Iraq crude sales slump in May, but revenues inch up

A worker walks at Rumaila oil field in Basra, Iraq. (Reuters/File)
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Updated 02 June 2020

Iraq crude sales slump in May, but revenues inch up

  • In May, Iraq sold 99.5 million barrels of crude oil at an average price of $21, earning $2.09 billion for the month

BAGHDAD: Iraq sold fewer than 100 million barrels of crude in May, its Oil Ministry announced Monday, but recovering prices saw it rake in more revenues than the previous month.

The OPEC cartel’s second-biggest crude producer has been left reeling by the recent worldwide crash in oil prices.

In May, Iraq sold 99.5 million barrels of crude oil at an average price of $21, earning $2.09 billion for the month.

In April, it had sold more barrels — 103.1 million — but the record-low average price of $13.80 per barrel earned it just $1.4 billion.

Experts had warned that even if prices recovered, buyers had been stocking up on inexpensive oil in recent months and would not need to buy as much crude as summer began. OPEC agreed in April to introduce production cuts in May and June to try to revive prices, and Iraq will have to cut around 1 million barrels a day for both months.

Low revenues have been catastrophic for Iraq, which relies on oil sales to fund more than 90 percent of its budget.

Each month, it needs about $4.5 billion to pay salaries, pensions, welfare handouts and other government expenses.

The government is the country’s biggest employer, with at least 4 million people on its payroll and another 4 million who receive pensions or social benefits.

As part of its efforts to slash expenses, the cabinet announced this week that it was exploring cuts to the gross incomes of senior-grade public employees.

It had already decided to borrow internally to cover salaries for the month of April, senior officials told AFP. 

They said the government was considering taking on more internal and external debt, printing currency, drawing down foreign reserves and requesting budget support from the International Monetary Fund and the World Bank.

Iraq had already asked the international oil companies which produce its oil to cut down on their expenses, which are reimbursed quarterly by the Iraqi government.


Conflict-hit Libya to restart oil operations but with low output

Updated 10 July 2020

Conflict-hit Libya to restart oil operations but with low output

  • There is significant damage to the reservoirs and infrastructure
  • A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker

TUNIS: Libya’s National Oil Corporation (NOC) lifted force majeure on all oil exports on Friday as a first tanker loaded at Es Sider after a half-year blockade by eastern forces, but said technical problems caused by the shutdown would keep output low.
“The increase in production will take a long time due to the significant damage to reservoirs and infrastructure caused by the illegal blockade imposed on January 17,” NOC said in a statement.
A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker, chartered by Vitol, which two sources at Es Sider port said had docked and started loading on Friday morning.
The blockade, which was imposed by forces in eastern Libya loyal to Khalifa Haftar’s Libyan National Army (LNA), has cost the country $6.5 billion in lost export revenue, NOC said.
“Our infrastructure has suffered lasting damage, and our focus now must be on maintenance and securing a budget for the work to be done,” NOC chairman Mustafa Sanalla said in the statement.
Control over Libya’s oil infrastructure, the richest prize for competing forces in the country, and access to revenues, has become an ever-more significant factor in the civil war.
The internationally recognized Government of National Accord, supported by Turkey, has recently pushed back the LNA, backed by the United Arab Emirates, Russia and Egypt, from the environs of Tripoli and pushed toward Sirte, near the main oil terminals.