In Freight News 04/06/2015
Iraq’s oil exports, already running at record highs, may rise a further 100,000 barrels per day (bpd) this month thanks to the launch of a new Basra Heavy crude grade, oil minister Adel Abdel Mahdi said.
He said creating a new heavy oil stream has allowed Iraq to revive some fields that had been shut in to maintain the quality of its mainstay Basra Light grade, which had come under criticism from some buyers over varying quality specifications.
“I think exports will increase by an average of 100,000 barrels per day” in June, Abdel Mehdi said on the sidelines of an OPEC seminar in Vienna, citing the Basra Heavy launch.
Exports rose to a record 3.145 million bpd in May, with some 2.7 million bpd of that via the southern Basra terminals.
Iraq – which sells more than half of its oil to Asia – proposed last year to split its supply into two grades, creating a new Basra Heavy stream due to complaints over quality as new fields fed into Basra Light. First shipments are expected to commence in June.
Abdel Mehdi later told Reuters that the country’s state oil marketer SOMO had enough contracts in June to sell some 800,000 bpd of Basra Heavy and expects to maintain sales at around 800,000-850,000 bpd, the high end of previous estimates.
“This is a new experience, it has never happened in Iraq. We watch closely this operation, it’s important to maintain the quality of the light Basra too,” he said.
While refiners have generally applauded the separation of the two streams, the move has not been entirely smooth.
Sellers of the new grade have struggled to find buyers, with at least one Malaysian-based trader taking a deep discount to offload 2 million barrels. Others have complained about a lack of pre-marketing and slow delivery of technical details to refineries, market sources in Asia have said.
