Iraqi oil production may reach 1 mbd in June - PIW

Following the meeting of the UN Security Council, the coalition forces in Iraq are now in control of Iraq’s oil revenues and reconstruction, relegating the UN to the role of an observer. However, Iraq cannot yet process enough oil to meet its own needs, let alone resume exports. The UN resolution adopted on 22 May removed the political obstacles to the restart of oil sales, lifting most sanctions and allowing the free traffic of goods, people and capital.

 

Traders are keen to start buying Iraqi crude, but practical obstacles – including no telecommunications, power cuts, a lack of storage, and damaged oil infrastructure – stand in the way of an early resumption. The current Iraqi oil output is estimated at 0.25 mbd although some US officials claim it reached 0.35 mbd last week. Two months after the war started production of about 1 mbd is possible, according to Iraqi officials, but this will not be realised until a backlog of unwanted fuel oil is cleared to free up brimming refinery storage. Battered refineries at Basrah, Daura and Baiji, with a nominal combined capacity of 0.56 mbd, are running at less than half that rate.