February 24, 2023

WWW.ENERGYINTEL.COM

Iraq’s January Output Hits 10-Month Low

  • Weather-related loading disruptions and refinery turnarounds forced Iraq to shut in production, which fell to its lowest since March 2022.
  • Trafigura ended a 10-year crude marketing contract with Kurdistan, reflecting mounting difficulties for the Kurdish oil sector.
  • Competition from cheap Russian crude squeezed Basrah export to India, down by 25% in January compared with the 1H22 average.

Iraq’s crude output fell by around 100,000 barrels per day in January to 4.29 million b/d, according to Energy Intelligence estimates, its lowest in 10 months and 140,000 b/d below its Opec production target, due to weather-related loading disruptions at Basrah and refinery turnarounds.

The disruptions at the Basrah terminal accounted for most of the 128,000 b/d drop in total exports of Iraqi crude in January, although piped Kurdish crude exports were also down by around 37,000 b/d.

“Seven days of bad weather made it very difficult for the mooring and departure of the vessels, and very bad for the pumping. So sometimes we fully stopped the pumping and loading (in January),” said a senior official at state oil marketer Somo.

Iraq's January 2023 Production
('000 b/d)Vol.
Basrah exports3,163
Domestic refining590
Direct crude burn15
Less spiked condensate, fuel oil-30
KRG output395
Smuggling20
Exported from Kirkuk via Turkey†80
Exported from Kirkuk to Jordan*10
Stockbuild48
Total4,291

The loading disruptions caused a sizeable build in Basrah crude stocks and forced the oil ministry to cut production. The Somo official said output was reduced at fields producing Basrah Heavy and Basrah Medium.

Iraq’s crude production was also impacted by refinery run reductions of 60,000 b/d in January, related to scheduled turnarounds, and the official said it was unlikely that the new Karbala refinery — which should eventually raise Iraq’s refining capacity by 140,000 b/d — would start commercial operations next month as planned.

Iraqi production is expected to remain curtailed in February given further Basrah loading disruptions at the start of the month and planned maintenance at the Lukoil-operated West Quran-2 oil field. The latter was expected to take 400,000 b/d offline for 10 days starting Feb. 20.

Kurdish Discount, Kirkuk Premium

In a blow for the Kurdistan Regional Government (KRG), Trafigura this month confirmed that it has ended a long-term crude marketing contract with the semi-autonomous government.

Somo has warned of legal action against companies lifting Kurdish crude, or KBT. But the Swiss-based trading house is also reportedly in a dispute with the KRG over prepayments it is still owed and Erbil’s refusal to renegotiate the terms of the contract based on Kurdish crude’s widening discounts to Brent of as much as $20 per barrel.

Reflecting the strong European demand for “legitimate” medium sour Iraqi crude, the Somo official said the February-loading 600,000 bbl cargo of Kirkuk crude that the company offered via tender last month was at a premium to the official formula price (OSP) of $0.80-$1.00/bbl. The February OSP for Kirkuk was set dated Brent minus $3.45/bbl, while for March cargoes the discount was narrowed to just $1.45/bbl.

India Dilemma

Ship tracking data show that Basrah crude exports to India continue to face serious competition from Russian barrels, and higher demand in Europe has not offset the lost market share.

Basrah exports to India fell to 850,000 b/d in January, which compares with 1.14 million b/d in the first six months of last year, when India consistently beat China as the top destination for Iraqi crude.

Basrah exports to Europe, meanwhile, stood at 517,000 b/d in January, which is up by just 15,000 b/d compared with the first six months of last year, but still below the 12-month average of 550,000 b/d.

Created with Highcharts 9.0.0(million bbl)DESTINATIONS BY COUNTRY/REGION FOR TOTAL IRAQI CRUDE LOADINGSChinaIndiaEuropeSouth KoreaTurkeyUSOtherDec'21Jan'22Feb'22Mar'22Apr'22May'22Jun'22Jul'22Aug'22Sep'22Oct'22Nov'22Dec'22Jan'2301,0002,0003,0004,000Source: Energy Intelligence

Developments in the upstream offer Iraq some hope in terms of locking in long-term Asian demand.

