A report published by the Economic Times revealed that the total oil exports from Iraq had decreased this month with just 2.92 million barrels per day. Production in southern Iraq slipped from its 2.71 million average in March to 2.5 million barrels per day in the first half of April, yet these numbers are still quite impressive in the face of a global oil crisis. Oil production might have been higher in the past, but OPEC’s second largest producer is faring well and still sustaining near record highs. The short-term outlook for oil is looking promising, and economists are now speculating a comeback for oil is in progress due to the latest developments in Iraq.
Iraq sources the majority of its oil from its largest field in Rumaila, where oil and gas services company UnaOil and Swiss engineering firm Sulzer opened their strategic base just last year. The base trains workers in the use of equipment at the base, which has made a huge impact on Rumaila production as it has strengthened the nation’s rally against the global oil crisis. Although exports decreased this month, Rumaila operations remain consistent with an output of around 1.4 million barrels per day. Given the daily production thus far, BP President Michael Townsend expects output to remain steady for the rest of the year.
But it’s not Iraq’s rally against the low crude oil prices that has experts believing that the fossil fuel is progressing towards a rebound. Rather, it’s the political unrest in the nation and throughout the Middle East, according to the Telegraph . In recent news, one of the crucial oil refineries located north of Tikrit was once again invaded by ISIL fighters. The government has regained control of the facility, but occurrences of these attacks are unpredictable. Conflict along with the low oil price has caused delays in due payments worth billions for international oil companies, so these firms have accepted payment through oil shipments.
Remember that it was over supply that started the oil crisis, and the continued turmoil in the area that accounts for one fifth of global production could threaten the supply. This could ultimately bring the value back to $100 per barrel.
(*) At a young age, Farrah’s family migrated to Vancouver, Canada, where she later studied economics and mathematics at the University of British Columbia. Currently residing in Boston, she is pursuing her masters in economics and working as a TA for one of the most well respected econ professors in Massachusetts.