Iraq Ships More Crude Oil Despite OPEC Output Cut Pledge

18/09/2020 08:39 Oil Market

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Iraq has shipped more crude oil abroad so far this month, tanker-tracking data compiled by Bloomberg showed, even though OPEC’s second-largest producer has promised time and again in recent months that it is committed to complying with the OPEC+ production cuts. 

Between September 1 and 15, Iraq’s crude oil exports stood at 3.26 million barrels per day (bpd), 8 percent higher than the August average, Bloomberg’s estimates show.

 

In August, Iraq’s crude oil exports had dropped to 2.597 million bpd, down from 2.763 million bpd in July.  

 

It is not certain that the rising trend in September will continue throughout the rest of the month as shipments tend to be unevenly spread through any given month.

 

Still, the increase in exports, even if part of those exports come from storage, suggests that Iraq is once again above its quota as per the OPEC+ production agreement.

 

Iraq promised additional cuts of around 400,000 bpd in August to compensate for the lack of compliance with the OPEC+ deal in the previous months.

 

Iraq’s production in August was 3.652 million bpd, down by 100,000 bpd compared with July, as per OPEC’s secondary sources, which the cartel uses for reference and for calculating compliance.

 

Iraq, which has been the least compliant member of the OPEC+ production cut pact since it was first launched in January 2017, has been promising for months that it would reduce its oil production and fall in line with its quota—something it hasn’t done since 2017.

 

OPEC+ has given Iraq and other laggards in compliance until the end of September to additionally cut production on top of their share of the cuts, to offset the overproduction between May and July.

 

The OPEC+ Joint Ministerial Monitoring Committee (JMMC) is meeting on Thursday and could extend the period in which non-compliant members can compensate for their prior overproduction, sources told Reuters earlier this week.

 

Iraq has signaled that it could ask the OPEC+ panel to extend the period in which it can compensate for its lack of compliance through November, instead of by the end of September.

source:oilprice.com

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