Covid Impact: has had to react to many challenges(government restrictions, border closings, flight cancellations etc…) All orders are shipped in the order in which they are approved. Approved Redemptions are always processed within 24 hours. We appreciate your business and we are working diligently to get back to normal as quickly as possible. Please be safe.

Currency News

Iraq aiming to boost oil exports

Iraq is set to boost its oil export capacity significantly by the end of the first quarter next year, stepping up competition with the leading exporter Saudi Arabia to grab a bigger share of the growing Asian market.

Iraq is wooing Asian customers by offering easier payment terms to secure buyers as it ramps up oil output after years of war, but inadequate infrastructure and security issues this year have hampered efforts to maintain steady output and exports.

The country is planning to raise its total export capacity to 4 million barrels per day (bpd), the deputy prime minister for energy Hussain Al Shahristani said yesterday.

“In total, we will be having capacity of 4 million barrels (per day) next year,” he said on the sidelines of the World Energy Congress in South Korea. “By the end of the first quarter we should have them.”

Iraq’s current oil output is now back up to 3.3 million bpd of crude, and may touch 3.5 million bpd by year-end. Iraq is exporting 2.5 million bpd of its output, with 60 per cent going to Asia, 20 per cent to the American market and the rest to Europe, he said.

Output at Iraq’s giant Majnoon oilfield, run by Royal Dutch Shell, will reach 175,000 barrels a day by the end of this month, said Mr Al Shahristani.

Iraq’s total storage capacity has been recently raised to more than 7 million barrels, Mr Al Shahristani added.

Iraq’s terminal upgrading activity this year and other work to improve its export capacity have sharply reduced its exports in some months this year.

Exports fell to 2 million bpd in September, the lowest rate in 19 months, as the terminal repair and expansion work reduced shipments of Basra Light crude, which accounts for most of Baghdad’s export revenue.

Opec, which pumps more than a third of the world’s oil, meets on December 4 in Vienna to decide whether to adjust its output target.

Opec again lowered the forecast demand for its crude in the fourth quarter and 2014 in a monthly report last week, saying its production remained higher than next year’s demand for its oil despite a plunge in Iraqi and Libyan output.

If the United States and the European Union begin to ease their sanctions on Iran as talks progress over Tehran’s disputed nuclear programme, it is the Opec members, excluding Iraq, that will have to make way for increased output and exports of Iranian crude, Mr Al Shahristani said.

Iraq is highly dependent on high oil prices to sustain its US$117 billion budget, its highest on record, compared with $16.1bn in 2005. The bulk of the funds is deployed to pay salaries of public servants and subsidies. Despite a government-led move to diversify the economy, a lack of critical oversight and widespread corruption have been major impediments towards the success of these infrastructure projects and growth of the private sector.

While documents from the Iraqi government detailing mismanagement are unavailable, a final audit released by the Special Inspector General for Iraq Reconstruction revealed that the US had wasted at least US$8bn as a result of contract abuse and mismanagement from 2003 to 2012.

“The oil production plateaus have been reviewed since Iraq signed the bid rounds, and are now set for 3.78 million bpd by end of 2013 and 4.3 million bpd by the end of 2014,” said Luay Al Khateeb, executive director of the Iraq Energy Institute and London and an adviser to the parliament of Iraq.

“Over the next 15 months, Iraq is set to increase at least 1.3 million bpd over and above current production levels. Although a challenging milestone but not impossible to achieve.

“Based on the current political climate between Tehran and Washington, the tension over the Strait of Hormuz has become less hazardous than before. However, Iraq must not reply via the southern corridor, and should invest in diversifying its export outlets via Turkey and Jordan before the next conflict takes place in the region.”

Iraq also expects to sharply increase the amount of oil it sells to China next year, building its market share for this year even further, Falah Al Amiri, the director general of Iraq’s State Oil Marketing Organization, said yesterday.

“At the moment, China takes nearly 600,000 barrels per day but next year probably they will get 800,000 or 850,000 barrels a day,” said Mr Al Amiri.

Iraq overtook Iran this year to become China’s fifth-largest oil supplier.

original source:

Back to Top