Economic expert Nabil Al-Marsoumi said on Saturday that Iraq should not have agreed to the voluntary reduction of its crude oil production, which amounts to nearly 430 thousand barrels, to bring its total daily production to four million barrels.
This came in a post by the economic expert on social media, Facebook, in which he spoke about Iraq’s approval to reduce its production quota in OPEC Plus.
Al-Marsoumi said that production quotas are calculated in OPEC Plus based on the production line achieved in 2018, and therefore Iraq’s production quota became 4.650 million barrels per day, compared to 11 million for each of Russia and Saudi Arabia.
He added that Iraq had committed to the mandatory reduction taken in OPEC Plus two years ago, by about 220,000 barrels per day to support oil prices, adding, “Then Iraq agreed to voluntarily commit to two reductions of about 430,000 barrels within only eight countries out of 23 countries in OPEC Plus.”
Al-Marsoumi expressed his opinion that Iraq should not have agreed to the two voluntary cuts, especially since Iraq needs to produce more than its production quota, which has fallen to only 4 million barrels per day (compared to 9 million for each of Russia and Saudi Arabia), in light of its large financial needs to cover the growing public spending.
He continued by saying, “Iraq was supposed to demand that its oil production baseline be adjusted and increased to 5 million barrels, as the UAE did two years ago when it pressured OPEC Plus and eventually obtained an increase of 300,000 barrels per day to be added to the baseline production line.”
Reuters reported last Thursday that Iraq intends to reduce its oil production to between 3.85 million and 3.9 million barrels per day in September, as part of a plan agreed upon with the OPEC+ alliance to compensate for production exceeding its share.
According to Reuters, the Iraqi cut will put pressure on the oil market ahead of the planned production increase by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, starting in October to begin easing some production cuts.
OPEC reported, citing sources for Reuters, that Iraq produced about 4.25 million barrels per day last July, which is higher than its quota of four million barrels per day.
One of the sources explained that Iraq cancelled a spot shipment of one million barrels in August to reduce its exports during the current month, adding: “There were offers for the shipment but it was withdrawn from the market, with two other shipments of the same size postponed until next September.”
The Iraqi Ministry of Oil submitted a plan to OPEC to compensate for the surplus production between this month and September of next year.
shafaq.com
