Iraq plans to cut oil exports to offset OPEC+ output quota breaches

The Iraqi Ministry of Oil will reduce the country’s total oil exports to 3.3 million b/d from April, it said in a statement yesterday.

PHOTO: Oil pump jacks with Iraq's flag in the background. Getty Images

Iraq exported about 3.43 million b/d of crude oil in February, Reuters reported. The oil ministry’s latest announcement amounts to a cut of 130,000 b/d from the previous month’s levels, it added.

The ministry made this decision to reduce exports in the upcoming months to compensate for exceeding its OPEC+ production quotas in January and February.

This news has added further upward pressure on the price of Brent crude, which settled at $86.89/bbl on Monday. “OPEC compliance should be improving,” with this announcement, said Price Futures Group’s senior market analyst Phil Flynn.

Iraq, the second-largest crude producer in OPEC, exceeded its allocated production quota of 4 million b/d in January and February, according to the coalition’s latest monthly oil market report. The country’s output stood at 4.2 million b/d last month.

“In confirmation of Iraq's position in support of the initiatives of OPEC+ member states to maintain stability and balance in the oil market, the Iraqi Ministry of Oil confirms its commitment to the agreed upon voluntary reduction,” it stated.

The Organisation of Petroleum Exporting Countries (OPEC), led by Saudi Arabia, along with its allies (OPEC+), decided to extend the voluntary production cut of 2.2 million b/d through the second quarter of this year in a bid to bring a “balance” to the oil market amid the uncertainty of global economic growth.

By Aparupa Mazumder 

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