Iraq will sell more crude oil to its biggest customer, China’s Unipec, just before production cuts agreed with OPEC and other producers are scheduled to kick in, Hellenic Shipping News reported.
Iraq’s Oil Marketing Company (SOMO) has boosted Basra crude forward export sales to Unipec by 3% percent to a total of 40m-60m barrels each quarter for 2017, around 435,000-652,000b/d, informed Iraqi News. According to a preliminary January loading schedule for the oil, SOMO will also supply Basra Heavy crude under new term contracts to ExxonMobil, Chevron, and Indian refiner Essar Oil for 2017.
These new contracts, together with the extended deal with the trading arm of Asia’s largest refiner Sinopec, will force Baghdad to reduce supply to other clients in order to honor its commitment to cut output by 210,000b/d starting 2017.
Iraq is OPEC’s second-biggest producer behind Saudi Arabia. Having recorded a 15% year-on-year jump to about 723,000b/d between January and October, Iraq now ranks third among crude suppliers to China, after Russia and Saudi Arabia. In India, crude imports from Iraq rose 24% in the first 10 months of 2016, to reach 784,000b/d, making Iraq the second-largest crude supplier after Saudi Arabia. While data from the Energy Information Administration showed that Iraqi crude exports to the US have more than doubled in the first nine months of 2016 from the same period in 2015, to reach nearly 350,000b/d as Venezuelan supplies declined.