06-02-2017

Iraq’s South Oil Exports Said to Fall From Record on OPEC Cuts

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Iraq’s southern crude oil exports dropped in January from a record high a month before as the country implements output cuts agreed by OPEC and other major producers to curb the global glut.

The nation’s exports decreased 187,000 barrels a day to 3.323 million barrels a day in January from the previous month, according to a person familiar with the matter, who didn’t want to be identified because the data isn’t public. The Oil Ministry’s spokesman couldn’t immediately be reached on Friday, which is a weekly holiday in Iraq.

Shipments in January from the South Oil Co. were 3.278 million barrels a day and exports from the North Oil Co. 45,000 barrels a day, the person said. Iraq’s exports from the south had risen to a record average of 3.51 million barrels a day in December, Oil Minister Jabbar Al-Luaibi said on Jan. 9.

OPEC and 11 other major-producing countries including Russia agreed late last year to cut a combined 1.8 million barrels a day of output for six month starting from January, with Iraq’s share set at 210,000 barrels. Some analysts expressed doubts that Iraq would deliver its share of the cuts, potentially undermining the drive to rebalance the market and drain inventories bloated by two years of unfettered production that helped to crash prices.

During the months of negotiation that led to November’s OPEC agreement, Iraq had insisted repeatedly that it should be exempted from cuts as it battles the Islamic State insurgency and rehabilitates its oil industry after years of war and sanctions. The country also disputed the data to be used in any discussions, insisting that numbers compiled by OPEC underestimated Iraqi production by about 5 percent. Iraq ultimately relented, agreeing to reduce its output.

Iraq was close to implementing its share of the agreed production cuts and would be in full compliance by the end of the month, Al-Luaibi said Jan. 23. The Middle Eastern producer had already reduced output by 180,000 barrels a day and would cut another 30,000 soon, the minister said in a Bloomberg television interview.

Source: Bloomberg

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