Iraq has defied the odds to end-14 on a high note. Its oil exports hit a new record as Baghdad managed to circumvent the security challenges posed by the Islamic State (IS) incursion by diverting its northern crude through Kurdish territory, under a deal with Erbil that paves the way for higher exports in 2015. But the increase comes at a cost as revenues have slumped with Iraq and the Kurdistan Regional Government (KRG) putting oil into an oversupplied market as oil prices crashed to a new five year low, preventing the cash-strapped Iraqi government from enjoying the full benefit of its export surge.
Including Kurdish production, total Iraqi oil output for December rose to 3.72mn b/d, the highest level since 1979, according to MEES estimates. For 2014 as a whole, output of 3.32mn b/d is also close to record highs, and up from 3.1mn b/d for 2013. (CONTINUED - 1623 WORDS)