LONDON: Iraq’s oil exports were cut sharply by a pipeline leak and work at southern ports, industry sources said, raising concern among buyers of prolonged outages despite Iraqi assurances.
Baghdad’s oil revival, which got underway in 2010, has slowed this year due to infrastructure and security issues, keeping production far below targets and sometimes even under last year’s levels of 3 million barrels per day.
An Iraqi oil official said last week that exports from the Basra Oil Terminal would be constrained for about a month while metering equipment was installed, even though the work itself would continue into 2014.
Iraq exports most of its oil from its southern ports and supplies in September have fallen by 500,000 bpd, according to shipping data. Some buyers expected extended drops in shipments.
“They claim it won’t affect exports but to be honest I think it will last some time,” said one buyer, who wished to remain anonymous.
A lengthy reduction in supply from Iraq would add to losses such as Libya’s export shut down, further tightening the market and supporting oil prices that are trading near $110 a barrel.
Southern shipments have averaged 1.83 million bpd in the first 15 days of September, according to shipping data. That is down from August’s average of 2.31 million bpd, and on a par with the 1.8 million bpd scheduled.
Supplies were even lower Monday as Iraq has had to cut output from its biggest southern producer Rumaila due to a pipeline leak, two industry sources and an oil official said.