Iraq is experiencing delays in upgrading its oil export facilities in Basra, which are also delaying the expected increase in the OPEC’s second oil producer’s export capacity, it said on Wednesday in Reuters an oil source in Iraq.
Iraq plans to increase crude oil export capacity to its Gulf ports to 3.45 million barrels per day (bpd) from 3.3 million bpd.
However, Iraq has experienced delays in recent weeks in the completion of tenders for the improvement of pumping stations at export terminals and in obtaining the necessary approvals for the work, a representative of the Iraqi oil industry told Reuters.
The delay in increasing the 150,000 bpd export capacity comes as the world faces the limitations of the physical supply of oil despite the downward sentiment currently in the oil market.
In June, Iraq’s oil exports averaged 3.37 million bpd, according to the Iraqi Ministry of Oil quoted by Xinhua.
Delays in pumping station upgrades mean Iraqi state-owned Basra Oil Company (BOC) will not be able to increase exports to 3.45 million bpd in the coming weeks.
“I’m not sure if BOC can meet this deadline due to the delay in [pumping stations] project, “the Iraqi oil source told Reuters.
Related: China’s oil imports fell in June
Without the upgrade, Iraqi crude exports will remain at around 3.3 million bpd, the source said.
In terms of production, Iraq was 75,000 bpd below its target for June, according to OPEC secondary sources in its Monthly Oil Market Report (MOMR) released on Tuesday. The ten OPEC producers linked to the OPEC + pact pumped 24.8 million bpd of crude oil in June, which was 1 million bpd below target levels.
Although the increase in Iraq’s 150,000 bpd capacity is relatively small, any limitation on crude oil supply could further tighten the global oil market later this year, when the embargo on EU on maritime imports of Russian crude oil and refined products.
By Tsvetana Paraskova for Oilprice.com
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