Business is booming for Iraq as its key oil export revenues set fresh record highs (MEES, 8 July), but there is a flip side of high oil prices for Opec’s second largest producer. Its overstretched refining sector is unable to meet demand, meaning Baghdad has to import gasoline and diesel. And those imports now come with a big price tag.

Refining crack spreads have surged to record levels this year, and the 1.514mn tons (around 12.4mn barrels, 130,000 b/d) of middle distillates and gasoline that Iraq imported in Q1 cost $1.54bn according to state oil marketer Somo. As such the Q1 bill was almost half of that for the whole of 2021, when Iraq paid $3.3bn for 4.71mn tons (104,000 b/d) of products imports. The bad news for Iraq is that the spreads widened further in Q2, meaning that the bill will have risen further given that there was no sign of a drop off in import volumes. (CONTINUED - 1084 WORDS)