Iraq boosted crude shipments in March to the highest level in more than three decades, adding to a global supply glut that has helped push down oil prices by 46 percent in the last year.
OPEC’s second-largest producer shipped 92.4 million barrels in March, or 2.98 million barrels a day, Oil Ministry spokesman Asim Jihad said by phone from Baghdad. Iraqi exports gained 15 percent from February, when foul weather at the country’s southern oil terminals limited shipments to 2.59 million barrels a day, according to the Oil Ministry.
“The ministry has made extraordinary efforts to boost crude oil exports to compensate for the delays in loading of tankers due to bad weather,” Jihad said in a statement earlier Wednesday.
Iraq’s monthly shipments rebounded amid an oversupply fed partly by the U.S. shale boom and increased output from Russia. U.S. crude inventories expanded in the week ended March 27 to the most since at least August 1982, the Energy Information Administration reported Wednesday. West Texas Intermediate crude is down almost 7 percent this year. North Sea Brent has lost 51 percent from its 12-month peak and was trading at $56.73 a barrel at 7:21 a.m. Thursday in London.
Iraq, with the world’s fifth-biggest oil reserves, is rebuilding its energy industry after decades of war, economic sanctions and mismanagement. The government is also burdened by an armed conflict with Islamist militants who seized major cities and have controlled much of the country since June.
Iraq pumped 3.3 million barrels a day on average last year, the most since 1979, according to data compiled by Bloomberg. Among the 12 members of the Organization of Petroleum Exporting Countries, only Saudi Arabia produces more. Iraq is targeting output of 6 million barrels a day in 2018.
The Middle Eastern nation’s shipments in March grew even as the $4.46 billion in oil revenue it generated last month was barely half of the $8.08 billion it earned in May, the peak for monthly sales in 2014. Iraq sold crude at an average price of $48.24 in March, according to Jihad.
The government started selling $12 billion in treasury bonds last week to repay oil companies, Muneer Mohammed Omran, director general of the central bank’s investment department, said by phone Wednesday. The drop in oil prices has led to a decrease in revenue, affecting payments to the companies, he said. Iraq owes international oil companies $9 billion for 2014, Oil Minister Adel Abdul Mahdi said March 2.
The country shipped 84.08 million barrels last month from the southern Basra region and 8.3 million barrels from the northern oil hub of Kirkuk, Jihad said. While the Basra area has been largely unaffected by Iraq’s conflict with Islamic State fighters, troops from Iraq’s self-governing Kurdish region took control of oil fields around Kirkuk to prevent their capture by the militants.
Iraq is installing two new export facilities offshore in the Persian Gulf and is expanding storage capacity to 15 million barrels by the end of this year to overcome bottlenecks curbing output, Deputy Oil Minister Fayyad Al-Nima said in a Feb. 20 interview. Rough weather in the Gulf was halting the the loading of crude on to tankers, he said.