Thursday, March 5, 2015

Iraq’s Oil Exports & Revenues Slightly Up In February 2015, But Still Not Enough


Iraq’s oil exports and earnings saw a slight increase from January to February 2015. The Kurdish contribution increased during last month, which was good news given all the wrangling between Irbil and Baghdad. The bad news was exports via the south continued to be plagued by bad weather. More importantly, the country was not coming close to the amounts set out in its 2015 budget.

Iraq’s exports went up roughly 60,000 barrels a day last month. From January to February the country went from an average of 2.535 million barrels a day to 2.597 million. The former was actually a revised figure as initially it was said Iraq exported 2.35 million barrels in January. The increase was due to the Kurdistan Regional Government (KRG) sending more oil to Turkey for the Oil Ministry. In January it exported an average of 145,000 barrels a day for Baghdad going up to 304,000 barrels in February. That was still below its quota of 550,000 barrels set in the 2015 budget, but Oil Minister Adel Abdul Mahdi praised it as progress. Under the agreement between the two sides, Kurdistan is to provide 250,000 barrels a day from Kurdish fields and 300,000 barrels a day from Kirkuk ones it occupied after the insurgent summer offensive. Iraq Oil Report said that February’s shipments included oil from both. KRG Natural Resource Minister Ashti Hawrami said that the Kurds would increase their exports in coming months so that by the end of the year it was meeting its quota.

While that problem was being worked out the southern ports continued to be effected by bad weather for a second month. Poor weather creates rough seas that hinder tankers from docking at Basra’s ports and mooring stations. That caused exports from the south to dip from 2.76 million barrels in December to 2.39 million in January and 2.293 million in February. In January Iraq also suffered from some buyers refusing shipments. That month the Oil Ministry began including oil from the Halfaya field in Maysan directly to the ports without mixing them beforehand with output from other fields to achieve the proper levels.

In February Iraq’s crude went for $47.43 per barrel. That was up from January’s $41.45. Likewise revenues went from $3.258 billion to $3.449 billion between the two months. This was down 49% from the country’s 2014 average of $7 billion a month and showed the financial straights it will be in throughout the year as it is almost completely dependent upon petroleum.

Iraq Oil Exports And Profits 2011-2014
Month
Avg.
Exports
(Mil/
Bar/
Day)
Avg. Price Per Barrel
Revenue (Bill)
Jan. 11
2.16
$90.78
$6.082
Feb.
2.20
$98.44
$6.064
Mar.
2.15
$107.13
$7.167
Apr.
2.14
$114.26
$7.342
May
2.22
$108
$7.47
Jun.
2.27
$105.17
$7.173
Jul.
2.16
$108.79
$7.311
Aug.
2.18
$104.91
$7.124
Sep.
2.10
$104.89
$6.619
Oct.
2.08
$104.04
$6.742
Nov.
2.13
$106.59
$6.833
Dec.
2.14
$106.18
$7.061
2011 Avg.
2.16
$105.00
$6.913
Jan. 12
2.10
$109.08
$7.123
Feb.
2.01
$112.92
$6.595
Mar.
2.31
$117.99
$8.472
Apr.
2.50
$116.79
$8.795
May
2.45
$103.03
$8
Jun.
2.40
$90.09
$6.453
Jul.
2.51
$97.14
$7.577
Aug.
2.56
$106.22
$8.445
Sep.
2.59
$107.59
$8.371
Oct.
2.62
$105.51
$8.578
Nov.
2.62
$104.32
$8.200
Dec.
2.34
$103.72
$7.551
2012
Avg.
2.41
$106.20
$7.846
Jan. 13
2.35
$104.92
$7.672
Feb.
2.53
$107.66
$7.644
Mar.
2.41
$103.76
$7.772
Apr.
2.62
$98.70
$7.764
May
2.48
$97.23
$7.477
Jun.
2.32
$97.40
$6.799
Jul.
2.32
$101.00
$7.272
Aug.
2.57
$104.45
$8.356
Sep.
2.07
$104.87
$6.511
Oct.
2.25
$102.57
$7.160
Nov.
2.381
$102.57
$7.324
Dec.
2.341
$102.89
$7.470
2013 Avg.
2.386
$102.33
$7.435
Jan. 14
2.228
$102.37
$7.074
Feb
2.799
$102.05
$8.001
Mar
2.396
$101.03
$7.507
Apr
2.509
$100.69
$7.582
May
2.582
$100.69
$8.077
Jun
2.423
$102.96
$7.470
Jul
2.442
$102.27
$7.742
Aug
2.375
$97.44
$7.172
Sep
2.542
$90.76
$6.916
Oct
2.432
$81.12
$6.120
Nov
2.51
$70.40
$5.25
Dec
2.941
$56.59
$5.161
2014 Avg.
2.51
$92.39
$7.013
Jan
2.535
$41.45
$3.258
Feb
2.597
$47.43
$3.449


While the small increase in exports was good news, and the fact that the Kurds were shipping more was even better Iraq is still not coming anywhere close to its marks set in the 2015 budget. That document calls for 3.3 million barrels a day in exports at $56 per barrel. Even if it did meet those figures it is expected to run into a $21.3 billion deficit that will be difficult to cover. In December 2014 Iraq reached 2.941 million barrels. Roughly 180,000 of that was from the KRG. That means if the Kurds met their full quota Iraq has the potential to reach 3.3 million. The problem as ever is that exports are never steady for a number of reasons whether that be due to the weather or maintenance work or political disputes. Not only that there is no telling when Iraqi crude will reach the $56 barrel price. All that means the country will be facing an even more dire economic situation then it was already planning for with far reaching consequences as it owes money to oil companies, needs to pay for a huge public sector, and is in the middle of a very costly war. 

SOURCES

Iraq Oil Report, “With compromise budget, Iraq buys some time,” 1/30/15

Lando, Ben, “Exports, revenues increase in February,” Iraq Oil Report, 3/3/15

Reuters, “Iraq oil exports rise to 2.597 mln bpd in February,” 3/1/15

Van Heuvelen, Ben, Lando, Ben, Iraq, Ali Abu, al-Sai’di, Jewdat, “Oil exports fall in January,” Iraq Oil Report, 2/3/15