Iraq Plans 4 Million-Barrel Crude Oil Storage in South Korea as Part of Strategic Move for Asian Market

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Oil and LNG storage facilities and "hubs" have become highly competitive sectors--especially in the Asian and Southeast Asian regions, where energy-hungry economies that lack of adequate domestic supplies look to secure their forward supplies. The oil storage boom is also a symptom of wariness about the direction of oil prices set against volatile and inscrutable economic trends, such as the ongoing threat of instability in the oil-producing regions of the Middle East.

Iraq's oil minister has announced plans to store 4 million barrels of crude oil in South Korea, which is seen to be a strategic location from which to serve Asian markets. Deliveries into storage will begin toward the end of this year or early next year.

Iraq's oil production is currently peaking at about 3.25 million barrels per day; in August, exports averaged 2.79 million barrels per day. This has been made possible by production from the southern oilfields, which has increased by 600,000 barrels per day in 2012 to total 2.9 million barrels. By the end of this month, overall daily production will have been ramped up an additional 175,000 barrels. The target by the end of 2013 is 3.4 million barrels per day.

South Korea is the world's fifth-largest oil importer, and oil storage facilities are now approaching full capacity.

For related information, see September 9, 2013, article - Africa's Largest Oil Blending and Storage Terminal Sited North of Cape Town, and March 15, 2013, article - Abu Dhabi's $13 Billion of Investments Back Malaysia as Regional Oil Hub.

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