Iraq Boosts Kirkuk Oil Exports, Expands Marketing Channels
The Iraq National Oil Marketing Company (SOMO) announced on Tuesday a significant increase in Kirkuk oil exports, reaching 7 million barrels per month, up from 4 million barrels. The company also confirmed that oil exports via the southern outlet reached 444,000 barrels per day during the Strait of Hormuz crisis. Ali Nizar, SOMO's Director General, stated to the official agency that the company, as the commercial arm of the Ministry of Oil, plays a vital role in crude oil export and diversifying sales channels and markets. Nizar indicated ongoing efforts to secure export outlets and enhance crude oil marketing capabilities despite regional challenges. He clarified that export outlets are the most crucial factor in marketing operations, affirming the Ministry's continuous efforts to expand these outlets to increase export capacity. He also noted that there is no surplus of unexportable crude oil, and export operations proceed according to needs and available circumstances. Nizar pointed to a gradual improvement in managing export operations and dealing with exceptional circumstances. He highlighted Iraq's success in marketing some petroleum products whose revenues surpassed pre-Strait of Hormuz crisis levels, including exports via Syria and Jordan, alongside sulfur, which had not been exported previously. Export rates through the southern outlet reached approximately 444,000 barrels per day recently. Although these figures are lower than previous levels, they represent a significant achievement given current conditions, especially compared to some regional countries that struggled to reach similar export levels. The Director General added that efforts are underway to increase export volumes via the north, including crude oil transport through pipelines and tankers. Kirkuk oil quantities from the north have risen from approximately 4 million barrels to nearly 7 million barrels per month, with ongoing work to achieve higher levels. Nizar confirmed that the reopening of the Strait of Hormuz would allow contact with all contracted firms for crude oil loading, emphasizing the necessity for tanker-owning companies to be ready and meet international requirements, particularly approvals from concerned countries. He noted that tanker shipping operations typically take between 20 to 25 days before reaching markets, with faster transit possible under normal circumstances. He anticipated improved conditions with the return of insurance companies to cover tankers in the Gulf region, which will contribute to reducing the price discounts previously imposed to cover transport and insurance costs. Nizar reiterated that SOMO's policy is based on openness to all global markets, avoiding reliance on a single market, explaining that market diversification was a key factor in overcoming crisis challenges. He pointed to the company's benefit from new markets like Syria and Baniyas. He also alluded to an agreement with Syria, following cabinet approval, potentially paving the way for establishing a crude oil export pipeline through this route once Syria responds to the sent messages. He further explained that SOMO's tasks extend beyond exports, encompassing a broad commercial role requiring the development of logistical tools. These tools include owning Iraqi oil tankers and external storage facilities in key markets, a strategic plan that has been in place since 2010. He concluded that developing commercial infrastructure necessitates expansion into Asian markets such as China, Korea, and Singapore, in addition to strengthening presence in European and American markets. This expansion will enable the use of actual shipping tools and diverse commercial deals, including spot market operations and contracts, noting that the company possesses the necessary competencies to achieve these strategic directions.
