December 19, 2022


Basrah Exports Fall, But Iraq Eyes Capacity Fix

  • Iraq’s oil production fell in November by more than 100,000 barrels per day to 4.37 million b/d.
  • Russia supplanted Iraq as India’s top supplier in November as the EU ban pushes more Russian Urals to Asia.
  • Shipments of Basrah and Kurdish crude both edged down for the month, while Baghdad is hoping to hike its export capacity in the second half of 2023.

Despite Iraq’s Opec-plus production target being slashed by 220,000 b/d last month to 4.43 million b/d, in line with the group’s 2 million b/d cut, the Opec laggard still fell short by around 60,000 b/d, with exports of Basrah crude slipping below the year-to-date average.

Monthly oil revenues remained well above last year’s average in November, at $8.2 billion, but it was their lowest level this year, as oil prices weakened and exports fell.

Iraq hopes to reverse that trend by raising its southern export capacity by 250,000 b/d in the second half of next year, to 3.6 million b/d, Mohammed Saadoun, the country’s Opec representative, told state media. Together with its new Karbala refinery, that should allow Iraq to materially increase production in 2023.

New pumping stations, storage facilities and subsea pipeline projects are in the works, and some upstream projects are progressing too, with output from the Chinese-operated Maysan cluster of fields now standing at 300,000 b/d, the oil ministry said this month.

But after the planned boost, years may pass before bigger additions to Basrah’s restrictive export capacity are realized, including the installation of two new pipelines supplying the offshore Basrah Oil Terminal and the rehabilitation of the defunct Khor al-Amaya Terminal. If completed, these projects would each add another 900,000 b/d of export capacity, Saadoun said.

Iraq's November 2022 Production
('000 b/d)Vol.
Basrah exports3,225
Domestic refining720
Direct crude burn15
Less spiked condensate, fuel oil-50
KRG output350
Exported from Kirkuk via Turkey†82
Exported from Kirkuk to Jordan*10

Somo Courts European Demand

The drop in exports comes at a pivotal moment for the crude markets. The EU embargo on Russia crude is pushing more Urals to Asia, and particularly to India, formerly the top buyer of Iraqi crude.

In November, Iraq was surpassed by Russia as the top supplier to India for the first time, according to data analytics firms Vortexa, Kpler and information compiled by Energy Intelligence from shipping reports on Iraqi exports.

Russia sent around 910,000 b/d to India in November, according to Vortexa, fractionally up from October and exponentially higher from virtually nothing last year. Iraq sent 818,000 b/d, around 10% less than the previous month and 20% down on average exports during the first 11 months of 2021.

“India and others have taken a lot of Russian crude, which has freed up a lot of Middle East crude to go to Europe. Iraq has been the most affected, and you can see that from the way they dropped their OSPs [official formula prices] to Europe,” said a market source.

State oil marketing firm Somo cut its formula price for January —loading Basrah Medium to Europe by $1.20/bbl, more than the cut made by Saudi Aramco on January cargoes of rival Arab Medium to the Mediterranean, and by $1.50/bbl more for Basrah Heavy than the cut on rival Saudi Arab Heavy.

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

Surprise Kurdish Exports to Asia

Somo has consistently claimed that demand for Iraqi crude in Asia remains strong despite its displacement from India. Another trader said earlier this month that December cargoes of Basrah Medium had traded at premiums to the OSP of up to $1/bbl.

There is clear evidence that volumes to Europe are rising — they were up by 22% last month at 617,000 b/d. But it is not clear what levels spot cargoes of Basrah are achieving in Europe amid stiff competition also from sour Kazakh and Norwegian grades that European refiners are buying to replace Urals, as well as sweet Latin American, Azeri and US grades.

Basrah Exports by Destination
('000 b/d)Vol.
US 262
South Korea259
Other Asia32
Total 3,225

And in another sign that European demand for sour Iraqi crude is weaker than many had expected given the EU embargo on seaborne Russian crude that came into force on Dec. 5, three cargoes of Kurdish crude sailed to Asia in November, the first this year.

But the grade, also known as KBT, and normally seen as a good alternative to Urals, is also being spurned by many of former European buyers, who fear potential problems with Somo following the Iraqi Supreme Court's ruling in February that rejected Erbil’s right to sell the crude independently.

“Somo is pushing its customers to avoid Kurdish barrels,” said a trader with a Mediterranean refiner.

