Iraq increases oil exports, pumps above OPEC+ target

Iraq has told OPEC+ it will make up for over-production in May and June through larger cuts in later months. (AFP)
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Updated 31 July 2020

Iraq increases oil exports, pumps above OPEC+ target

  • Industry figures for July show second-biggest producer still failing to fulfill pledges on production cuts

LONDON: Iraq’s crude oil exports have increased so far in July, shipping data showed and industry sources said, suggesting OPEC’s second-largest producer is still undershooting its production cut target under an OPEC-led deal.

Exports from Basra and other southern Iraq terminals to July 29 averaged 2.75 million barrels per day (bpd), based on figures from Refinitiv Eikon and an industry source. That is up 50,000 bpd from June’s official figure for southern Iraq exports.
“No massive change, Basra is still 2.7-2.8 million bpd,” the industry source said, referring to the change in exports seen since the first 20 days of July.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, began a record supply cut in May to bolster oil prices hammered by the coronavirus crisis. Iraq is cutting output by 1.06 million bpd under the deal.

HIGHLIGHTS

● Southern Iraq exports so far in July average 2.75 million barrels per day.

● OPEC-led oil supply cut deal started in May.

● Iraq, others, under pressure to boost compliance.

The July figures imply Iraq is still some way from fulfilling its pledges and is exporting far more than a July loading program indicated.
Iraq says it is committed to the OPEC+ agreement and will boost compliance. Iraq had told OPEC+ it would make up for over-production in May and June through larger cuts in later months.
The south is the main outlet for Iraq’s crude, so a good part of its OPEC+ cut should show up in lower exports.
Baghdad was reluctant to join previous OPEC-led supply cut efforts that began in 2017. Iraq has said it is in the country’s interest to comply with the current deal.
However, exports from northern Iraq have increased in July, tanker data showed and the industry source said. So far, northern exports are at least 400,000 bpd, which would be up from 370,000 bpd in June. The boost in northern shipments means Iraq’s exports are up by 80,000 bpd in July.


Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

Updated 8 min 15 sec ago

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

  • Aramco see’s “partial recovery” from pandemic impact
  • Aramco president says company remains resilient

DUBAI: Saudi Aramco, the world’s biggest oil company, reported a net income of $6.57bn for the second quarter of 2020, the period which witnessed the most volatile oil market conditions for many decades.

The result, announced to the Tadawul stock exchange in Riyadh where the shares are listed, compared with income of $24.7 bn last year.

Amin Nasser, president and chief executive, said: “Despite COVID-19 bringing the world to a standstill, Aramco kept going. We have proven our financial resilience and operational reliability, setting a record in our business operations, while at the same time taking steps to ensure the health and safety of our people.”

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Aramco’s dividend - a big attraction for the investors who bought into the world’s biggest initial public offering last year - will remain as pledged, Nasser added. Cash flow in the quarter amounted to $6.106 bn.

““Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results. Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce, and unrivalled financial and operational strength. This helped us deliver on our plan to maintain a second quarter dividend of $18.75 billion to be paid in the third quarter,” he said.

Aramco said the loss was “mainly reflecting the impact of lower crude oil prices and declining refining and chemicals margins, partly offset by a decrease in production royalties resulting from lower crude oil prices and a decrease in the royalty rate from 20 per cent to 15 per cent, lower income taxes and zakat as a result of lower earnings, and higher other income related to sales for gas products.”

Sales and revenue in the period - which saw oil prices collapse on “Black Monday” in April - fell 57 per cent to $32.861 bn from the comparable period last year. 

Nasser said he was cautiously optimistic that the world economy was slowly recovering from the depths of the pandemic lockdowns.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies. Meanwhile, we continue to place people’s safety first and have adapted to the new normal, implementing wide-ranging precautions to limit the spread of COVID-19 wherever we operate.

“We are determined to emerge from the pandemic stronger and will continue making progress on our long-term strategic journey, through ongoing investments in our business – which has one of the lowest upstream carbon footprints in the world,” he added.

Aramco expects capital expenditure to be at the lower end of the $25bn to $30bn range it has already indicated for this year.