50 per barrel in May this year. Iraq sold 3.84 million bpd of crude on average in June and pumped 4.5 million bpd that month, according to data compiled by Bloomberg. That would indicate domestic refinery demand of about 650,000 bpd.

If Iraq maintains exports at the same level for all of July and domestic crude use remains consistent with June, the country would pump about 4.7 million bpd in July. That would be the highest monthly production ever, according to data compiled by Bloomberg.

Iraqi Oil Ministry Spokesman Asim Jihad said the country was committed to the output limit set by OPEC when asked about the country’s production level. Iraq’s output was capped at 4.35 million bpd under the 2016 deal.

While the country has exceeded that level every month since the start of the OPEC deal, Bloomberg data show, the group’s decision to raise output has called the country-level quotas into question because some members are unable to pump as much as they agreed.

"Iraq’s production is probably closer to 4.8 million bpd currently," said Jaafar Altaie, managing director of consultant Manaar Group in Abu Dhabi.

 

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