Iraq’s oil exporters have never had it so good. Halfway through 2022, and federal exports have just set new monthly and quarterly revenue records and are on course to blow past the annual record. Indeed, the six-month total of $61.54bn is already larger than the full-year 2020 figure of $41.77bn. At this rate, year-to-date revenues should overhaul last year’s $75.63bn at some point in August.
That said, there are some storm clouds on the horizon. The most serious issue is the risk of a global recession hammering global demand and knocking down prices. This was potentially a contributory factor to a market sell-off that pushed Brent back down towards $100/B this week, although with the pricing curve still strongly backwardated the physical market still looks tight. A 5 July research note by Citi raised the prospect of a sizeable price slump, noting that “In a recession scenario, we would see oil prices falling to $65/B by year end and potentially to $45/B by end-2023, absent intervention by Opec+ and a decline in short-cycle oil investment.” (CONTINUED - 843 WORDS)