As two major members of OPEC, Iraq is taking advantage of Iran being sanctioned by the United States to seize crude oil buyers and expand its market share. Competition between the two countries in the crude oil field is becoming increasingly fierce.

In May 2019, after the United States terminated exemptions from Iranian oil sanctions, former important Iranian customers such as China, India and Turkey switched to buying Iraqi crude oil.

According to statistics from the General Administration of Customs, in July 2019, China's crude oil imports from Iraq once again exceeded 1 million barrels per day. The average import volume from January to July 2019 reached 940,000 barrels per day, an increase compared with the same period in 2018.

100,000 barrels per day, an increase of 200,000 barrels per day compared with the same period in 2017.

As Iran's largest crude oil importer, China's demand for Iraqi crude oil is increasing.

During his meeting with Chinese Ambassador to Iraq Zhang Tao on August 25, 2019, Iraqi Foreign Minister Mohammed Hakim praised China as "an important strategic partner of Iraq" and also emphasized China's intention to increase investment in Iraq's energy sector.

necessity.

Following the meeting, PowerChina and Norinco International signed a contract to build a refinery in the Iraqi port of Fao in the Persian Gulf.

As Iran's second largest crude oil importer, India's crude oil purchases from Iran fell to the lowest level in May this year. At the same time, India's crude oil imports from Iraq reached 1.15 million barrels per day, the highest level since January 2018.

highest level since.

In August 2019, India's crude oil purchases from Iraq further increased and exceeded 1.2 million barrels per day, setting a new high since January 2017!

Most of these import orders come from the Paradip refinery operated by Indian Oil Corporation and the Jamnagar refinery operated by India Reliance Company.

In addition, Türkiye, a former buyer of Iranian crude oil, has begun to weaken its dependence on Iranian oil.

In May 2019, Turkey's purchases of Iraqi crude oil almost doubled compared to April 2019, reaching 220,000 barrels per day, the highest level since mid-2018.

It follows that when Ankara protested the U.S. decision to revoke the exemption, Turkey had already turned to other crude oil suppliers.

It is worth noting that while Iraq increased crude oil exports to countries such as China, India and Turkey, Iraq reduced crude oil exports to the United States.

In August 2019, Iraq's crude oil exports to the United States dropped to 220,000 barrels per day, and the average crude oil export volume from January to August 2019 was only half of the same period in 2018.

We believe this is related to Iraq's desire to capitalize on growing demand in Asia and the United States' reduced reliance on offshore crude oil, especially light oil imports.

Generally speaking, Iraq successfully took advantage of the blank period of US sanctions on Iran to win over former buyers of Iranian oil such as China, India, and Turkey. It took advantage of the huge scale and growth rate of crude oil demand in Asia to target China and Turkey in August this year.

India's crude oil exports have hit new highs in recent years, and the trend of increasing Iraqi crude oil exports may continue.

Risk factors: Factors such as geopolitics and El Ni?o have a greater impact on oil prices.

The main points of this article are excerpted from the September 27, 2019 report "In 2019, a war for crude oil broke out between Iran and Iraq!"

》 (Chen Shuxian, Petrochemical Industry Analyst, Practice Number S1500519080001).

Chen Shuxian, petrochemical industry analyst.

He holds a bachelor's degree in Financial Mathematics from Peking University's School of Mathematical Sciences (SMS), a double bachelor's degree in economics from Peking University's National Development Research Institute (CCER), and a master's degree in Western Economics.

Joined Cinda Securities Research and Development Center in July 2017 and is responsible for petrochemical industry research.

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