Tuesday, 31 July 2012

Iraqi oil buyers face severe delays

Iraqi oil buyers are facing severe delays at the moment. This is as a result of sabotage. Pipeline maintenances have severely cut and delayed exports of Iraqi oil to Europe's Mediterranean markets, leaving traders to scramble for alternative grades at a time when refiners have already lost Iranian barrels because of sanctions.

Iraqi exports are generally prone to disruptions but a combination of security and infrastructure incidents have pushed loadings delays of Iraqi Kirkuk crude to around 20 days. The development shows the difficulties Iraq, one of the world's largest oil reserves holders, will face in its attempts to triple or even double production from the currently stagnant 3.0 million barrels per day.

Only one of the two lines of the Kirkuk-Ceyhan pipeline, linking Iraqi fields to the Turkish Mediterranean port, is used and flows stop on a daily basis as the pipeline awaits a much needed post-war overhaul. The already poor infrastructure of the pipeline is further weakened by frequent terrorist attacks and a blast this month held up crude oil flows for several days. A 4-day berth maintenance has also added to the delays effectively reducing exports to under 300,000 barrels per day in July, according to shipping data.

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