A worker walks at the Nahr Bin Umar oil field north of Basra, Iraq, on Dec. 21, 2015.Essam Al Sudani/Reuters
Iraq’s crude oil exports have increased so far in July, according to shipping data and industry sources, suggesting OPEC’s second-largest producer is still undershooting its pledge in an OPEC-led supply cut deal.
Southern Iraqi exports in the first 20 days of July averaged 2.70 million bpd, according to the average of figures from Refinitiv Eikon and two industry sources. That is unchanged from June’s official figures for exports from southern Iraq.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, began a record supply cut in May to bolster oil prices hammered by the coronavirus crisis. Iraq is cutting output by 1.06 million bpd under the deal.
The July figures imply Iraq is still some way from fulfilling its pledges and is exporting far more than a July loading program indicated.
Iraq had told OPEC+ it would make up for over-production in May and June through larger cuts in later months.
The south is the main outlet for Iraq’s crude, so a good part of its OPEC+ cut should show up in lower exports.
Petro-Logistics, a company that tracks shipments, estimated Iraq’s exports from its southern terminals including Basra to be higher - an average of 2.9 million bpd, which is down 240,000 bpd from the company’s June estimate.
“The drop in exports could be seen as the consequence of a political willingness to reduce supply,” Petro-Logistics Chief Executive Daniel Gerber told Reuters.
“However, weak exports in the latest week are mostly the result of bad weather at Basra, which impaired loadings for at least a couple of days.”
Baghdad was reluctant to join previous OPEC-led supply cut efforts that began in 2017, and was at times OPEC’s least compliant member. Iraq says it is in the country’s interest to comply with the current deal.
However, exports from northern Iraq have increased in July, according to tanker data and two industry sources. So far, northern exports are at least 450,000 bpd, they said, which would be up from 370,000 bpd in June.
The boost in northern shipments means Iraq’s exports are up by 80,000 bpd so far in July, excluding Petro-Logistics’ figure.
In June, Iraq delivered about 88 per cent of its cut, according to Reuters calculations based on OPEC data. If exports in July hold steady, adherence has fallen to 65 per cent, based on Reuters’ calculations.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.