Iraq Crude Exports From South Nearing Record High

Crude oil exports from southern Iraq are close to a record high so far in September, averaging 3.6 million barrels per day as of Thursday, according to sources who had tracked shipping data to come up with the number.

If the rate stays unchanged or rises, it will beat Iraq’s previous record of 3.58 million bpd hit last month.

It is safe to say that Iraq, OPEC’s second-largest producer, was only too happy to boost oil production after the organization's June 22 meeting when members decided to start reversing their production cuts agreed in late 2016, Oil Price reported.

Iraq never really managed to reduce production to its assigned quota anyway and it was vocal against the quotas because of its heavy dependence on oil revenues, as its economy is still in ruins after the war with the terrorist group Islamic State.

What is more, the export rate data suggest that civil unrest, which has been rife since the summer, has not affected oil production. Indeed, any intentions on the part of protesters to try and cause production outages at oilfields have been quickly thwarted.

Besides the export growth, Iraq is also understandably eager to increase its oil production. However, according to at least one analyst, this will be difficult to achieve.

According to IHS Markit’s Christopher Elsner, as cited earlier this week by Arab News, Iraq faces serious challenges in its quest for boosting its production, ranging from the current political and economic problems to lack of funds to develop new production capacity.

“There is a lot of investment in getting wells out of the ground. And there is a lot of investment in exporting that oil. But the connections between the oilfields and the storage farms in the south and the export points have been what has really led to the bottlenecks in Iraq,” Elsner explained.