Iraq ships 2.6mln bpd south, sends 250,000 bpd to Kirkuk

Summary

• Basra Oil Company says southern exports run near 2.6 million bpd so far in September.
• Around 250,000 bpd of Basra crude now moves to Kirkuk for export via Ceyhan.
• Baghdad is widening its northern route after Hormuz shipments were disrupted.

The latest

Iraq is exporting roughly 2.6 million barrels per day from its southern ports so far this month and pumping more than 3 million bpd from southern fields, Bassem Abdul Karim, head of the Basra Oil Company, said Thursday at an energy conference in Basra. He added that about 250,000 bpd of Basra crude is being moved north to Kirkuk for shipment through Turkey's Ceyhan terminal.

Details

• The headline figure: Abdul Karim put September's southern port exports at around 2.6 million bpd, the bulk of Iraq's total crude sales. He said production from the southern oilfields is running above 3 million bpd, leaving a gap between wellhead output and seaborne loadings that covers domestic use and internal transfers.
• The northern flow: About 250,000 bpd of Basra crude is being sent to Kirkuk to feed the northern export system and reach Ceyhan on Turkey's Mediterranean coast, according to Abdul Karim. That volume is a fraction of southern loadings but represents a deliberate rerouting of barrels away from the Gulf.
• The pilot scheme: Iraq launched a pilot operation on September 16 to truck crude by road from southern oilfields to a storage facility in Kirkuk, Reuters reported. The stated aim is to lift supplies into the northern pipeline network and potentially raise shipments through Ceyhan.
• The trigger: The push north followed disruption to Iraqi shipments through the Strait of Hormuz, the country's main export artery, after the US-Israeli war on Iran, according to Reuters. Southern exports depend almost entirely on that waterway, which leaves the bulk of Baghdad's oil revenue exposed to a single chokepoint.
• Road, not pipeline: The September 16 operation moves crude by truck rather than through existing infrastructure, indicating the southern fields are not yet linked to Kirkuk by a working pipeline at the volumes Baghdad wants. Trucking is a stopgap that carries far higher unit costs than pipeline transport.
• Where it was said: The figures were disclosed publicly at an energy conference in Basra rather than through a ministry statement. Abdul Karim did not give a target for how far the Kirkuk volumes could rise, or a timeline for moving the pilot into sustained operation.
• The Ceyhan question: Ceyhan is the endpoint of the Iraq-Turkey pipeline and the only significant export outlet Baghdad controls outside the Gulf. Larger northern volumes would depend on the capacity available on the Iraqi side of that line, which Abdul Karim did not quantify.

Background

Iraq is OPEC's second-largest producer, and the overwhelming majority of its crude leaves through Basra-area terminals into the Gulf and out via Hormuz. The northern route through Kirkuk to Ceyhan has operated intermittently for years, well below its design capacity.

Between the lines

The scale tells the story: 250,000 bpd moving north against 2.6 million bpd loading in the south is under 10% of exports, so the Kirkuk channel is a hedge rather than an alternative. That Baghdad is willing to truck crude overland to build it suggests the Hormuz disruption was serious enough to justify an expensive workaround while a durable fix is arranged.

What's next

Watch whether the pilot trucking operation converts into sustained flows, whether the 250,000 bpd figure rises in October, and any announcement on Ceyhan loading volumes or capacity on the Iraq-Turkey pipeline.

Source: Reuters (Aref Mohammed) via Zawya