Iraq's Oil Exports to Resume with UN Resolution

Following a three-week hiatus, Iraq is poised to resume its oil exports, backed by a new UN comprehensive resolution. The UK-sponsored resolution, nearing adoption, would give Iraq the green light to boost exports and output, whether or not the country allows arms inspectors back on the ground. The resolution includes humanitarian provisions that would remove Iraq's export ceiling of $5.26 billion and allow the use of additional export routes, such as the Syrian pipeline. Iraq is also expected to receive higher spare parts allocations and potentially benefit from foreign investments in its oil sector.

Key Takeaways:

• The new UN resolution would remove Iraq's export ceiling of $5.26 billion, immediately allowing the country to boost its oil exports.
• The resolution would transfer the task of approving spare parts contracts from the sanctions committee to a group of experts appointed by the Security Council, streamlining the process.
• Iraq is poised to win higher spare parts allocations if the secretary-general advises the Security Council within 60 days of the resolution's adoption.
• The resolution outlines the possibility of allowing foreign investments in Iraq's oil upstream sector.
• The Security Council requests the secretary-general to appoint a group of experts, including oil experts, to make recommendations on increasing Iraq's oil production and export capacity.
• Somo, the Iraqi state marketer, has signed new contracts worth 85.9 million barrels of oil, with 18 companies, including Russia and France.
• Russia accounts for 40% of the total volumes, while France accounts for 19%.
• Moscow has applied to license three new companies, Zarnestservice, Zao Vto Rosneftegasexport, and Jscorel-oil, as Iraqi oil lifters.

Statistics:

• 85.9 million barrels of Iraqi oil sales cleared or awaiting UN review, representing a daily average of 475,000 barrels over 180 days
• 10.5 million barrels of oil contracted but awaiting UN review, bringing the total commitment to 535,000 barrels per day
• 18 companies, including Russia and France, have signed contracts worth 85.9 million barrels
• 40% of total volumes attributed to Russia, 19% attributed to France
• 3 new companies, Zarnestservice, Zao Vto Rosneftegasexport, and Jscorel-oil, applied for licensure as Iraqi oil lifters

Sources:

• Oil's latest developments in Iraq, as of Friday morning
• Somo's quick action in signing new contracts following the Dec. 10 rollover of the oil-for-food plan