Export Stoppage Highlights Iraq’s Gulf Infrastructure Vulnerabilities

23 Sep 2022 Issue: 65 / 38 By: Yesar Al-Maleki

Iraq’s failure to upgrade its key southern oil export facilities has left its oil sector vulnerable to the risk of major shut-ins. A pipeline leak earlier this month temporarily closed a key export terminal, and a longer-term closure would cripple Iraq’s exports. Baghdad’s caretaker government is unable to award key contracts to ease the strain.

A stoppage at Iraq’s 1.8mn b/d offshore Basra Oil Terminal (BOT) on 15 September temporarily knocked off as much as 1mn b/d crucial capacity from the country's key Gulf terminals. Despite its 1.8mn b/d nameplate, BOT exports have been much lower due to infrastructure constraints. The incident brought into full perspective the dilapidated nature of Iraq’s ageing export infrastructure, where capacity has actually dropped in recent years despite officials pledging expansion.

This has hampered Iraq’s efforts to increase crude oil production in line with the easing of Opec+ restrictions. Even with Iraq burning record amounts of fuel oil in its power plants this summer, output has still lagged targets because of insufficient export outlets (MEES, 19 August). (CONTINUED - 1867 WORDS)