Iraq slashes Kirkuk crude oil exports in Sept
London, August 26, 2013
Iraq has cut Kirkuk crude oil shipments by more than half in the September programme as loadings run a month behind, due mostly to leaks and attacks on the export pipeline, according to the preliminary programme and trading sources.
State marketer Somo cut the programme to around 110,000 barrels per day (bpd), a multi-year low, from around 244,000 bpd in August, deciding not to allocate most cargoes requested by refiners, the programme showed on Monday.
"There are at least 10 cargoes still to load from the August programme," one of the trading sources at a refiner that was among many that sought cargoes. "But Somo did not allocate."
Somo's decision shows the severity of the disruption to Kirkuk exports, which reach the Mediterranean market via the pipeline, which links Iraq's Kirkuk to the Turkish port of Ceyhan.
A severe leakage around June 21 on the pipeline forced Somo to halt exports for nearly a month. Its subsequent restart around mid-July was short-lived after it was consistently attacked by militants.
The programme shows that Tupras, Turkey's sole refiner, will take all the crude in September, except for one 600,000 barrel cargo for Exxon.
Normally each month, a range of refiners each seek a cargo of Kirkuk crude including Lukoil, Total, BP, Cepsa and Italian buyers such as Iplom and Api.
Turkish officials last week asked Iraq to take serious steps to protect the pipeline after it was bombed for at least the sixth time in a month last week.
A shipping source said loading delays have reached around 1 month.
Somo normally allocates cargoes even during disruptions, including this time last year, when a dispute with the autonomous Kurdish Regional Government led to similar loading delays.
But the move is not surprising, traders said.
"Since July cargoes are loading in August and August in September, they have chosen to make a vacuum in September, so they can catch up," a second source said.
Traders expect Somo to cover any demurrage costs paid to ship owners when vessels are delayed, and the bill is mounting as tankers wait for long periods.
"They preferred to catch up instead of being always late and paying a fortune in demurrage," the first source said. – Reuters