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Barclays in a weekly report notd tht the Iraqi situation is critical to global oil markets, with Libyan production set to be offline for a significant period and the full return of Iran’s sanctions-restricted ba..

02 Jun 2014

LONDON (Commodity Online): Prime MinisterNouri al- Maliki has made a come back winning the most number of seats in Iraq's parliamentary elections.

Barclays in a weekly report notd tht the Iraqi situation is critical to global oil markets, with Libyan production set to be offline for a significant period and the full return of Iran’s sanctions-restricted barrels looking unlikely in the near term. The Iraqi situation is critical to global oil markets, with Libyan production set to be offline for a significant period and the full return of Iran’s sanctions-restricted barrels looking unlikely in the near term.

OPEC's ability to manage its overall production levels, consistent with demand and other sources of supply, hinges on Iraq's output. Wood Mackenzie recently forecast Kurdistan's exports to grow by 500 kb/d to 725 kb/d by 2020,"provided there are no constraints."

Barclays noted that it is uncertain whether Kurdish Regional Government (KRG) can reach that potential on its own. If the Iraqi government is able to make good on its ambitious oil infrastructure development projects-including additional storage and pumping facilities- and reach an agreement with the KRG and stabilise the security situation, exports could indeed reach the 3.4 mb/d that the government has envisaged for 2014.

However, if Baghdad is increasingly forced to divert resources to combat the security threat posed by the Sunni insurgency it could delya vital infratructure upgrades and the country's production and export profile could remain capped.

Barclays further noted that if extremist groups were to target southern energy facilities, Iraq production could be severly curtailed.


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