Iraq’s oil revenues rise again on the back of sustained high oil prices and new export capacity
Iraq’s revenues from crude oil exports dipped in December, but total earnings over the year hit a new record high of $94bn, up more than $11bn or 13 per cent from the $83bn earned in 2011.
A total of 72.8 million barrels were exported in December at 2.35 million barrels a day (b/d), bringing in revenues of $7.55bn, based on an average oil price of $103.72 a barrel, according to the latest data released by the Oil Ministry.
Iraq’s oil production has risen to almost 3.2 million b/d, its highest level in two decades, and promoting the country’s status to Opec’s second largest producer.
Total crude oil exports in 2012 averaged 2.46 million b/d, up 13.4 per cent compared to the average of 2.17 million b/d recorded in 2011. Oil prices reached a peak of $117.99 a barrel in March and low of $90.10 in June, averaging $106.2 a barrel. This is just $1 more than in 2011, but well above the $85 a barrel threshold price set in Iraq’s 2012 budget. The budget assumed exports of 2.625 million b/d however, which Iraq fell short of.
In November, Iraq’s cabinet set a budget of $118.4bn for 2013, based on an average oil export price of $90 a barrel and exports of 2.9 million b/d. The budget is still to be approved by parliament.
Exports through Iraq’s Basra Oil Terminal and the newly opened single point mooring (SPM) in the Gulf totalled 747.1 million barrels at an average of 2.04 million b/d. Exports rose from just 1.71 million b/d in January to a peak of 2.25 million b/d in August. This slid back to just over 2 million b/d in December as loading was affected by bad weather in the area.
Northern exports through the Iraq-Turkey pipeline have been much more volatile. Unlike exports into the Gulf, the northern exports are not affected by the weather, but by sabotage or political decisions from the Oil Ministry and the Kurdish region’s Ministry of Natural Resources.
In April, the semi-autonomous Kurdistan Regional Government (KRG) instructed three oil firms to halt their contributions of crude oil to the export pipeline over delays to payments from the federal government. The result was a drop in daily exports to just 300,000 barrels, the lowest level in the last three years.
A settlement to the payment dispute was reached in September, but two issues remain unresolved. The first is whether the KRG can consistently meet its export quota of 150,000 b/d. The second is whether Baghdad can consistently make its payments to the oil firms working in the region. Low northern export levels could be more common now, with the KRG allowing oil companies to truck oil across the border, rather than through the pipeline.