Indonesia’s Pertamina this month agreed to buy an additional 10% in the 500,000 b/d West Qurna-1 oil field from departing operator Exxon Mobil, doubling its existing interest in the project.

Over the past few years, Pertamina has been processing its crude from Iraq at third-party refineries like Shell’s Bukom, since its own six refineries are not sufficiently complex to process Basrah. But the Indonesian national oil company is working on changing that with its proposed 300,000 b/d Tuban refinery.

Slated to be sanctioned by the end of this year, with a potential start of commercial operations in 2028, Tuban would enable Pertamina to process a broad range of crude grades like Basrah.

Basrah Exports by Destination
('000 b/d)Vol.
China1,099
India850
Europe517
South Korea251
US 225
Turkey129
Other Asia62
Egypt30
Total 3,163
Iraqi Mideast Gulf Loadings, January 2023
DateVol. ('000 bbl)VesselQualityLoading PointDestinationLifter
Jan11,960NIOVIBM--IndiaIOC
Jan1991FRONT SAVANNAHBH--TurkeySocar
Jan1961CARMENBM--IndiaIOC
Jan1959CARMENBH--IndiaIOC
Jan21,984FRONT DISCOVERY BMBerth 4ChinaSinochem
Jan3973GULF SUNRISE BMSPM 2US--
Jan4999ALMI HYDRA BMBerth 1US Chevron
Jan41,020DEMETRIOS BMSPM 2IndiaHPCL
Jan41,912GEORGIOSBHSPM 1ChinaUnipec
Jan41,997DIYALABMBerth 2Greece Hellenic Petroleum
Jan41,959NEW PARADISEBMSPM 2ChinaZhenhua
Jan5994DELTA HARMONY BMBerth 3ItalySaras
Jan51,973NEW NAXOS BHSPM 5IndiaReliance
Jan5990DELTA MARIABM--TurkeySocar
Jan61,952HABRUTBMSPM 3ChinaUnipec
Jan6996STENA SUNRISEBH--USValero
Jan6957VI BRIGHTBHSPM 1South KoreaHyundai
Jan7954YUAN YANG HU BHSPM 2ChinaPetroChina
Jan7989OLMPIC FIGHTERBMBerth 2Greece Motor Oil
Jan81,042FONTANABM--Greece Hellenic Petroleum
Jan9959TWIN POLLUXBHSPM 5IndiaNayara Energy
Jan9979RELIABLE WARRIORBMBerth 3ItalyEni
Jan101,967COSBRIGHT LAKEBMBerth 4ChinaUnipec
Jan10966MARINABH--IndiaNayara Energy
Jan11970NICOLAOSBHSPM 5TurkeyTupras
Jan111,951SAMHABHSPM 3South KoreaGS Caltex
Jan111,999FRONT GAULABHSPM 2ChinaCNOOC
Jan111,899YUAN YUE HU BMBerth 2ChinaUnipec
Jan12994NOBLEWAYBHSPM 2Spain Repsol
Jan12992MARAN ORPHEUS BMBerth 1France--
Jan121,045SEAVIGOURBMBerth 4TurkeyTupras
Jan121,967NEW ENTERPRISEBMSPM 1ChinaUnipec
Jan12956DESH VIBHORBM--IndiaBPCL
Jan131,957XIN YONG YANG BMSPM 5ChinaPetroChina
Jan13962LANDBRIDGE FORTUNE BHSPM 3PhilippinesPetron 
Jan13991ANTIGUA IBMBerth 3IndiaMRPL
Jan141,949ATHENIAN FREEDOMBM--ChinaUnipec
Jan161,933FRONT DUCHESSBM--ChinaUnipec
Jan161,023V. PROGRESS BM--South KoreaGS Caltex
Jan16971MIKELA PBH--Greece Motor Oil
Jan161,921YUFUSANBH--IndiaReliance
