Iraq says it will reduce oil production starting in October
Iraq is committed to reducing oil production in line with OPEC and non-OPEC cuts, and will begin drawing down output as of October, the country’s oil minister said.
Now Iraq needed to raise production over the summer months to meet domestic demand, Thamir Ghadhban said in a statement to S&P Global Platts. Output will decline in the next few months because of lower domestic demand and the beginning of refinery maintenance, he said.
Iraq, OPEC’s second-biggest producer, has always pumped more than its commitment to the cuts. Production was 4.88 million b/d in August, a record high and up 100,000 b/d from July, according to the latest Platts survey. That compares with its quota of 4.51 million b/d.
OPEC delegates have told Platts they expect a contentious Joint Ministerial Monitoring Committee meeting Thursday, given the non-compliance of Iraq, Nigeria and others.
Saudi Arabia’s Crown Prince Mohammed bin Salman made a phone call to Iraqi Prime Minister Adel Abdul Mahdi on Thursday and discussed the importance of coordinating policy to stabilize the oil market, the Saudi press agency said that day.
During an oil conference in London in June, Ghadhban asked for understanding from fellow producers over the country’s lack of compliance, citing the much-needed revenue from oil sales to rebuild its economy after years of war.
“There is so much demand for revenues of oil that constitute more than 90% of the Iraqi government [budget],” Ghadhban said in June. “There is so much pressure from the Iraqi people to provide benefits, jobs, needs for infrastructure, schools, and so on.”
Saudi Arabia announced Sunday that it was replacing the kingdom’s energy minister, Khalid al-Falih, with Prince Abdulaziz bin Salman, a half-brother of the crown prince.
“It would be interesting to see if the kingdom takes a more hardline approach in ensuring quota-compliance under the leadership of Abdulaziz,” Vandana Hari, head of oil consultancy Vanda Insights, said in a note Sunday. “The oil world will be watching to see if he calls out Nigeria, Iraq and Russia on their quota discipline.”