To overcome bottlenecks of curbing output, Iraq boosts its crude storage

Deputy oil minister, Fayyad Al-Nima said that Iraq expanded its crude-storage capacity to 10.5 million barrels as OPEC’s second-largest producer tries to overcome export bottlenecks in the south that are curbing output.
The Middle Eastern country added three new tanks with combined storage capacity of 1 million barrels of crude oil, Al-Nima said in a phone interview Thursday. The nation plans to boost capacity to 15 million barrels by the end of the year and to 30 million barrels in five years, he said.
“Our storage capacity is low compared to our output,” Al-Nima said. “When there is rough weather for about five days, the tanks become full and we then have a problem.”
Iraq, which pumps the most oil in the Organization of Petroleum Exporting Countries after Saudi Arabia, is rebuilding its energy industry after decades of wars and sanctions. The nation produced 3.3 million barrels a day on average last year, the highest since 1979, according to data compiled by Bloomberg. It exported about half that amount from southern Iraq so far this month as bad weather disrupted shipments, according to ship tracking data.
Bad weather in the Persian Gulf halted loading onto tankers at the Basra Oil Terminal for three to four days since December, Al-Nima said. Works are under way to install two new offshore-export facilities each with a capacity of 850,000 barrels a day by the end of the year, he said. Iraq currently operates two export facilities of this type.
The nation has loaded just 1.7 million barrels a day of crude oil from the Basra terminal in the Persian Gulf so far this month, about half the scheduled amount, according to ship-tracking data compiled by Bloomberg and port agent reports. That is the lowest rate in three years, official data show.
Iraq may have to shut down some crude production if weather-related disruptions do not end soon, Vienna-based consultant JBC Energy said in a report Feb. 17.
Iraq produced 3.042 million barrels a day in January, compared with 3.356 million barrels in December, according to the state-run Oil Marketing Co., known as SOMO. It exported 2.535 million barrels last month, down from 2.94 million barrels in December, SOMO said.
Iraq’s crude-production capacity has reached 3.5 million barrels a day, Al-Nima said.