June 24, 2022

WWW.ENERGYINTEL.COM

External Pressures Grow on Constrained Iraqi Crude

  • Iraq’s crude output dipped fractionally in May, with Basrah exports falling back from April’s two-year high amid doubts about its loading constraints.
  • Russian oil flows east threaten to squeeze Iraq in its key Asian market as China imported record volumes of Russian crude in May.   
  • Two tankers loaded with Iraqi oil, including a Suezmax crude cargo bound for Greece, were seized by Iran on May 27.  

Iraq’s crude production was a touch lower in May, at 4.386 million barrels per day, according to Energy Intelligence estimates, marked by a 114,000 b/d drop in exports of Basrah crude largely offset by an increase in refining throughputs and stockbuilds.

This put Opec’s second-largest producer 75,000 b/d below its monthly target, which is set to rise by around 50,000 b/d this month to 4.509 million b/d. There are persistent doubts about the country’s ability to fix its export bottlenecks and bring additional supplies to the market.

Kurdish and Kirkuk exports via the north were little changed in May at about 520,000 b/d but also have limited room to grow.

Iraq's May 2022 Production
('000 b/d)Vol.
Basrah exports3,160
Domestic refining602
Direct crude burn20
Less spiked condensate, fuel oil-45
KRG output406
Smuggling85
Exported from Kirkuk via Turkey†97
Exported from Kirkuk to Jordan*11
Stockbuild50
Total4,386

Relentless Export Woes

“The main issue is the Basrah terminal because the sealine is very old … If you increase the pumping rate you will cause some leak in the pipe,” said an official with state marketer Somo.

His words echoed comments by Finance Minister Ali Allawi on Jun. 18, who said that Iraq would not “realistically” be able to raise its output beyond the targeted 6 million b/d by 2027 — largely due to outdated export infrastructure. This contradicts much rosier targets touted by the oil minister.

Equipment that could raise the crude export capacity of the single point moorings at Basrah by up to 100,000 b/d was supposed to have arrived, the Somo official said, adding that he was still waiting for this to happen.

But in a rare sign that Iraq's production may in fact go up next month, traders said the availability in Asia of destination-free Basrah Heavy cargoes for July loading appeared to have risen.

Iraqi Oil Exports
(million b/d)TotalBasrahSomo CeyhanKRG Ceyhan PipelineKRG Trucked to Turkey
Avg. 20122.4222.0490.3700.0000.003
Avg. 20132.4202.1270.2640.0000.029
Avg. 20142.6422.4580.0620.0860.036
Avg. 2015 3.4042.8440.1590.3630.038
Avg. 20163.8043.2900.0210.4920.003
Avg. 20173.8193.3030.0160.4700.029
Avg. 20183.8593.4820.0110.3490.017
Avg. 20193.9643.3990.0920.4230.030
Avg. 20203.4132.8910.0760.4060.033
Avg. 20213.4292.9490.0910.3590.030
Jan'223.6053.1290.0820.3640.030
Feb'223.7973.2810.0520.4340.030
Mar'223.6893.2400.0510.3680.030
Apr'223.8183.2750.1000.4130.030
May'223.7153.1600.0970.4260.030

Ship Seizure

Compounding Iraq’s wider export woes, Iranian forces on May 27 seized the Suezmax tanker Delta Poseidon, which was carrying 1 million barrels of Basrah Medium to Greece on behalf of Motor Oil, and the Panamax vessel Prudent Warrior, which was taking 700,000 bbl of fuel oil to the US for Chevron.

The move was in retaliation for Greece's detaining a Russian-flagged Iranian crude cargo earlier in the month. Both vessels held by Iran remain in Iranian waters, although Iraqi officials are hopeful that they will be released after reports that Greece has agreed to free the Iranian cargo.

Iraq’s refining throughputs, meanwhile, topped 600,000 b/d in May for the first time in a year. But they still fell short of domestic requirements. The ministry currently must import 14,000 cubic meters of gasoline and around 9,000-10,000 cubic meters of gasoil daily through the Khor al-Zubair port, the official noted.

Iraq’s total crude stocks, meanwhile, rose by around 100,000 b/d in May, but Somo cautioned that this figure was preliminary and could be revised.

Crowded Asian Market

Rising eastward flows of cheap Russian crude are threatening to eat into the traditional market share of Mideast producers like Iraq. To keep its exports competitive, Somo slashed its official formula prices for July-loading Basrah crude to Asia relative to comparable Saudi grades.

Last month, China imported around 2 million b/d of Russian crude, which sold at $16/bbl less than rival Saudi imports, according to official customs data, and the country’s current appetite for spot Mideast cargoes has softened, numerous traders have said.

