Iraq’s southern oil exports rise to near record in November

Above, flames emerge from flare stacks at the oil fields in Kirkuk. The drop in Kirkuk output helped to boost Iraqi and overall compliance with the deal. (Reuters)
Updated 20 November 2017
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Iraq’s southern oil exports rise to near record in November

LONDON: Oil exports from southern Iraq have risen by 150,000 barrels per day (bpd) this month to close to a record high, according to shipping data and an industry source, as OPEC’s second-largest producer seeks to offset a shortfall from the north.
Southern Iraqi exports in the first 20 days of November averaged about 3.50 million bpd, up 150,000 bpd from October, according to shipping data tracked by Reuters and independent tracking by an industry source.
The increase follows a decline in output in northern Iraq since mid-October, when Iraqi forces took back control of fields from Kurdish fighters. Iraq has said southern exports would rise to make up the shortfall, although some in the industry were skeptical this would be possible.
“It seems they managed to get there,” the industry source who tracks Iraq’s exports said.
The rise brings southern exports within a whisker of the record high of 3.51 million bpd seen in December 2016, the last month before an output cut agreement led by the Organization of the Petroleum Exporting Countries took effect.
The increase this month, though, has not entirely offset the drop in shipments from the north.
Northern exports have averaged about 250,000 bpd so far in November, according to shipping data and the industry source, down from an estimated 450,000 bpd in October and levels of more than 500,000 bpd in earlier months this year.
The drop in supplies from Iraq comes as OPEC, Russia and other producers are cutting output by about 1.8 million bpd until March 2018 in an effort to get rid of a glut and support prices.
Iraq has adhered less to the supply deal with non-OPEC producers than OPEC peers such as Saudi Arabia and Kuwait, but the drop in Kirkuk output helped to boost Iraqi and overall compliance with the deal.
The bulk of Iraq’s oil is exported via the southern terminals. Smaller amounts are shipped from the Kirkuk fields in northern Iraq via Ceyhan in Turkey.


War-ridden Yemen’s other frontline — the central bank

Updated 18 December 2018
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War-ridden Yemen’s other frontline — the central bank

  • The Arab world’s poorest country is crippled by a humanitarian crisis
  • Many have died as a result of poverty, starvation, poor health care as the central bank is caught up in the conflict

ADEN: Cashiers sort through large stacks of money inside a ragged building that is Yemen’s central bank, another frontline in a ruinous conflict as it fights to stave off economic collapse.
The Arab world’s poorest country is crippled by a humanitarian crisis, with images of skeletal children in famine-like conditions grabbing global attention, but economic dysfunction appears to be at the heart of the problem.
Yemen is afflicted by what diplomats call a famine of jobs and salaries, with the central bank — headquartered in the government’s de facto capital Aden.
Running the economy from a building pocked with bullet holes in the southern port city, the bank is scrambling to revive a currency that has lost two-thirds of its value since 2015, exacerbating joblessness and leaving millions unable to afford basic food staples.
The central bank expects a $3 billion cash injection from Gulf donors Kuwait and the United Arab Emirates to prop up its sagging currency amid soaring inflation, its deputy chief Shokeib Hobeishy said in an interview last week, without giving a timeline.
The potential lifeline, if confirmed, would follow a $2.2 billion infusion by Saudi Arabia to the depleted reserves of a bank that appears ever more dependent on international handouts.


Hobeishy acknowledged that the bank was struggling to assert authority over its branches outside government control, including in Sanaa, which was seized by Iran-aligned Houthi militia in September 2014.
The government moved the bank’s headquarters from the capital in 2016 following suspicion that the Houthis were plundering its reserves to finance their war effort.
The relocation practically left the country with two parallel centers of fiscal policy dealing in one currency.
Yemen’s rivals reached a truce accord last week, but conspicuously absent was an agreement on economic cooperation as the Houthis rejected government calls for the Aden central bank to handle public sector salary payments on both sides, a diplomat who attended the talks told AFP.
The central bank is now “arguably the most dangerous frontline in the Yemen war,” said Wesam Qaid, executive director at Yemen’s Small and Micro Enterprise Promotion Service.
“The death toll as a result of bombings or land mines and military operations stands in the thousands,” Qaid told AFP.
“Many more have died as a result of poverty, starvation, poor health care as the central bank is caught up in the conflict.”


Yemen’s economy has contracted by 50 percent since the escalation of conflict in 2015 and inflation is projected at over 40 percent this year, according to the World Bank.
A weakened currency has diminished the purchasing power of millions and the private sector is haemorrhaging with businesses shutting down or making layoffs.
New Prime Minister Maeen Abdulmalik Saeed, appointed in October, said he was seeking to revive oil exports that once contributed about three-quarters of state revenue.
But such are the fears of insolvency that many Yemenis are afraid of putting their money in local banks.
“Banks often say: ‘We don’t have money. Come tomorrow, come next week’,” said a 54-year-old school employee in Aden.
Businesses also criticize the central bank over cumbersome processes to obtain letters of credit for vital imports — in a country that depends almost entirely on food from abroad.
In a letter sent in November to the prime minister and central bank chief, Aden’s chamber of commerce voiced concern that traders in areas outside government control were struggling to import essential goods. A central bank order requires payment in cash only.
The letter, seen by AFP, said the policy had caused a sharp decline in imports in those densely populated areas, making them prone to famine.
On the other side, businesses say the rebels are obstructing traders and banks in their areas from opening credit lines to Aden.
Central bank chief Mohammed Zemam said this month five Sanaa-based central bank employees had fled to Aden over safety fears and were immediately blacklisted by the Houthis.
“We are asking the Houthis to leave the banking sector alone,” he said in a separate interview in Riyadh.
“This is the only way to feed the people.”