Despite the turmoil of 2020 in the crude oil market, Iraq has managed to increase its oil exports to China, its main customer. In its latest weekly report, shipbroker Banchero Costa said that “oil prices began to recover after the Organization of Petroleum Export Countries (OPEC) and its allies agreed to end a price war and make their biggest-ever production cut. The deal has helped oil prices to double in the past two months by withdrawing about 10 percent of global supplies from the market. Under the OPEC+ deal, Iraq is obliged to compensate for their over-production on May and June in the coming months. In the first half of 2020, OPEC’s second-largest producer exported just 80.4 mln tonnes of crude oil, according to vessel-tracking data from Refinitiv. This represents a net decline of -9.3% y-o-y, compared to the 88.7 mln tonnes exported in the same period of 2019, and -6.9% down from the 86.6 mln tonnes exported in January-June 2018”.
According to Banchero Costa, “on a monthly basis, January 2020 showed a -8.9% year-on-year drop to 14.1 mln tonnes, and February showed a -11.5% drop y-o-y to 13.0 mln tonnes, whilst March recorded a +2.0% gain y-o-y to 14.1 mln tonnes. April was -5.7% y-o-y to 14.5 mln tonnes, and May also showed a contraction of -8.9% y-o-y to 13.3 mln tonnes. In June 2020 we saw output as low as 11.4 mln tonne, shrinking -14.2% m-o-m from May 2020. This was -22.2% less than the 14.7 mln t exported during June 2019, showing that Iraq improved its compliance with OPEC+ cuts”.
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