June 8, 2023 [Oil Prices]- Iraq, OPEC’s second-largest oil producer, exported on average 3.3 million barrels per day (bpd) of oil in May, flat compared to April, according to the Iraqi oil ministry.
Iraq’s revenues from oil stood at $7.3 billion last month, as sales were made at an average of $71.30 per barrel, the ministry said in a statement carried by Reuters.
Iraq is currently exporting oil only via its southern oil export terminals, with around 450,000 bpd of exports from the northern fields and from the semi-autonomous region of Kurdistan still shut in due to a dispute over who should authorize the Kurdish exports.
Amid fears of a recession and concerns about slower-than-expected Chinese recovery, the oil market hasn’t particularly missed Kurdistan’s exports. Oil prices registered monthly losses in both April and May. Oil actually had the seventh consecutive month of monthly losses in May.
Kurdistan’s exports—shut-in since March 25—have yet to resume. Earlier this week, reports emerged that a flare-up between the regional government in Kurdistan and the federal Iraqi government in Baghdad added risk for the resumption of oil flows from the northern Iraqi region.
Rudaw reports that the spike in tension followed amendments in relation to Kurdistan that the Iraq government had made to the federal budget last week. The Kurdish government slammed the changes as unconstitutional.
Kurdistan’s crude oil exports—around 400,000 bpd shipped through an Iraqi-Turkey pipeline to Ceyhan and then on tankers to the international markets—were halted on March 25 by the federal government of Iraq.
The suspension of oil flows out of northern Iraq and Kurdistan via Ceyhan forced companies to either curtail or suspend production because of limited capacity at storage tanks.
Iraq is now waiting for a final go-ahead from Turkey, but the recent Baghdad-Kurdistan flare-up could delay the approval of the budget and may destroy the delicate balance that Baghdad and Erbil achieved in the wake of the oil export halt from Kurdistan.
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