Can Iraqi oil production surprise again on the upside?

Iraqi oil production outperformed expectations in 2015, after numerous years of disappointing growth. Iraqi production, including output from the semi-autonomous Kurdish region, rose by 0.62 mb/d to above 3.9 mb/d in 2015, the fastest growth since 2004 when Iraq’s oil sector was recovering after the US invasion. The growth was even more impressive at points during 2015 – up by almost 1 mb/d year-on-year across July and August 2015. Production controlled by the Kurdistan Regional Government (KRG) also grew strongly in 2015, as independent exports via the Kurdish-controlled pipeline to Turkey ramped up, compensating for the permanent closure of the older Kirkuk–Ceyhan pipeline. Given that Iraq was one of the main contributors to oil output growth in 2015, the dynamics within the Iraqi oil sector are key to understanding the global oil market rebalancing process. This comment argues that even though the impressive run of growth has continued into 2016, the prospects are far less positive as we head into 2017, as decline rates will assert themselves amid lower levels of investment and upstream activity. In the medium term, political instability, severe fiscal pressures, and serious delays in key infrastructure projects will constrain Iraq’s output growth.

By: Richard Mallinson

Latest Tweets from @OxfordEnergy

  • New OIES study assesses effectiveness of OPEC’s Declaration of Cooperation with non-OPEC producers: DOC accelerated… https://t.co/mLWRpKlPey

    September 22nd

  • OIES's @thierry_bros interviewed by @yannicrab on the consequences of Brexit on gas interconnectors - https://t.co/MNMHVklNXV

    September 21st

  • 5+1 Key Facts about the OPEC Declaration of Cooperation https://t.co/aEffVT7iHp

    September 21st

Sign up for our Newsletter

Register your email address here and we will send you notification of new publications, comment, articles etc. automatically.