Iraq oil exports rise in October, recovery slower than expected

LONDON: Iraq’s oil exports have risen in October due to a reduced impact from infrastructure work at southern terminals, although the increase is smaller than buyers expected as supply constraints from OPEC’s second-largest producer persist.
Investors and European refiners are watching the level of Iraq’s exports closely as a slowdown in its oil revival in 2013, as well as outages in Libya, has helped to support oil prices near $109 a barrel.
Exports from Iraq’s southern terminals have averaged 1.92 million barrels per day (bpd) so far in October, according to shipping data tracked by Reuters. That is up from 1.67 million bpd in the first 16 days of the month and September’s 1.82 million bpd.
Still, the October total is set to be below the 2 million bpd buyers had expected.
Shipping sources said bad weather had delayed some tanker loadings, while a buyer said the impact of the maintenance and expansion work had persisted.
“The maintenance was the major factor,” one buyer of Iraqi crude said.
“I think there will be huge delays in November as they still have barrels remaining from October.”
One of the four berths at the Basra Oil Terminal has remained vacant for much of the second half of October, according to a shipping source. Two were closed in the early stages of the work, limiting shipments.
Southern exports averaged 2.31 million bpd in August and Iraq was aiming for the constraint on exports to last for about a month from mid-September.
Some in the industry, such as the International Energy Agency, have pointed to the potential for the reduction to persist.
The maintenance and expansion work is partly designed to increase export capacity and help Iraq maintain its position as the second-largest producer in the Organization of the Petroleum Exporting Countries.
Iraq exports most of its oil from its southern ports. Shipments of Kirkuk crude from northern Iraq remain below their potential, constrained by bomb attacks on the pipeline to Turkey and a dispute with the Kurdistan Regional Government over oil and land rights.
So far in October, Kirkuk shipments have averaged about 200,000 bpd, industry sources said, 50,000 bpd less than in September, which would bring total exports to 2.12 million bpd.
Iraq’s oil revival, which got under way in 2010 after decades of sanctions and wars, has slowed in 2013 due to infrastructure and security problems, although supply is expected to start rising again later in the year.