Iraqi oil exports to United States grow increasingly

Jan 22, 2003 01:00 AM

Under sanctions and an erratic leader, Iraq has hardly been a reliable global oil supplier. But in an odd twist, the United States has grown increasingly reliant on Iraqi oil exports to replace supplies cut off by a seven-week-old strike in Venezuela -- even as the Bush Administration steps up preparations for a possible invasion -- raising further concerns about the impact a US attack would have on the oil market.
"The United States gets several hundred thousand bpd of crude oil from Iraq," said John Lichtblau, chairman of PIRA Energy in New York. "That's not insignificant."

Unpublished, preliminary government data indicate exports of Iraqi oil to the United States have been rising in recent weeks. Since the December 2 start of the labour strike in Venezuela, Iraq's crude oil exports to the United States have averaged more than 500,000 bpd, nearly double the volume reported during the September-November period, the data show.
Iraqi oil exports to the United States jumped to 830,000 bpd,their highest level since early last year and nearly 10 % of total US imports that week, according to an Energy Department analyst. While Iraq's exports remain below levels seen in 2001 and early 2002, the recent surge, including the shipments to the United States, is making a difference, analysts said.

The surge in Iraqi shipments helped boost total crude oil imports into the United States by 200,000 bpd to 8. 5 mm bpd. "That's probably in reaction to the loss of Venezuela exports," said Aaron Brady, an analyst at Energy Security.
Iraqi oil exports have been unpredictable since the start of the United Nations oil-for-food programme six years ago. The programme allows Iraq to sell as much oil as it likes provided the revenue goes into a UN account and is used mostly for humanitarian purposes.

After topping 1 mm bpd in January and February of last year, Iraqi oil exports to the United States nose-dived. The decline came in response to the onerous conditions of a new UN pricing policy imposed to frustrate Baghdad's efforts to collect an illegal surcharge from traders.
Iraq compounded the problem by cutting off its exports in April in an ill-fated effort to spark a broad oil embargo in support of the Palestinians. For much of last year, Iraqi exports averaged less than 1 mm bpd, with less than half coming to the United States.

Faced with a sharp loss of revenue and US threats of military action, Iraq quietly dropped the surcharge demand in September. Some analysts saw the move as an attempt to build commercial ties as a bulwark against a US attack. Whatever the motive, the change prompted major international oil companies to return to the Iraqi market for the first time in nearly two years, according to industry analysts and UN diplomats.
The result has been a clear rise in Iraq's oil exports according to UN figures. Since the start of September, Iraqi exports have averaged about 1.5 mm bpd, the figures show.

Source: The Times of India
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