China’s May imports of crude from Iraq, its third-largest supplier, held at just above 1.1 million b/d, but May exports, which take about one month to arrive, fell below 700,000 b/d, according to Energy Intelligence tracking based on shipping reports and Kpler data.

Iraq’s exports to its top buyer India, meanwhile, remained robust in May at about 1.14 million b/d, the same tracking data showed. But the proportion of total Iraqi crude exports bound for Asia in May fell from 67% to 58% month on month, its lowest in at least the past two years.

Created with Highcharts 9.0.0(million bbl)DESTINATIONS BY COUNTRY/REGION FOR TOTAL IRAQI CRUDE LOADINGSChinaIndiaEuropeSouth KoreaTurkeyUSOtherSep '20Nov '20Jan '21Mar '21May '21Jul '21Sep '21Nov '21Jan '22Mar '22May '2201,0002,0003,0004,000Source: Energy Intelligence

Pivoting to Europe

The slack was mainly picked up by the US, with Iraq’s trans-Atlantic crude exports doubling in May to around 360,000 b/d.

Illustrating the growing challenge Somo faces in its main Asian market, the company reportedly failed to sell a July-loading cargo and an August-loading cargo of Basrah Heavy in two separate tenders this month. But an August-loading Basrah Medium cargo did sell via tender this week at a premium of between 10¢-40¢/bbl to the official formula price, according to several sources.

“Our target is to maintain our Asian market share and to increase in Europe,” he said. So far tracking data show no noticeable change to the flows of Basrah crude to Europe.

