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Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

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Iraq’s Crude Oil Exports Stay Flat As Kurdistan Saga Continues

  • Iraq exported an average of 3.3 million barrels per day of oil in May, bringing in $7.3 billion in revenue.
  • The country is only exporting through its southern oil export terminals as exports from Kurdistan remain shut in.
  • Fears of a recession and China’s slower-than-expected economic recovery have lowered demand for further exports.
oil exports

Iraq, OPEC’s second-largest oil producer, exported on average 3.3 million barrels per day (bpd) of oil in May, flat compared to April, according to the Iraqi oil ministry.

Iraq’s revenues from oil stood at $7.3 billion last month, as sales were made at an average of $71.30 per barrel, the ministry said in a statement carried by Reuters.

Iraq is currently exporting oil only via its southern oil export terminals, with around 450,000 bpd of exports from the northern fields and from the semi-autonomous region of Kurdistan still shut in due to a dispute over who should authorize the Kurdish exports.

Amid fears of a recession and concerns about slower-than-expected Chinese recovery, the oil market hasn’t particularly missed Kurdistan’s exports. Oil prices registered monthly losses in both April and May. Oil actually had the seventh consecutive month of monthly losses in May.

Kurdistan’s exports—shut-in since March 25—have yet to resume. Earlier this week, reports emerged that a flare-up between the regional government in Kurdistan and the federal Iraqi government in Baghdad added risk for the resumption of oil flows from the northern Iraqi region.

Rudaw reports that the spike in tension followed amendments in relation to Kurdistan that the Iraq government had made to the federal budget last week. The Kurdish government slammed the changes as unconstitutional.

Kurdistan’s crude oil exports—around 400,000 bpd shipped through an Iraqi-Turkey pipeline to Ceyhan and then on tankers to the international markets—were halted on March 25 by the federal government of Iraq.

The suspension of oil flows out of northern Iraq and Kurdistan via Ceyhan forced companies to either curtail or suspend production because of limited capacity at storage tanks.

Iraq is now waiting for a final go-ahead from Turkey, but the recent Baghdad-Kurdistan flare-up could delay the approval of the budget and may destroy the delicate balance that Baghdad and Erbil achieved in the wake of the oil export halt from Kurdistan.

By Charles Kennedy for Oilprice.com

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  • Mamdouh Salameh on June 01 2023 said:
    Iraqi crude oil exports at 3.3 million barrels a day (mbd) in May were far below Iraq’s export capacity by at least 450,000 barrels a day (b/d) normally exported from the northern fields via the Iraqi-Turkish oil pipeline (ITP) to Ceyhan and then on tankers to the international markets.

    The reason is due to a dispute between the Federal government of Iraq and the regional Kurdistan government (RKG) over who should authorize the Kurdish exports.

    The global oil market hasn’t indeed missed Iraq’s northern exports via Iraqi Kurdistan but not because of alleged fears of recession and concerns about Chinese economy as the author suggested.

    Shifting the blame for recent oil price losses on China and recession is self-delusional and futile particularly when the Chinese economy is projected to grow in 2023 by 5.2%-6.5% compared with 1.6% for the United States’.

    The one reason for the decline of prices over the last two months is persistent fears of a global banking or financial crisis triggered by a shaky US banking system and also fears of default by the United States over lack of agreement between the Biden administration and Congress in lifting US borrowing ceiling.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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