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
Aug '213.4432.9950.0890.3290.030
Sep '213.4923.0040.0970.3610.030
Oct '213.4783.0200.0890.3290.030
Nov '213.7313.2760.0650.3600.030
Dec '213.6793.1890.0870.3730.030
Jan '223.6053.1290.0820.3640.030
Feb '223.7973.2810.0520.4340.030
Mar '223.6893.2400.0510.3680.030
Apr '223.8283.2750.1000.4130.030
May '223.7243.1600.0970.4260.030
Jun '223.7773.2590.0970.3810.030
Jul '223.7193.2310.0760.3800.030
Aug '223.7203.2740.0360.3730.030
Sep '223.7003.2060.0770.3920.020
Oct '223.8103.2940.0780.4070.020
Nov '223.6583.2250.0820.3420.020
Iraqi Mideast Gulf Loadings, November 2022
DateVol. ('000 bbl)VesselQualityLoading PointDestinationLifter
Nov 11,035HILLABMBerth 1ChinaAoshan
Nov 11,002EUROTRADERBMBerth 4South KoreaHyundai
Nov 21,019RESILIENT WARRIORBMBerth 3ItalySaras
Nov 21,042DELTA SPIRITBMBerth 1GreecePachi
Nov 3999SEA CROSSBMSPM 2GreeceHellenic Petroleum
Nov 31,953XIN NING YANGBMSPM 1ChinaUnipec
Nov 31,906C.SPIRITBHSPM 5ChinaCaofeidian
Nov 41,964OMEGA TRADERBHSPM 3IndiaReliance
Nov 4996MILOSBM--US--
Nov 61,929XIN JIN YANGBMSPM 1China Unipec
Nov 61,003MARAN THETISBMBerth 1USMarathon
Nov 61,961NIOVIBMBerth 4China--
Nov 71,045ANTIGUA IBMBerth 3IndiaBPCL
Nov 7970APACHEBM--GreeceMotor Oil
Nov 71,835COSJADE LAKEBHSPM 5Europe--
Nov 9960AEGEAN DREAMBMBerth 1TurkeyTupras
Nov 9973MARAN ARESBHSPM 5South KoreaHyundai
Nov 91,932G.DREAMBHSPM 2South KoreaGS Caltex
Nov 91,970NEW HONORBMBerth 4ChinaTotsa>Hengli
Nov 10960V.PROGRESSBMBerth 3South KoreaGS Caltex
Nov 10981NEW VIGOROUSBHSPM 1ChinaUnipec
Nov 10981NEW VIGOROUSBMSPM 1ChinaUnipec
Nov 11957OLYMPIC LIONBHSPM 5FranceLe Havre
Nov 111,958NEW MERITBMSPM 2The Netherlands--
Nov 131,920COSRICH LAKEBMBerth 1ChinaUnipec
Nov 13997KINYRASBMBerth 4TurkeySocar
Nov 14972V.PROGRESSBHSPM 1South KoreaGS Caltex
Nov 141,929ATHENIAN FREEDOMBM--ChinaUnipec
Nov 141,041MILITOSBM--The NetherlandsShell
Nov 15959SYFNOSBMBerth 1MalaysiaShell
Nov 151,915ATLANTIC PIONEERBHSPM 2IndiaReliance
Nov 15960NEW COROLLABMBerth 4USValero
Nov 161,962NEW COURAGEBMSPM 1ChinaUnipec
Nov 16996KRITI BREEZEBMBerth 2GreeceMotor Oil
Nov 171,961EUROSPIRITBMBerth 3ChinaUnipec
Nov 17995TILOS IBM--IndiaIOC
Nov 17994CONCORDBM--IndiaIOC
Nov 181,961ALICEBMBerth 2US--
Nov 181,958XIN TONG YANGBHSPM 5ChinaUnipec
Nov 19992EPHESOSBMBerth 4The NetherlandsShell
Nov 221,931DALISBMSPM 3US--
Nov 221,033SEA CORALBMBerth 3SpainRepsol
Nov 231,910SEAHEROBHSPM 5ChinaRongsheng
Nov 231,002GLASGOW VOYAGERBMBerth 4USChevron
Nov 24999MARLIN SARDINIABMBerth 3GreeceTotsa>Motor Oil
Nov 24495ASIABHSPM 1ItalySaras
Nov 24489ASIABMSPM 1ItalySaras
Nov 25992NISSOS SIFNOSBM--TurkeySocar
Nov 251,960IZKIBHSPM 2ChinaUnipec
Nov 25997CAPTAIN LYRISTISBH--TurkeyEni>Socar
Nov 26977YUFUSANBHSPM 5IndiaReliance
Nov 261,021XIN YONG YANGBMBerth 4ChinaUnipec
Nov 261,966COSGLORY LAKEBMSPM 3ChinaUnipec
Nov 28960JAG LEENABMBerth 4IndiaMRPL
Nov 28960TENJUNBM--FranceExxon Mobil
Nov 281,955MARAN CLEOBM--China--
Nov 291,031SFL ALBANYBH--The NetherlandsShell
Nov 30994ELENIBMSPM 1IndiaNayara Energy
Nov 301,922SEAWAYS TRITONBHSPM 5South KoreaSK Energy
Nov 301,949ATHINA IIBMBerth 1ChinaRongsheng
Total ('000 bbl)96,760----------
Total ('000 b/d)3,225--BH 1,075; BM 2,150------
Iraqi Loadings Ex-Ceyhan, November 2022
DateVol. ('000 bbl)VesselQuality Loading PointDestinationLifter
Nov 2680LOVINAKurdish crudeCeyhanItalyAPI
Nov 3242PipelineKirkukCeyhanTurkeyTupras
Nov 41,050CHARVIKurdish crudeCeyhanChina--
Nov 91,050GLORIA MARIS Kurdish crudeCeyhanRomaniaPetraco>OMV
Nov 10243PipelineKirkukCeyhanTurkeyTupras
Nov 12600VALFOGLIAKurdish crudeCeyhanItalyPetraco>Sonatrach
Nov 121,050MELODIAKurdish crudeCeyhanSingapore--
Nov 131,000T.SEMAHAT KirkukCeyhanTurkeyTupras
Nov 16700LOVINAKurdish crudeCeyhanCroatiaMol
Nov 18700BOTAFOGOKurdish crudeCeyhanItalyAPI
Nov 191,000OTTOMAN COURTESYKurdish crudeCeyhanChina--
Nov 21242PipelineKirkukCeyhanTurkeyTupras
Nov 23700VALFOGLIAKurdish crudeCeyhanIsrael--
Nov 24242PipelineKirkukCeyhanTurkeyTupras
Nov 251,000SEADANCERKurdish crudeCeyhanItaly--
Nov 26700VALLESINAKurdish crudeCeyhanCroatiaMol
Nov 27240PipelineKirkukCeyhanTurkeyTupras
Nov 291,050ZENOKurdish crudeCeyhanIsrael--
Nov 30242PipelineKirkukCeyhanTurkeyTupras
Total ('000 bbl)12,731----------
Total ('000 b/d)424Of which 82 Kirkuk--------

Simon Martelli, London