Iraq's southern oil exports to hit record high
Southern oil exports average 2.60mbpd in May
Oil exports from Iraq's southern terminals are on course to break records this month, as oil exports for the month average 2.60mbpd, according to Reuters.
But shipments of Kirkuk crude from northern Iraq have stayed offline since a bomb blast halted the oil flow along the pipeline on March 2, industry sources said, keeping total Iraqi exports below their potential.
Exports from Iraq's southern terminals have averaged 2.60 million barrels per day (bpd) in the first 27 days of May, according to shipping data tracked by Reuters. Two industry sources, who also monitor the exports, had a similar estimate.
If that is sustained for the rest of May, southern exports this month would top April's level of 2.51 million bpd, the highest since 2003.
Repairs are underway on the northern pipeline, a step towards boosting exports even higher, but traders do not expect a rapid return of Kirkuk to the market.
"I am a bit cautious," a trader of Iraqi crude said, referring to Kirkuk. "It does not look like things are going smoothly there."
Iraq has expanded its southern export capacity, easing bottlenecks that had kept a lid on shipments, and is aiming to lift exports to 3.4 million bpd in 2014, including 400,000 bpd from the autonomous Kurdish region.
Helping lift southern output, Russia's Lukoil started commercial production from a new oilfield, West Qurna-2, in March. Its output is eventually expected to reach 1.2 million bpd, 10 times higher than the initial rate.
Without exports from northern Kirkuk fields via pipeline to Turkey, however, Iraq's overall shipments are still set to be below February's rate of 2.8 million bpd, which Deputy Prime Minister for Energy Hussain al-Shahristani had described as a record high.
There are signs that northern flows may resume in the next few weeks.
An Iraqi oil official said last week that engineers had reached some damaged sections of the northern pipeline, which was attacked by an al Qaeda-offshoot cell and that repairs could be finished in 10 to 15 days from May 20 if all went well.
Kurdistan last week started loading oil from its new pipeline for shipment from Ceyhan, defying the central government. The first shipment of 1 million barrels may go to Italy or Germany, Turkey's energy minister said.