Page 14 - DMEA Week 29 2022

DMEA NEWS IN BRIEF DMEA

per day, Mohammed said. increasing or expanding our market share in b/d, with total exports increasing as it stepped
State-run Basra Oil Company told Reuters certain markets and having partnerships in up sales to Europe, based on Kpler data.
last year Exxon was seeking to sell its 32.7 some areas in the marketing system.” “Being the second [biggest exporter to
percent stake in the field for $350 million. Shatari declined to name the IOCs, but said India] instead of first does not mean those
OPEC’s second-largest oil producer can they include companies that already operate refiners are shifting their taste from Iraqi
increase its export capacity by 3 million in Iraq and some that do not currently. crude oil to Russia crude oil,” said Shatari,
barrels per day (bpd) if within two years Iraq “Most of the customers we are dealing who noted that Indian customers had not cut
upgrades its key undersea oil exports pipelines with are IOCs who own refining systems,” back volumes of Iraqi crude for June, July or
and its two onshore ports, Mohammed said. said Shatari. “Some of them own substantial August.
He also said a third oil pipeline at the Khor refining systems basically all over the world, Russia’s key export grade Urals has been
al-Amaya oil terminal in southern Iraq and so of course those are the final destinations trading at significant discounts to other crudes
a fifth single point mooring (spm) will be for our crude oil and any seller should really since the country invaded Ukraine on Feb. 24.
operational with capacity of 1 million barrels cooperate with potential big purchasers.” Platts assessed Urals at $69.885/b and Dated
per day by the end of 2024. Discussions with IOCs were focused on Brent at $110.62/b on July 21, S&P Global
Iraq’s exports 3.3 million barrels per day. marketing of spot cargoes, which have been data showed. Urals was assessed at $90.72/b
China Petroleum Engineering & Construction “weak” in recent months and “even for term- and Dated Brent at $100.49/b the day before
Corp (CPECC) has won a $300 million lifters,” he added. Russia invaded Ukraine.
contract to build an energy station at giant Iraq, which traditionally sells most of its “Strategy-wise, I do not think Russian
Rumaila oilfield in Iraq, he added. crude in Asia, is facing strong competition crude will stay cheap for long,” said Shatari.
REUTERS from cheap Russian crude as trade patterns “I don’t think it will be at the same discount,
shift in the wake of the Ukraine crisis. unless there is a big thing that will hit the
Iraq’s oil marketer SOMO crude amid sanctions on Moscow, and with a environment we are living in nowadays, but
European buyers’ reluctance to buy Russian economy and market, with the inflation
eyeing IOC partnerships to complete EU-mandated phaseout by the end this will hit all crudes not only Russian crude.”
of this year, have forced Russian sellers to seek
For now, Iraq also seems to be losing
boost market share new markets in Asia, traditionally the turf of some ground in China, the world’s biggest oil
importer.
Middle Eastern grades such as Iraq’s Basrah
Iraq’s state oil marketer SOMO is in talks Medium and Basrah Heavy. Until March, Iraq was the second biggest
with several international oil companies to India and China, two top buyers of Iraqi supplier of crude to the country this year after
help market Iraqi grades and boost their oil, have both stepped up purchases of Russian Saudi Arabia, but Russia has since risen to
share in various markets, its deputy director crude, which has been available at substantial second place, based on Kpler data.
general said July 21, as OPEC’s second biggest discounts for much of this year. “All these challenges, I would not say it is
producer seeks new European customers and Since 2017, Iraq had been the top supplier easy to deal with,” said Shatari. “These days
tries to defend its position in Asia. of crude to India but in June it was overtaken and in the coming months we are having a
“We have a number of studies and by Russia, which exported some 1.124 million number of meetings exploring new ideas and
negotiations are on with a number of b/d to India, compared with Iraq’s 1.011 putting new plans forward for our customers
IOCs... to explore the best ways and means million b/d, according to Kpler data. to satisfy their needs and for us to get the best
to purchase and market Iraqi crude oil,” The trend has continued into July, with value of our crude oil exported to different
SOMO’s deputy director general Ali al-Shatari latest data showing Russia ahead of Iraq in the markets.”
told S&P Global Commodity Insights in an Indian market. S&P PLATTS
interview. Nonetheless, Iraq maintained its overall oil
“That’s what we do as SOMO. I would say supply to Asia steady in June at 2.205 million

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