Disruptions in Iraq crude irk traders
BAGHDAD, Iraq – Repair crews worked frantically Monday to fix a key southern pipeline after a reported breach by smugglers cut Iraq’s exports by nearly half, officials in the state-run South Oil Co. said.
The disruption – coming about two weeks after exports were halted following sabotage attacks on the two export lines – heightened concern among traders and analysts about the security of Iraq’s oil flow at a time when global supplies are thin.
Oil revenues are critical to efforts by the new interim government to rebuild the country following decades of war and Saddam Hussein’s tyranny.
“This is extremely disruptive. … Sellers are more wary about committing tankers to lift Iraqi crude now,” said Conrad Gerber, president of PetroLogistics, Ltd., a Geneva-based firm that tracks tanker ships.
As a result of the attacks and the disruption in supplies, he said, “the market has subtracted Iraqi oil out of the equation … simply because of volatility in supply.”
The line under repair Monday had been sabotaged before, including an attack that shut it down only days before U.S. occupation authorities handed over power last week.
The current disruption began Saturday when the 42-inch pipe was broken open, reportedly by smugglers trying to steal oil, an oil company official said.