Jan17972V ADVANCEBH--South KoreaGS Caltex
Jan18961PRINCESS ALEXIABHSPM 5IndiaIOC
Jan18995SAMOSBMSPM 1IndiaHPCL
Jan18960SONANGOL MAIOMBE BMBerth 3SingaporeShell
Jan18949SINGAPORE VOYAGERBM--USChevron
Jan18999PISSIOTISBM--ItalyExxn Mobil
Jan191,958KASAGISANBM--IndiaIOC
Jan191,958FRONT PRINCESSBHSPM 2China--
Jan191,962KASHIMASAN BHSPM 3IndiaIOC
Jan191,957COSGRAND LAKEBMBerth 2ChinaSinochem
Jan20997FRONT SILKEBORGBM--Spain Cepsa
Jan201,079NEW RESOURCE BMBerth 1US--
Jan22954VI BREEZEBHSPM 1South KoreaHyundai
Jan23491DELTA IOS BHSPM 3ItalySaras
Jan23515DELTA IOS BMSPM 3ItalySaras
Jan23995STENA SUNSHINEBH--SpainRepsol
Jan231,938XIN WEI YANG BH--South KoreaSK Energy
Jan241,933SIFABHSPM 5IndiaReliance
Jan24957COSGLADE LAKE BMBerth 3ChinaPetroChina
Jan241,045MARE SICULUM BMBerth 1NetherlandsTrafigura
Jan241,925NEW CAESARBM--ChinaUnipec
Jan25957HOUSTON BMSPM 3IndiaHPCL
Jan25966BOSTONBM--IndiaBPCL
Jan261,958NINAWABMBerth 1ChinaSinochem
Jan26967DESH VAIBHAVBHSPM 2IndiaBPCL
Jan271,976KHK MAJESTYBM--US--
Jan28991EXPLORERBM--Greece Motor Oil
Jan28958NEW VISTA BHSPM 5ChinaUnipec
Jan291,044TWIN CASTOR BM--IndiaMRPL
Jan301,929PACIFIC VOYGER BH--China--
Jan30966DESH VIRAATBM--IndiaIOC
Jan30972DESH VIRAATBH--IndiaIOC
Jan301,044NEW ASSURANCE BMBerth 4NetherlandsShell
Jan30923NEW ASSURANCE BMBerth 4EgyptShell>EGPC
Total ('000 bbl)98,064----------
Total ('000 b/d)3,163--BH 1207; BM 1956------
Iraqi Loadings Ex-Ceyhan, January 2023
DateVol. ('000 bbl)VesselQuality Loading PointDestinationLifter
Jan2650VALPIAVE Kurdish crudeCeyhanCroatiaMol
Jan3240KIRIKKALEKirkukCeyhanTurkeyTupras
Jan41,000ZENOKurdish crudeCeyhanItalyAPI
Jan61,025GLORIA MARISKurdish crudeCeyhanCroatiaMol
Jan7239KIRIKKALEKirkukCeyhanTurkeyTupras
Jan9240KIRIKKALEKirkukCeyhanTurkeyTupras
Jan10650PS GENOVAKurdish crudeCeyhanCroatiaMol
Jan10780T.SADBERK              KirkukCeyhanTurkeyTupras
Jan11700VALLESINAKurdish crudeCeyhanIsrael--
Jan11720NEVERLANDKurdish crudeCeyhanCroatiaMol
Jan14600VALPIAVEKurdish crudeCeyhanCroatiaMol
Jan151,000TAHITIKurdish crudeCeyhanIsrael--
Jan17240KIRIKKALEKirkukCeyhanTurkeyTupras
Jan18700VALLESINAKurdish crudeCeyhanIsrael--
Jan19247KIRIKKALEKirkukCeyhanTurkeyTupras
Jan211,055SAMSARAKurdish crudeCeyhanCroatiaMol
Jan261,000ZENOKurdish crudeCeyhanItaly--
Jan26700VALPIAVEKurdish crudeCeyhanRomaniaPetrom
Jan26245KIRIKKALEKirkukCeyhanTurkeyTupras
Jan27650VALLESINAKurdish crudeCeyhanItalySonatrach
Jan301,000ONISILOSKurdish crudeCeyhanCroatiaMol
Jan30246KIRIKKALEKirkukCeyhanTurkeyTupras
Total ('000 bbl)13,872----------
Total ('000 b/d)449Of which 80 Kirkuk--------

    Simon Martelli, London