Monday, September 21, 2020

Iraq's Southern Exports Lower after OPEC Cut

Posted by February 16, 2017

Oil exports from Iraq's southern terminals have edged lower so far in February, according to loading data and an industry source, a sign that OPEC's second-largest producer is keeping a lid on shipments following a commitment to cut output.

During negotiations on the supply cut by OPEC and non-OPEC producers, Iraq had sought an exemption - leading to scepticism that the country would comply with the accord. The deal stipulates that Iraq cut output by 210,000 barrels per day.

Exports from southern Iraq - the outlet for most of the country's crude - in the first 15 days of February averaged 3.24 million bpd, according to shipping data tracked by Reuters and by an industry source.

That would be a slight decline from January, when southern exports fell to 3.28 million bpd, two oil executives told Reuters. Iraq said southern shipments were 3.51 million bpd in December, a record high.

The OPEC cut started on Jan. 1. Although it is only mid-February, the export level lends support to comments from Iraqi officials that Baghdad is lowering output.

Iraq's oil minister, Jabar al-Luaibi, told Reuters in London last month that he was "very happy" with the progress of the output-cutting agreement, and stressed that Baghdad was complying.

Initial signs are that OPEC in January achieved a record rate of more than 90 percent compliance with the accord.

Although Iraq cut output by 200,000 bpd in January, it has yet to reach the agreement's target level, putting its compliance below that of other members such as top exporter Saudi Arabia.

It is not possible to draw firm conclusions about production from a few weeks of export data, not least because the deal by the Organization of the Petroleum Exporting Countries and other independent producers applies to output, not exports.

Iraq's exports can be volatile day-to-day, affected by bad weather and technical snags among other factors.

The bulk of Iraq's oil is exported via the southern terminals. Smaller amounts are shipped from northern Iraq via Ceyhan in Turkey.

Northern exports have averaged about 600,000 bpd so far in February, data shows, down from well above 600,000 bpd in January. The Kurdistan Regional Government said November exports were 540,000 bpd and has yet to give any 2017 figures.
By Alex Lawler

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