Wednesday 03, October 2018 by Bloomberg

Iraq crude exports extend gains in September as buyers shun Iran

 

Iraq exported more than four million barrels a day for a second consecutive month in September as buyers sought alternative supplies to Iran ahead of US sanctions.

Shipments from OPEC’s No. 2 producer were 4.062 million barrels a day, the highest since November 2016 and compared with 4.061 million a day in August, according to Bloomberg calculations from tanker tracking and port agent data. Iraqi crude is a good replacement for Iranian oil since the neighbouring countries share some fields and produce similar blends that are heavier and higher in sulphur than barrels from Europe or the U.S.

Iraq sold more crude to nations including China, India and the Netherlands in September, before sanctions take effect on Iran’s energy industry next month. India is said to plan no imports from Iran in November, spurring speculation over whether China will reduce purchases. Brent crude prices have climbed above $80 a barrel as Iranian shipments declined.

Iraq is seeing additional requests for spot oil cargoes from customers who are seeking to replace Iranian barrels, Ali Nazar Faeq al-Shatari, Iraq’s national representative to the Organization of Petroleum Exporting Countries, told reporters at a conference in Singapore last week. Refiners are looking for alternatives and that’s adding to demand in the market, he said.

August was the first time Iraq sold more than fourmillion barrels a day since December 2016. The country has boosted production by 230,000 barrels a day this year, to 4.66 million barrels daily by September, according to data compiled by Bloomberg. Iran’s output has declined 440,000 barrels, to 3.36 million barrels, the data show. The Islamic Republic’s crude and condensate sales dropped to 1.72 million barrels a day in September, down 260,000 barrels from the previous month, according to tanker data.

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