Seaborne Iraqi fuel oil exports have soared this year thanks to the addition of new refining capacity. However, hidden among the increased volumes are a number of illegitimate cargoes which are increasingly drawing the attention of US politicians. Allocations of subsidized fuel oil to local industry are finding their way to regional trading hubs despite a recent government crackdown, while there are increasing signs of disguised Iranian volumes being part of the mix.

Iraqi fuel oil production rose to an all-time high of 445,000 b/d in February thanks to refining capacity being brought above 1mn b/d, with a record 209,000 b/d exported the following month according to official oil ministry figures. The latest data from state marketer Somo show fuel oil exports dipping to average 155,000 b/d for Q2, as rising temperatures in early summer pushed up domestic demand for power generation. (CONTINUED - 1879 WORDS)