Basrah Medium Crude Oil of Iraq. Its Production, History, and Price
Basra is the third largest city in Iraq and the first port city on the Persian Gulf.
The port has direct access to the Persian Gulf, through the river gulf, and has a natural depth of more than 10 meters. It is one of the largest ports in Iraq and has a storage capacity for oil.
Basra, also known as Basrah, is an important location for crude oil production, refining, transport, and export. The region also produces nearly all of Iraq’s natural gas (about 2 billion cubic meters per day), which is shipped from Basra to other parts of the country or exported via pipelines to Turkey and Syria.
The oil industry has long been one of Basrah’s main pillars of the economy. Since the 1970s, several oil companies have been operating in the city. With so much activity, it is no surprise that this is one of Iraq’s most prosperous regions regarding oil production.
The history of Basrah and its role in the oil industry dates back to 1923 when GudENDvlir Oil Exploration Company discovered oil. In addition, during World War II, Basrah was a key site for British operations and a strategically important port for moving troops and supplies.
Basrah Medium Crude Oil
Basrah Medium crude oil is produced in the Middle East. It primarily used for gasoline, diesel, jet fuel, and kerosene.
Like most crudes, Basrah Medium contains a mix of hydrocarbons with low sulfur content. However, it also has a relatively high viscosity, making it more difficult to transport than other crudes.
Basrah medium crude oil is a type of crude oil produced in southern Iraq. It is light yellow to light brown and is characterized by low viscosity and high API gravity.
Basrah medium crude oil has a lower density than other types of crude oil, and its API gravity can range between 10-20 degrees.
In addition, Basrah medium crude oil contains high levels of sulfur content, which contributes to its distinct color.
Basrah medium crude oil is extracted from the Kirkuk Al-Asaoua field in southern Iraq. The field produces around 100,000 barrels per day (BPD) of medium crude oil.
Basrah medium crude oil is used for various industrial purposes, including the production of gasoline, diesel fuel, and lubricants. In addition, because Basrah medium crude oil contains relatively high levels of sulfur content, it can also be used as an additive to improve the performance of certain types of asphalt pavement.
Location and Transport
Basrah Medium is mainly found in Iraq. However, it can also be found in Kuwait and Saudi Arabia. The region where it is most abundant is the Persian Gulf. Iraq is the second-largest producer of Basrah Medium after Saudi Arabia, accounting for about 14% of global production. The United States imports about 9% of its total supply from Iraq.
The Port of Basra is located in the southeast of Iraq on the Persian Gulf, with direct access to the Persian Gulf. The port has direct access to the Persian Gulf, through the river gulf, and has a natural depth of more than 10 meters.
A pipeline network connects the port to the oil fields in the Najmah, West Qurna, and Rumaila Oil Fields, about 50 kilometers away. The main rail lines for transporting crude oil from the port are the Baghdad–Basra Railway and the Basra Railway.
The transportation of crude oil from Basra to other parts of the Middle East and Asia takes place by tanker, with a maximum distance of about 2,800 nautical miles from the port. The port is connected to the national network with a 30-kilometer pipeline that transports crude oil, natural gas, and condensate.
Production and Storage
The leading crude oil produced in the Basra region is Basra Medium, a light, sweet, low-sulfur crude oil.
The crude oil has an API gravity of around 34 degrees and low levels of impurities, such as sulfur and nitrogen.
The net crude oil production in the Basra region was around 1.5 million barrels per day in 2017. The port’s main oil storage tanks are the Al Faw and Al Basra Tank Farms.
The Al Faw tank farm is connected to a production terminal with a capacity of about 1 million barrels per day. In contrast, the Al Basra tank farm is connected to a production terminal with a capacity of about 2 million barrels per day.
The history of oil in the Basra region goes back to the early 20th century when companies such as the Anglo-Persian Oil Company (later British Petroleum) and the Compagnie Française des Pétroles (later Total) started exploration and production in the area.
In 1972, after the discovery of large reserves of crude oil in the West Qurna Oilfield, operations were shifted to the port of Basra, where crude oil was shipped to refineries in the Gulf.
With the depletion of reserves in other Iraqi fields, the production shifted again, and by the end of the 1970s, it was once again the most productive region in the Western desert.
Owners and Operators at Basra
Companies that operate in the Basra region, the oil fields, or the port include the following:
- Iraqi Oil Company
- West Qurna Operating Company
- Basrah Gas Company
- Basrah Oil Company.
The Iraqi government controls all oil operations in the country, including the refining operations, export of crude oil, and the transportation of crude oil and refined products. The Iraqi government is also the main owner of refineries and plants in the country.
Price of Basra Medium Crude Oil
The price of Basra Medium crude oil is determined by the demand and supply in the market, by the demand for refined products, and by the crude oil supply and demand in other parts of the world.
The price also depends on the availability and transportation of crude oil to other parts of the world.
The price of Basra Medium crude oil is also influenced by prevailing weather conditions, such as hurricanes in the Gulf of Mexico and the Atlantic Ocean, which affect the supply of crude oil from the Middle East.
Speculation on the Price of Basra Medium crude oil
The price of Basra Medium crude oil has fluctuated since the early 2000s when crude oil prices were low. The price of Basra Medium crude oil rose sharply during the Iraq War in 2003 and 2004 and continued to rise until 2008 when it reached a high of around $140 per barrel.
The price plunged when the global financial crisis hit in 2007. At the peak of the crisis in late 2008 and early 2009, the price of crude oil fell below $40 per barrel. The price of Basra Medium crude oil recovered slightly after the crisis, reaching $80 per barrel in 2010.
The price of crude oil continued to rise, reaching $100 per barrel in 2012 and $110 per barrel in 2013. In 2014, the price of crude oil fell to around $80 per barrel when the world oil supply exceeded demand. The price of crude oil has been fluctuating in the $60–$80 per barrel range since 2015.