BAGHDAD: Oil exports from southern Iraq so far in May have fallen by more than 200,000 barrels per day (bpd) from the previous month’s near-record, adding to supply losses caused by unusually high global outages. The drop, if prolonged, could add to concern about the sustainability of export growth from Iraq, where oil firms have warned the government that projects to boost output will be delayed if Baghdad cuts spending this year.
Iraq’s southern exports in the first 23 days of May averaged 3.15 million barrels per day (bpd), according to an industry source and loading data tracked by Reuters. April’s 3.36 million bpd was close to the record reached in November. “It’s because of power outages,” said the industry source, who declined to be identified. Iraqi oil officials could not immediately be reached for comment. The south pumps most of Iraq’s oil. Iraq also exports smaller amounts of crude from the north by pipeline to Turkey.
Northern shipments of crude from fields in the semi-autonomous Kurdistan region have fallen to 430,000 bpd so far in May, according to loading data, from 512,000 bpd in April. The shipments were running at 600,000 bpd at the start of the year but have slowed due to pipeline sabotage and a decision by the central government in Baghdad to suspend pumping Kirkuk crude into the line. The decline in Iraq’s exports arises as unplanned supply outages have risen this month to the highest in at least five years because of wildfires in Canada and losses in Nigeria, Libya and Venezuela.
Iraq was the fastest source of supply growth in the Organization of the Petroleum Exporting Countries last year and boosted production by more than 500,000 bpd, surprising industry observers, despite spending cuts by companies working at the southern fields and conflict with Islamic State militants. Iraqi officials expect further growth in the country’s exports this year, but at a slower rate than 2015. Officials are expected to provide an update on output and export plans at a conference in London this week.
