Blackout Causes $60M Oil Export Loss
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
DUBAI, United Arab Emirates – Saboteurs triggered a cascade of blackouts that halted Iraq’s entire oil export capacity for most of yesterday, a move that cost the country almost $60 million in lost exports and rattled already jittery world markets.
Government officials blamed the outage on insurgent attacks that toppled key power pylons in central Iraq and darkened broad swaths of the country, including its two largest cities, Baghdad and Basra.
By late yesterday, tankers were being loaded at less than a third of normal capacity with the help of backup generators, Dow Jones Newswires reported. Analysts said the disruption wasn’t likely to affect world oil prices.
For Iraq, the outage was expensive. It cost the national treasury about $60 million in lost revenue on daily earnings that average around $85 million, an oil analyst with PFC Energy in Washington, Jamal Qureshi, said.
If pumping continues below capacity, the cut in exports could cost tens of millions of dollars each day.
Since the start of 2004, Iraq has lost $11 billion in oil revenues, mostly to sabotage, an oil analyst for Petroleum Intelligence Weekly in New York, George Orwel, said.
Few observers think Iraq can be relied on anytime soon for a steady supply. “People already know every barrel you get out of Iraq is like a windfall, because of the security situation,” Mr. Orwel said. “You cannot depend on it.”