Iraq has completed repairs on the 70,000 b/d Salahuddin-1 unit, the second such rehabilitated unit at the all-important Baiji refinery in northern Iraq. Key to supplying northern provinces and Mosul with oil products, Iraq’s oil ministry completed work on the Salahuddin-2 unit last year (MEES, 14 September 2018). Now only the 170,000 b/d (and more modern) Baiji North refinery remains offline, which because some of its parts were cannibalized to repair the other two units, will likely remain offline for some time.
Iraq lacks the refining capacity to cover domestic demand. This means Opec’s no. 2 producer is forced to import diesel and gasoline: an annual bill of $2.5bn at current oil prices (MEES, 3 May). Shortages are particularly bad in Islamic State-ravaged areas of northern Iraq, and whilst the Salahuddin units will help provide relief, the patchwork nature of their rehabilitation means fuel oil yields (rather than more valuable transport fuels) will be extremely high and refining runs are unlikely to operate anywhere near full capacity (MEES, 1 February). (CONTINUED - 167 WORDS)