Iraq will reduce crude oil exports from its southern terminals in July, mainly its Basra Light flows, in order to comply with OPEC+ cuts after failing to meet its agreed quota in previous months, loading schedules from a shipping agent showed.
Planned exports of Basra Light and Heavy crude oil will be around 1.53 million barrels per day (bpd) in July, down from the 3.1 million bpd originally planned in June.
Basra Light exports will fall to around 817,000 bpd in July from 2.24 million bpd in June while Basra Heavy will fall to around 710,000 bpd from 833,000 bpd.
Final exports for July could be higher, traders said, including due to a spillover of June cargoes.
OPEC, Russia and allies agreed on June 6 to extend record oil production cuts until the end of July, prolonging a deal that has helped crude prices to double in the past two months by withdrawing almost 10 percent of global supplies from the market.
Under the OPEC+ deal, Iraq is obliged to compensate for their over-production in May and June in later months.
New oil storage hub in UAE to open by end of 2020
Iraq’s oil ministry said on Wednesday that its June exports were 2.8 million bpd, of which 2.7 million bpd were from its southern terminals.
“Asia is taking more or less everything it seems,” a trading source said. “No wonder Urals is at plus $2.”
The price of Russian medium sour Urals hit an all-time high this week at dated Brent plus $2.35 a barrel out of the Baltic ports. A steep cut in Russian exports coupled with a tighter sour market generally due to OPEC cuts, including lower Basra Light, has buoyed the grade.