* Southern exports hit 2.35 million bpd so far in 2014
* January's export rate so far at post-Saddam high
* Increase may not last; buyers say February allocations cut
By Alex Lawler and Peg Mackey
LONDON, Jan 16 Oil exports from Iraq's southern
terminals jumped by almost 300,000 barrels per day (bpd) in the
first two weeks of 2014 from all of December, a sign of progress
in delivering on a plan for significant supply growth.
Crude buyers said, however, that despite the rise in
exports, Iraq was still catching up with loading delays caused
partly by bad weather. Some customers said the State Oil
Marketing Organization (SOMO) had cut their crude allocations
Iraq's southern exports averaged 2.35 million bpd in the
first 15 days of January, according to shipping data tracked by
Reuters and to estimates from a tanker-tracking company. That is
up from 2.08 million bpd in the month of December.
If sustained in the rest of the month, the volume would
amount to the highest level since at least 2003. The southern
ports typically handle almost all of Iraq's oil exports.
A return to sizeable growth, after a slowdown in 2013, is
possible following Iraq's work to expand its southern port
capacity. Together with signs of higher supply from Libya, the
increase could weigh on global oil prices.
"The January loadings will be a test of what SOMO can export
through the year," said Mohammed al-Jibouri, who headed SOMO
after the fall of Saddam Hussein and later served as trade
"The oil minister has said the work is finished at the
terminals, so they should be capable of handling exports of more
than 2.5 million barrels a day."
It remains to be seen whether the increase is sustainable,
given creaky infrastructure and worsening violence in Iraq. A
lack of storage capacity means production must be shut down if
the weather gets too bad for tankers to load, industry sources
"Export capacity is probably a notch higher now than in the
fourth quarter," a source with the tanker tracking company said.
"However, I believe the uptick in January is partially due to
the weather delays at the end of December."
In a sign that all has yet to go smoothly, several buyers of
Iraq's Basrah Light crude - the grade exported from the south -
this week said they would see a reduction in their February
"They have huge delays, and they need to catch up with
loadings," a major buyer in Asia said. "So they had to reduce
the number of cargoes by eight to 10 (for January-February)."
From the north, Iraq also exports about 300,000 bpd from its
Kirkuk fields to Ceyhan in Turkey. Northern exports could
increase further if the autonomous region of Kurdistan starts to
sell oil via a pipeline to Turkey.
The Kurdish plan has angered Baghdad. Iraqi Prime Minister
Nuri al-Maliki threatened on Sunday to cut central government
funding for Kurdistan if the Kurds proceed with exports without
(Additional reporting by Dmitry Zhdannikov and Florence Tan;
editing by Jane Baird)