Iraq’s oil exports rise in December toward record
Iraq’s oil exports rise in December toward record
The increase will add to ample supplies and may worry other members of the Organization of the Petroleum Exporting Countries unable to expand exports and suffering a drop in oil income after a near 50 percent drop in prices since June.
Exports from Iraq’s southern terminals have averaged at least 2.60 million barrels per day (bpd), according to shipping data for the first 23 days of December tracked by Reuters. Two industry sources who monitor the exports had similar estimates.
“This is looking very strong — massive volumes,” said an industry source, who saw southern flows rise as high as 2.80 million bpd for part of the month.
The southern oilfields produce the bulk of Iraq’s oil and the terminals are its main outlet to world markets. Located far from the parts of the country controlled by Islamic State, they have kept pumping despite the unrest.
In addition, flows of Kirkuk crude out of the Turkish port of Ceyhan have returned in December, after Baghdad reached a deal with the Kurdistan Regional Government.
Iraq’s State Oil Marketing Organization, or SOMO, has been exporting about 180,000 bpd of Kirkuk so far in December, two industry sources said. The oil is being exported in a Kurdish pipe to Ceyhan as an older line has been repeatedly attacked.
“It is all going through the Kurdish line now,” said a trade source with a company that buys Iraqi crude. “The old Kirkuk pipeline is not usable.”
That brings pipeline exports of Iraq’s main crudes to around 2.78 million bpd — close to the 2.80 million bpd record high posted in February, just before flows from Iraq’s Kirkuk fields along a pipeline running to Ceyhan were halted by a bomb attack.
Northern exports may be higher if crude produced in the Kurdistan region and being shipped to Ceyhan is included, the sources said. Exact figures are not available, but one source said total shipments from northern Iraq were now at least 300,000 bpd.
The southern export rate is in line with comments from the head of SOMO, Falah Alamri, who said on Sunday he expected at least 2.60 million bpd. If sustained, December’s southern exports will exceed May’s 2.58 million bpd, which was the highest since at least 2003.
Iraq aims to push exports even higher in 2015. Oil Minister Adel Abdel Mehdi said in November he expected shipments to rise next year to an average of 3.2 million bpd, including Kurdistan.
The plan has caused unease for other OPEC members and entrenched the reluctance of some to cut their own supply, according to comments from oil ministers and OPEC delegates made during OPEC’s Nov. 27 meeting.
Iraq, however, has argued it should be exempt from OPEC supply restraint as it˝ is recovering from years of sanctions and war. It has been expanding production in the south since Western companies signed service contracts with Baghdad in 2010.
Smooth progress is not guaranteed. Iraq has missed its targets to expand supplies in the past and exports are often disrupted by bad weather and technical problems, as well as by unrest.
Northern exports of Kirkuk crude had been shut since March since the bomb attack, keeping total Iraqi exports below their potential for much of 2014.
Still, Kurdistan began independently exporting crude to Ceyhan in May, angering Baghdad which claimed sole authority to ship oil from the country.
Iraq’s cabinet meanwhile approved a draft 2015 budget worth 123 trillion dinars ($103 billion at the free market rate) which was made possible by better ties between Baghdad and the autonomous Kurdish region, but was constrained by plunging oil prices.
The budget, which envisions a deficit of 23 trillion dinars, will be presented to parliament after a committee headed by Prime Minister Haider Al-Abadi fine-tunes some of the language at a meeting expected on Wednesday, Finance Minister Hoshiyar Zebari said.
US unveils new veto threat against WTO rulings
- US tells WTO appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days
- Trump, who has railed against the WTO judges in the past, threatens to levy a 20 percent import tax on European Union cars
GENEVA: The United States ramped up its challenge to the global trading system on Friday, telling the World Trade Organization that appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days.
The statement by US Ambassador Dennis Shea threatened to erode a key element of trade enforcement at the 23-year-old WTO: binding dispute settlement, which is widely seen as a major bulwark against protectionism.
It came as US President Donald Trump, who has railed against the WTO judges in the past, threatened to levy a 20 percent import tax on European Union cars, the latest in an unprecedented campaign of threats and tariffs to punish US trading partners.
Shea told the WTO’s dispute settlement body that rulings by the WTO’s Appellate Body, effectively the supreme court of world trade, were invalid if they took too long. Rulings would no longer be governed by “reverse consensus,” whereby they are blocked only if all WTO members oppose them.
“The consequence of the Appellate Body choosing to breach (WTO dispute) rules and issue a report after the 90-day deadline would be that this report no longer qualifies as an Appellate Body report for purposes of the exceptional negative consensus adoption procedure,” Shea said, according to a copy of his remarks provided to Reuters.
An official who attended the meeting said other WTO members agreed that the Appellate Body should stick to the rules, but none supported Shea’s view that late rulings could be vetoed, and many expressed concern about his remarks.
Rulings are routinely late because, the WTO says, disputes are abundant and complex. Things have slowed further because Trump is blocking new judicial appointments, increasing the remaining judges’ already bulging workload.
At Friday’s meeting the United States maintained its opposition to the appointment of judges, effectively signalling a veto of one judge hoping for reappointment to the seven-seat bench in September.
Without him, the Appellate Body will only have three judges, the minimum required for every dispute, putting the system at severe risk of breakdown if any of the three judges cannot work on a case for legal or other reasons.
“Left unaddressed, these challenges can cripple, paralyze, or even extinguish the system,” chief judge Ujal Singh Bhatia said.
Sixty-six WTO member states are backing a petition that asks the United States to allow appointments to go ahead. On Friday, US ally Japan endorsed the petition for the first time, meaning that all the major users of the dispute system were united in opposition to Trump.