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Iraq is pumping oil at record pace despite chaos

By on 8 Jun 2016 in news, notable posts

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(Hellenic Shipping News) Iraq is pumping more oil than ever before, even as ISIS-fueled chaos grips parts of the Middle Eastern country.

Iraq, which relies on oil to fund nearly its entire government, increased daily oil production to an all-time high of 4.5 million barrels in May, according to estimates from research firm JBC Energy.

That’s up by 100,000 barrels a day from April and helps fill the void left by big outages in Nigeriaand Canada. It’s also about 2 million barrels a day more than what Iraq was pumping before the 2003 U.S. invasion.

“Iraq has been quite successful at ramping up production, despite all of the political and security issues going on,” said Julius Walker, senior consultant at JBC Energy.

Much of that oil is flowing into the U.S. Iraqi oil imports to the U.S. have tripled since January and now stand at the highest level since July 2014, according to ClipperData. The milestones comes even as tales of horror emerge from Falluja, the ISIS stronghold located in the center of Iraq away from key oil facilities. The United Nations estimates as many as 50,000 residents are caught in the crossfire in Falluja as the U.S.-backed Iraqi military attempts to oust the terror group. Reports indicate children in Falluja have been killed by bombs, people are forced to eat garbage to stay alive and ISIS is shooting civilians who try to flee.

In recent weeks, the political crisis and security situation in Iraq has worsened.

“With the potential for political temperatures to rise this summer, the government has already reinforced security around southern oil facilities,” Helima Croft, head of commodity strategy at RBC Capital Markets, wrote in a recent report.

Of course, the Iraqi military’s advance on Falluja wouldn’t be possible without oil revenue, whichaccording to the IMF made up 94% of Iraq’s 2014 federal revenue. These days, oil makes up 99% of Iraq’s exports and about 90% of all federal revenue, according to the Brookings Institute.

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