S&P affirmed B-/B sovereign credit rating on Iraq with a stable outlook, revealing that the stable outlook reflects expectation that fiscal deficit will be modest over next years.
S&P expected economic growth prospects to be subdued owing to domestic political tensions, OPEC quotas and constraints on government spending.
S&P said that in line with 2017-2018 production cuts, Iraq’s real GDP to grow by 1.9 percent in 2018 before rising to 2.5 percent in 2019 as oil production recovers.
Iraq’s crude oil exports from its southern ports on the Gulf stand at 3.5 million barrels per day so far in February, two oil industry officials told Reuters on Thursday.
“Despite repeated bad weather issues this month we expect the monthly average to stay at or slightly below 3.5 million barrels per day,” one of the officials said.
Iraq’s total exports should be higher as the northern Iraqi Kurdistan region also exports about 200,000 bpd through a pipeline to the Turkish Mediterranean port of Ceyhan. Iraq is the second-largest producer of the Organization of the Petroleum Exporting Countries (OPEC), after Saudi Arabia.
The country is producing below its maximum capacity of nearly 5 million bpd under an agreement between OPEC and other exporters including Russia to curtail output in order to support oil prices.
Iraq plans to export oil to Iran from the northern Kirkuk oilfield using tanker trucks. Iraq and Iran agreed in December to swap up to 60,000 bpd of crude produced from Kirkuk for Iranian oil to be delivered to southern Iraq, with the crude trucked to Iran’s Kermanshah.
The transportation was to start in late January and oil industry officials declined to give reasons for the delay other than it was technical in nature. Later officials said it would start this month but so far it has not.
Iraqi forces launched a security operation along the planned oil transit route this month to clear the area from militants. Kirkuk crude sales have been halted since Iraqi forces took back control of the oilfields from the Kurds in October.
Kurdish forces took control of Kirkuk in 2014, when the Iraqi army collapsed in the face of ISIS.
The Kurdish move prevented the militants from seizing the region’s oilfields. Iraq and Iran are also planning to build a pipeline to carry oil from Kirkuk. The planned pipeline could replace the existing export route from Kirkuk via Turkey and the Mediterranean.
