oil industry

Repairs, protests halt a tenth of Iraqi oil output

Reuters
Repairs, protests halt a tenth of Iraqi oil output

OIL. Employees arrange oil barrels in Al-Dora refinery near Baghdad, Iraq, June 7, 2001.

Reuters

Iraq's 480,000 barrels per day of crude outages make up nearly 0.5% of global oil supply and come at a fragile time for oil markets

LONDON, United Kingdom – Iraq has halted over a tenth of its oil output due to maintenance and protests, in a further blow to the already tight global supply at a time of rising demand and soaring prices.

Iraq has temporarily shut down its southern 400,000-barrel-a-day West Qurna 2 oil field until March 2 to 10, two state oil officials with knowledge of the field’s operations said on Friday, February 25.

One official said the maintenance included work on new wells and the linking of new pipelines, and added that Iraq would make up for the shortfall in production. He spoke on condition of anonymity because he was not allowed to give statements to the media.

West Qurna 2 is operated by Russia’s Lukoil.

Iraq has also halted a further 80,000 barrels per day (bpd) of oil production and exports from its Nassiriya oil field due to worker safety concerns, Iraq’s state-owned Dhi Qar Oil Company said on Friday.

University graduates have engaged in violent protests in the southern Dhi Qar province in recent days to demand jobs.

Iraq’s 480,000 bpd of crude outages make up nearly 0.5% of global oil supply and come at a fragile time for oil markets.

Global benchmark Brent crude rose above $105 a barrel on Thursday, February 24, for the first time since 2014 on fears that sanctions on major crude exporter Russia could disrupt supply and add to current tightness.

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In addition, some members of the Organization of the Petroleum Exporting Countries (OPEC), in which Iraq is the second largest producer, have already struggled to pump more crude even as prices trade at a seven-year high.

The group and its allies, known as OPEC+, have been gradually unwinding record output cuts put in place in 2020.

OPEC+ is expected to decide at a meeting next week to stick to a planned 400,000-bpd output rise in April.

Iraq produced 4.25 million bpd of crude in January, down by 26,000 bpd from the previous month, according to an average of six secondary sources used by the OPEC secretariat.

The Iraq Oil Report, an industry magazine, earlier reported that the shutdown of West Qurna 2 would last until March 14. – Rappler.com