LONDON: Iraqi exports of Kirkuk crude oil are set to plunge to a new low in August after a dispute between Baghdad and the Kurdistan Regional Government has led to severe loading delays, a preliminary export schedule seen by Reuters showed.
Kirkuk exports, shipped via pipeline from Northern Iraq to the Turkish port of Ceyhan for loading on to tankers, are expected to be 197,000 barrels per day (bpd) from the port in August, with the first cargo pushed back to Aug. 13.
The volume is the lowest in several years, one trader said. The cargo lots are also smaller than usual at 550,000 barrels rather than 600,000 barrels.
"They have huge delays, so many cargoes were cancelled," added the trader.
Iraqi state marketer Somo is trying to compensate for delays amounting to nearly 20 days, which lengthened over the course of July and led to a 100,000 bpd export cut. July loadings have fallen to under 300,000 bpd from the near 400,000 bpd originally scheduled, shipping data showed.
Exports had run at 400,000 bpd earlier this year until the Kurdish government announced in April it was halting flows because firms operating there were not getting paid by the central government in Baghdad.
"The Northern Iraq government stopped adding their 150,000 to 170,000 bpd because of the dispute, so heavy delays started," said a shipping source. "So now we are receiving 250,000 to 350,000 bpd."
Kirkuk crude accounts for a fraction of Iraq's overall exports of around 2.4 million bpd. Loadings of the grade are typically prone to disruptions from security and infrastructure problems, but the dispute has pushed the delays to an extreme.
Ceyhan, which is the only export venue for Kirkuk, faces a backlog of 13 tankers waiting to load oil. Some have been at anchorage for 15 days, shipping data showed.
Comments
Comments are closed for this article.