OREANDA-NEWS.  Iraq's oil exports have fallen so far in December, capping what has been a disappointing year and highlighting challenges it faces in 2014 in achieving significant production growth.

The drop in exports this month shows Iraq has yet to overcome infrastructure constraints and security issues that slowed output growth in 2013, supporting global prices, and threaten to dampen plans for a sizeable expansion next year.

"Some new capacity looks likely in 2014, but it is more realistic to expect a lower growth from Iraq throughout the year, rather than an acceleration," said Samuel Ciszuk, analyst at the Swedish Energy Agency.

Exports from Iraq's southern terminals have averaged 2.01 million barrels per day (bpd) so far in December, according to shipping data tracked by Reuters, down slightly from November's average of 2.07 million bpd.

Iraq exports most of its oil from the south, where work to expand port capacity has, temporarily, curbed shipments. In addition, bad weather in December has disrupted southern loadings, say shipping sources.

"It's very low - there are delays and more delays," said a trader of Iraqi crude, referring to cargo export dates being pushed back.

Shipments of Kirkuk crude from northern Iraq remain below their potential, constrained by bomb attacks on the pipeline to Turkey and a dispute with the Kurdistan Regional Government (KRG) over oil and land rights.

So far in December, Kirkuk shipments have averaged about 270,000 bpd, industry sources said, about 30,000 bpd less than in November. This would bring total exports to 2.28 million bpd, down from November's 2.38 million bpd.

Iraq's oil revival, which got under way in 2010 after decades of sanctions and wars, slowed in 2013. Output has struggled to exceed 3 million bpd on a sustained basis, compared with its end-2013 target of 3.5 million bpd.

In 2014, Iraq is aiming to lift exports to 3.4 million bpd including 400,000 bpd from the KRG, implying production of 4 million bpd including oil used domestically. Traders and analysts say that looks optimistic.

"An addition of 300,000 bpd of exports looks realistically achievable, particularly also given the rising violence levels," said Ciszuk. "When it comes to the 400,000 bpd of KRG oil exports, this sounds high, given that a lot of politics will be involved in when this pipeline is started."