Iraq’s Oil Minister Rejects Further Production Cuts

Business View
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In a recent interview with a media outlet, Iraq’s Oil Minister Hayan Abdel Ghani stated the country aims to increase its crude reserves to more than 160 billion barrels. It is worth noting that Iraq is known to be one of the biggest oil producers in the world. While addressing the media, Iraq’s oil minister also included in his statement that the country had already made sufficient voluntary oil production cuts and also made it clear that they would not agree to make any additional reductions taken by OPEC+ at the next meeting that is supposed to be held by the next month. 

The minister’s comment over the reductions of oil production in Iraq taken by OPEC+ came at the time of the launch of new licensing rounds for 29 oil and gas fields. During the launch that was held on Saturday, 11 May 2024, Iraq’s oil minister addressed the questions asked by the media outlet. When the reporter asked if Iraq would agree to extend the production reduction, the oil minister instantly replied no. He said that the country has already made enough reductions so there is no chance of accepting more cuts. 

He told the reporter “No, I think Iraq has cut enough and will not agree to any other cut.” However, his statement does not give clarity in terms of referring to an extension or a deeper cut. 

It is worth noting that The 37th OPEC and non-OPEC Ministerial Meeting will be held on 1 June 2024 in Vienna. The OPEC+ includes the Organization of the Petroleum Exporting Countries, Russia and other non-OPEC producers and it aims to co-ordinate and unify petroleum policies among Member Countries to secure fair and stable prices for petroleum producers. In the upcoming meeting of OPEC+, it’s been assumed that OPEC+ could extend some voluntary output reduction should demand fail to pick up. Furthermore, Iraq is already causing unease in the group by failing to entirely implement the current curbs. 

Besides, Basim Mohammed Khudair, the Deputy Oil Minister of Iraq later stated Baghdad was “committed to the voluntary reduction decision within the deadline set by OPEC and its allies”. 

He added that Iraq is exporting 3.4MMpd so far this month. Besides, Iraq has consistently stated that it is dedicated to the voluntary reduction that OPEC+ first promised in 2023, but in the first three months of 2024, it exceeded its output quota by a total of 602,000 barrels per day, according to a statement released by OPEC+ on Friday, 10 May 2024. The group states that Baghdad had already agreed to reimburse with additional production reduction over the rest of the year. 

Besides, two sources close to the matter state that OPEC will soon stop displaying a calculation of the world’s demand for its crude in its monthly oil report. Instead of issuing a calculation, OPEC will focus on predictions for demand for oil from the wider OPEC+ group. It will be intriguing to watch what plans and strategies will be adopted in the upcoming 37th OPEC and non-OPEC Ministerial Meeting. 

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