Iraq’s oil exports hit record high so far in June

Exports from Iraq’s southern terminals have averaged 3.00 million barrels per day (bpd) in the first 15 days of June

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Iraq’s oil exports have averaged 3.20 million barrels per day (bpd) so far in June, according to loading data and an industry source, setting shipments from OPEC’s second-largest producer on course for a record high.

Another boost from Iraq underlines the focus of major members of the Organization of the Petroleum Exporting Countries in keeping market share, not restraining supply to support prices. OPEC met on June 5 and kept its policy unchanged.

Exports from Iraq’s southern terminals have averaged 3.00 million barrels per day (bpd) in the first 15 days of June, according to shipping data seen by Reuters and an industry source, up from 2.69 million bpd in all of May.

Shipments have jumped after Iraq’s decision to split the crude stream into two grades, Basra Heavy and Basra Light, to resolve quality issues. Some companies working at Iraqi oilfields have increased production following the move.

“Today after the introduction of Basra Heavy exports, curtailment of our production no longer exists,” Gati al-Jebouri, senior vice president from Lukoil Overseas, told a London Iraq oil conference on June 9. Lukoil operates the West Qurna II field in Iraq.

The southern fields produce most of Iraq’s oil. Located far from the parts of the country controlled by Islamic State, they have kept pumping despite the conflict.

But exports from Iraq’s north via Ceyhan in Turkey, comprising Iraq’s Kirkuk crude and Kurdish oil, have averaged 200,000 bpd so far in June, according to loading data, less than half of May’s 451,000 bpd.

Northern exports were offline for most of 2014 and resumed in December following a deal between Baghdad and the Kurdistan Regional Government, which has since shown some signs of strain.

Kurdistan stopped sending oil for a few days in early June, but the two sides blamed technical difficulties for the delays and say they remain committed to the deal.

The June exports are in line with figures given on June 9 by Falah Alamri, the head of Iraq’s State Oil Marketing Organisation (SOMO), at the London conference. Iraq said its exports in May were a record 3.15 million bpd.

Iraq is targeting a further increase in exports in 2015 to 3.3 million bpd, a level Iraqi officials say is within reach. Risks include bad weather, technical problems and unrest, which can disrupt flows.

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