- Winter loading problems cut oil production in past years
- Oil output seen falling below oil ministry target for 2020
Iraq’s oil production is at risk for winter when “loading problems” have historically reduced output by 300,000 to 500,000 barrels of crude a day, Barclays Plc said.
Loading facilities and the nation’s single-point mooring systems are “insufficient for the winter season,” Michael Cohen, a Barclays analyst in New York, said in a Sept. 25 report. It wasn’t clear from the report what causes the disruptions during winter.
Shipments from Basra in the south are sometimes slowed by strong winds during the first part of the year. In April, a four-mile (6.4-kilometer) line of supertankers was waiting to load the nation’s crude.
OPEC’s second-largest crude producer has increased output this year as supplies from the south expanded even as Islamic State fighters occupied parts of the north. Iraq needs to keep increasing production because lower oil prices have curbed government revenue.
Crude output will increase by about 500,000 barrels a day to reach 4.5 million barrels a day by 2020, or 1.5 million barrels below the oil ministry’s target of 6 million barrels, according to Barclays. Production was 4.3 million barrels a day in August, the most in the Organization of Petroleum Exporting Countries after Saudi Arabia, according to data compiled by Bloomberg.
Iraqi oil exports will rise to 3.7 million barrels a day in 2016 from 3.5 million this year, Barclays said. Shipments were 3.19 million barrels in June, a fourth consecutive monthly record, according to the International Energy Agency.