Iraq is experiencing delays in upgrading its oil export facilities at Basra, which also delay the planned increase in the oil export capacity of OPEC's second-largest producer, an oil source in Iraq told Reuters on Wednesday. Iraq plans to increase crude oil export capacity at its Gulf ports to 3.45 million barrels per day (bpd) from 3.3 million bpd. However, Iraq has seen in recent weeks delays in finalizing the tenders for the upgrade of pumping stations at the export terminals and in obtaining the approvals needed for the work, a representative from Iraq's oil industry told Reuters. The delay in the 150,000-bpd export capacity boost comes as the world grapples with constraints in physical oil supplies despite the currently bearish sentiment on the oil market. In June, Iraq's oil exports averaged 3.37 million bpd, per the Iraqi Oil Ministry cited by Xinhua. The delays in the pump station upgrades mean that Iraqi state-owned Basra Oil Company (BOC) will not be able to raise exports to 3.45 million bpd in the coming weeks. "I'm not sure if BOC can meet this deadline due to the delay in the [pumping stations] project," the Iraqi oil source told Reuters.
Without the upgrade, Iraqi crude oil exports will remain at around 3.3 million bpd, the source said. In terms of production, Iraq was 75,000 bpd below its target for June, according to OPEC's secondary sources in its Monthly Oil Market Report (MOMR) published on Tuesday. The ten OPEC producers bound by the OPEC+ pact pumped 24.8 million bpd of crude oil in June, which was 1 million bpd short of the target levels. Although the 150,000-bpd Iraqi capacity boost is relatively small, any constraint in crude supply could further tighten the global oil market later this year, when the EU embargo on seaborne imports of Russian crude oil and refined products enters into force.