Kirkuk Crude Oil Disruptions

Fighting in northern Iraq between the Kurdistan Regional Government (KRG) and Baghdad continues today as production disruptions persist within the Kirkuk region. Iraqi governmental forces have so far managed to take control of all major Kirkuk producing fields – Bai Hassan, Avanah, Baba Dome, Khabbaz and Jambur.Oil production from the Kirkuk region flows to the port of Ceyhan, in Turkey, through a pipeline presently controlled by the KRG. Historically, the Iraqi government has shared space on the pipeline. While the government of Iraq is claiming that all fields are producing normally, KPLER data indicates possible loading delays at the Kirkuk Oil Terminal, which is part of the broader Ceyhan Port Complex.

Examining daily October crude loading volumes from the Kirkuk Terminal reveals that a loading gap of two or more days is rare. Such a gap occurred only once in October before fighting began in northern Iraq. It also appears that most loads were over 700,000 barrels for the month so far – this trend does not hold for the loading on 10/17 (328 kbd).

PADD 3 Oil-On-Water Continues to Decline

PADD 3 oil-on-water has been an ongoing story for several weeks following disruptions caused by Hurricane Harvey in late-August and Hurricane Nate a couple weeks ago. Between last Friday, 10/13 and today, 10/19, total oil-on-water declined by 10.6 million barrels and floating storage as a percentage of oil-on-water remains staunchly below 20%. This analysis assumes floating storage as crude on vessels moving at less than 1 knot for at least the past 10-days.

Indian Purchases of U.S. Crude Accelerate

2017 has been a period of remarkable change when examining crude oil trade flows. India is a prime example – the South Asian nation has been testing the viability of U.S. crude through several key shipments to a variety of different refineries including Mundra, Jamnagar, Paradip and Kochi. Up until this year, U.S. crude was almost never shipped to India.Indian purchases of U.S. crude have shown strength as of late. India has imported 3 million barrels in the month of October alone and an additional 1 million barrels is expected by the end of the month. This represents a stark change from the first nine-months of the year, which only saw 1.5 million barrels in total delivered to India.

World Oil-On-Water Rises Slightly for the Week

Total oil-on-water volume has increased slightly over the past week. Between 10/13 and 10/19, total oil-on-water rose 5.2% to 936 million barrels. It does appear that the upward trend has flattened out over the past three days, remaining with a bounded range of 3 million barrels.

Chinese Imports Up Week-Over-Week

Examining daily loading rates into China reveals soft import volumes early in the week with a trend reversal beginning on Wednesday, October 18th . KPLER data currently indicates that delivered crude cargoes into China total approximately 8,400 kbd for the week-starting 10/16 – a 25% increase week-over-week.