Iraqi Mideast Gulf Loadings, May 2022
DateVol. ('000 bbl)VesselQualityLoading PointDestinationLifter
May 1965JAG LALITBMBerth 4IndiaHPCL
May 31,985NAVE GALACTICBMBerth 2NetherlandsShell
May 31,983APOLLONASBHSPM 1NetherlandsShell
May 41,927XIN DAN YANG BMSPM 2TaiwanFormosa 
May 41,998YUFUSANBHSPM 5IndiaReliance
May 4998DELTA OCEANBMBerth 2TurkeyTupras
May 51,044CONCORD BMBerth 4IndiaIOC
May 5743DESH PREMBM Berth 2IndiaHPCL
May 5977DESH UJAALA BHSPM 1IndiaReliance
May 5963RED MOONBMBerth 3ItalyEni
May 61,962KASAGISAN BMSPM 1IndiaIOC
May 6996AEGEAN UNITYBMBerth 3IndiaMRPL
May 61,004HOUSTON BHSPM 5IndiaNayara Energy
May 61,004NEW VISTA BMSPM 3ChinaUnipec
May 7955NEW PARADISEBMBerth1ChinaUnipec
May 71,960NEW SPIRITBM SPM 2ChinaSinochem
May 8981UNIVERSAL CREATORBMBerth 4South KoreaGS Caltex
May 91,041EURODIGNITYBHSPM 2IndiaMRPL
May 91,997SEADUCHESSBHSPM 5South KoreaGS Caltex
May 101,930FRONT QUEENBMBerth 3ChinaCNOOC
May 11971ELANDRA OSPREYBMBerth 4TurkeySocar
May 111,025CENTURYBHSPM 5IndiaIOC
May 112,006SEAWAYS RAFFLESBMSPM 3USValero
May 11955DESH UJAALABHSPM 1IndiaReliance
May 111,036NISSOS SIKINOSBMBerth 2TurkeyTupras
May 12995ECO MALIBUBHSPM 5USValero
May 121,958CAPTAIN X.KYRIAKOUBMSPM 2ChinaUnipec
May 12991GIANNISBHSPM 1FranceIplom
May 13961TRIKWONG VENTUREBH--South KoreaHyundai
May 131,969ATHERINABMBerth 3ChinaUnipec
May 141,954DIABMSPM 3ChinaSinochem
May 15989DELTA HARMONYBMBerth 2GreeceHellenic Petroleum
May 161,039PSARA IBHSPM 2IndiaNayara Energy
May 161,002DESH VAIBHAVBHSPM 1IndiaIOC
May 161,001DESH VAIBHAVBMSPM 1IndiaIOC
May 16993ENERGY TRUMPHBMBerth 1GreeceMotor Oil
May 171,824NEW PROSPECTBMBerth 4ChinaUnipec
May 171,809DIJLAHBMSPM 3ChinaSinochem
May 17978FRONT CORALBMBerth 2NetherlandsExxon Mobil
May 171,031MARAN ARESBHSPM 5NetherlandsExxon Mobil
May 181,959ALTAIR TRADERBHSPM 1IndiaReliance
May 18977SEAWAYS MCKINLEYBMBerth 1ChinaUnipec
May 181,958YUFUSANBHSPM 1IndiaReliance
May 19979SOFIABMSPM 3TurkeySocar
May 191,954BALTIC LOYALTYBMSPM 2ChinaUnipec
May 19960NINAWABMSPM 2ChinaZhenhua
May 20989PATMOS IBMBerth 2IndiaHPCL
May 201,971NEW WEALTHBMBerth 1USLong Beach
May 22961CHIOS IBM Berth 1ItalySaras
May 231,045FRONT CLIPPERBHSPM 1SpainRepsol
May 23963SOUNIONBMBerth 3ItalyShell
May 231,018SUEZ HANSBMSPM 3TurkeyTupras
May 23750DESH SAMMANBM Berth 2IndiaHPCL
May 23972AEGEAN DREAMBMBerth 4IndiaIOC
May 241,989FPMC C NOBLEBMBerth 4IndiaMumbai
May 241,015IOANNABHSPM 3IndiaHPCL
May 241,013IOANNABMSPM 3IndiaHPCL
May 24979UNIVERSAL CREATORBHSPM 3South KoreaGS Caltex
May 25992MARE SICULUMBHSPM 1ItalyShell
May 25962ALBORANBHSPM 3ChinaUnipec
May 25989ZOUZOU NBMSPM 1IndiaNayara Energy
May 26968YUAN KUN YANGBHSPM 5ChinaPetroChina
May 26995DELTA POSEIDON*BMBerth 2GreeceMotor Oil
May 261,957EL SEGUNDO VOYAGERBMBerth 1USChevron
May 27981DESH VIBHORBHSPM 2IndiaIOC
May 27979DESH VIBHORBMSPM 2IndiaIOC
May 27977SYFNOSBMSPM 2IndiaBPCL
May 281,004XIN HUI YANGBMBerth 4USMarathon
May 28979EUROVOYAGERBMBerth 3IndiaBPCL
May 291,991C. GLORYBHSPM 5South KoreaSK Energy
May 301,945ESTEEM EXPLORERBMBerth 1US--
May 30967FRONT CASCADEBMBerth 2Spain Repsol
May 30956CELESTE NOVABHSPM 1IndiaReliance
May 311,047MARLIN SOMERSETBMSPM 2USTrafigura>Shell
May 31961CONCORDBMBerth 4IndiaIOC
May 31954NISSOS TINOSBHSPM 5USShell
May 312,005BRIGHT PIONEERBMSPM 3IndiaIOC
Total ('000 bbl)97,961*Hijacked by Iran--------
Total ('000 b/d)3,160--BM: 2,135 BH 1,025------
Iraqi Loadings Ex-Ceyhan, May 2022
DateVol. ('000 bbl)VesselQuality Loading PointDestinationLifter
May 11,000OTTOMAN TENACITYKurdish crudeCeyhanGreece Pachi
May 4600TRIDENT HOPEKurdish crudeCeyhanItaly Genoa
May 4241PipelineKirkukCeyhanTurkeyTupras
May 61,000POLIEGOSKurdish crudeCeyhanSpainCepsa
May 8242PipelineKirkukCeyhanTurkeyTupras
May 91,000VALTAMEDKurdish crudeCeyhanItaly--
May 10600SAGAKurdish crudeCeyhanRomaniaPetromidia
May 11679T.SEMAHAT KirkukCeyhanTurkeyTupras
May 121,009OTTOMAN SINCERITYKurdish crudeCeyhanGreeceMotor Oil
May 1297PipelineKirkukCeyhanTurkeyTupras
May 13600VALFOGLIAKurdish crudeCeyhanCroatiaMOL
May 14292PipelineKirkukCeyhanTurkeyTupras
May 15600VALLESINAKurdish crudeCeyhanItalyAPI
May 16600NEVERLANDKurdish crudeCeyhanItalyTrieste
May 18600ALICANTEKurdish crudeCeyhanItaly--
May 18600KRITI BASTION Kurdish crudeCeyhanSpain Cepsa
May 18241PipelineKirkukCeyhanTurkeyTupras
May 21549AMAX AVENUEKurdish crudeCeyhanItalyTrieste
May 24600NEW TRUST                 Kurdish crudeCeyhanGreeceMotor Oil
May 231,001T. SADBERKKirkukCeyhanTurkeyTupras
May 261,000VALTAMED Kurdish crudeCeyhanSpainCepsa
May 27600VALFOGLIAKurdish crudeCeyhanGreecePachi
May 28600KRITI SAMARIAKurdish crudeCeyhanItalyTrieste
May 28292PipelineKirkukCeyhanTurkeyTupras
May 301,000STORVIKENKurdish crudeCeyhanItalyTrieste
May 31600VALLESINAKurdish crudeCeyhanIsrael--
Total ('000 bbl)16,253----------
Total ('000 b/d)524of which Kirkuk 97--------

Simon Martelli, London and Freddie Yap, Singapore