Iraqi oil minister Jabar al-Luaibi has announced plans to increase the production and exports of light crude oil to 1 million barrels per day in 2019, as part of the country's strategy to boost state revenue.
The production increase will coincide with generation of light crude oil as a new grade with an API gravity of around 34-43, with the existing Basrah Light grade currently exported by Iraq to be renamed Basrah Medium. Luaibi revealed that producing three grades will boost Iraq's position in the global oil markets.
Iraq’s crude exports have grown in recent months with Iranian shipments dropping in the face of new U.S. sanctions.
Previously, Iraq split its oil supply into two grades in 2015 in order to resolve quality issues, offering Basrah Heavy produced from southern oilfields in addition to its traditional Basrah Light crude.
Selling Basrah Heavy and Basrah Light separately resulted in an increase in buyer confidence and reduced shipping waiting times for different crudes to reach terminals, which resulted in rising costs.
With the addition of the new third grade, Iraq will now sell the current Basrah Light grade as Basrah Medium with a lower API, as this grade is blended using crude from different oil fields which can result in varying qualities across different cargoes.