Blasts halt Iraq oil exports to Turkey

Kirkuk — Militants yesterday bombed a major pipeline carrying oil from northern Iraq to Turkey, stopping exports, a senior official from the North Oil Company official said.The blast occurred near the town of Albu Jahash in Nineveh province, the official said, adding that production is still continuing, but the oil is being stored instead of exported.

Repairing the pipeline is expected to take between one and three days, the official said.
The 970-kilometre pipeline runs from Iraq’s northern oil hub of Kirkuk to the port of Ceyhan on Turkey’s Mediterranean coast.

There have been dozens of attacks on the pipeline so far this year, disrupting northern exports.
Oil ministry spokesperson Assem Jihad said earlier this month that Iraq intends to build a new pipeline from Kirkuk to the Turkish border, because the existing one has been repeatedly attacked and to increase Iraq’s export capacity.

Iraq is dependent on oil exports for the lion’s share of its government income, and is seeking to dramatically ramp up its sales in the coming years to fund the reconstruction of its battered infrastructure.

Meanwhile, Brent crude oil rose above $109 per barrel yesterday after oil exports from Libya fell to their lowest for two years, heightening supply worries ahead of scheduled cuts in output from fellow OPEC member Iraq.

Striking security guards shut Libya’s two biggest crude export terminals on Monday, hours after they had reopened, and more oilfields have closed in a wave of protest that has swept the North African oil producer.

Libya’s deputy oil minister said exports could resume as early as tomorrow after workers and local authorities reached an agreement to end the strike.

But markets worried supplies could be insufficient to meet demand due to restocking before the northern hemisphere winter.
“Supply issues are keeping the market on edge,” said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.

Brent crude oil futures for September rose 50 cents to $109.47 per barrel by 10:00, while US light crude oil  was up 50 cents to $106.61.
Brent touched a low of $107.43 a barrel on Monday, but rose back above its 200-day moving average at $108.16, a technical marker watched by traders.

“The volatile geopolitical climate in the (Middle East) region is going to keep prices supported as we go out into the fourth-quarter,” said Carl Larry, president of Houston-based consultancy Oil Outlooks and Opinions.

Libyan oil output has fallen to its lowest since the overthrow of Muammar Gaddafi with the country’s total oil production well below 500 000 barrels per day (bpd), down from 1,3 million bpd in June, industry analysts say.

“We think Libyan production is down around 0.4 million bpd,” Richard Mallinson, chief policy analyst at London-based consultancy Energy Aspects, told Reuters Global Oil Forum. “Exports would be even lower at around 0.3 million bpd.”

Higher oil prices are already taking their toll on oil refiners in Europe, who are expected to cut their processing rates by around 500 000 bpd this week on poor profit margins. —AFP-Reuters.

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