Published on July 1, 2014

Over past few days, with excavate crises in Iraq the prices of crude oil have significantly increased at 9 months high near USD 115/barrel, however owing to turbulence in Iraq might raise concerns over the ready availability of crude oil, which might be delayed for two week if the violence in the country prolongs to soar up, as per the industry players. According to the one of the major suppliers, after the major crises the prices of petrochemical were seen less responsive although the prices of crude were seen as more volatile to political unrest and the rise in petrochemical prices were not more than three weeks.

As per the industry experts in previous days after striking nine month highs around USD 115/barrel, the prices of Brent Crude oil have tumble back below USD 114/barrel. One of the major reasons for rise in oil prices were possible supply disruptions in the midst of Sunni militia fighters and sectarian violence in Iraq, however with the recent violence the production in Iraq have not been disrupted, even though the exports of crude from the south which accounts for 90% of Iraqi production has recorded almost near for the month of June.

In Organization of the Petroleum Exporting Countries (OPEC), Iraq stands the second largest producer after producing approximately 3 million barrels a day of oil last month and is also noted as the fifth largest reserves in the world. Currently the oil production of the Iraq is around 3.45m barrel/day of which 3.37m barrel/day is crude and the total global production of crude oil of Iran is around 4%, moreover in last 35 year the production have been mounting at its highest level earlier this year.

According to the industry experts, alike last month, in the month of June, 2014 the oil shipments are likely to be around 2.7 million barrels from No.2 exporter of OPEC. Moreover traders are keeping close eyes on the U.S. and the exports of crude are prone to commence as early as August. As per the data from the U.S. Department of Energy's Energy Information Administration, last week the crude inventories of U.S. had unexpectedly augment by 1.74 million barrels to 388 million barrels.

Last week oil minister of Iraq had said that by next month the crude export of nation will speed up and the south oil rich will not be affected by the violence taking place in the northern side of the country. Moreover the largest refinery of the country the Baiji refinery and North Oil Co. were persistently controlled by the government troops and since 15th June, 2014 the Baiji refinery has been shut down after Sunni insurgents from the Islamic State in Iraq and almost 310,000 barrels/day plant were tried to apprehend by Levant.