Insurgent attacks on Iraq’s oil sector

Iraq’s oil sector — hobbled by decades of war, sanctions and underinvestment — may derive little benefit from the death on Thursday of Iraq’s al Qaeda leader Abu Musab al-Zarqawi, analysts said. Relentless sabotage has so devastated infrastructure in the north of the country that oil exports from Iraq’s giant Kirkuk field are unlikely to resume until early next year.

Iraq now relies solely on its southern Basra oil terminal in the Gulf for exports. Bad weather and power cuts conspired to knock rates to just over one million bpd at the start of the year, but levels have since recovered to around 1.5 million.

Since the U.S.-led invasion in 2003, oil production has been stuck at 2 million bpd with exports of 1.5 million bpd. That compares to pre-war output of just under 3 million bpd and exports of around 2 million.

Reuters