Iraq Denies Asking OPEC for Exemption From Pact Aimed at Reducing Output

Oil tanks are seen at the gas field of Siba in Basra, Iraq April 25, 2018. REUTERS/Essam Al-Sudani /File Photo
Oil tanks are seen at the gas field of Siba in Basra, Iraq April 25, 2018. REUTERS/Essam Al-Sudani /File Photo
TT
20

Iraq Denies Asking OPEC for Exemption From Pact Aimed at Reducing Output

Oil tanks are seen at the gas field of Siba in Basra, Iraq April 25, 2018. REUTERS/Essam Al-Sudani /File Photo
Oil tanks are seen at the gas field of Siba in Basra, Iraq April 25, 2018. REUTERS/Essam Al-Sudani /File Photo

Iraq's Oil Minister Ihsan Abdul Jabbar said that Iraq didn't ask OPEC for exemption from a pact aimed at reducing output.

His statements were made following Iraq’s Finance Minister Ali Abdul Amir Allawi announcing that Iraq is feeling the strain under OPEC+ deal.

"We have reached the limit of our ability and willingness to accept a policy of one-size-fits-all," Iraq's finance minister said at a Chatham House Iraq conference this week. "It has to be more nuanced and it has to be related to the per-capita income of people, the presence of sovereign wealth funds, none of which we have."

Oil prices are expected to reach about USD50 at the beginning of 2021 amid a mild recovery in global demand, the oil minister said.

He added that the commitment of members to the deal would help boost oil prices and Iraq was not seeking exemption “fearing from new retreat in oil prices.”

Under the current OPEC+ agreement, Iraq was required to cut output by more than 1mn b/d in May-July and by 849,000 b/d in August-December from an October 2018 baseline of 4.65mn b/d.

The results of the OPEC+ coalition’s output-cuts deal have been positive and stabilizing for the oil market, given the impact the coronavirus pandemic has had on producers and importers of crude, Jabbar said.

Iraq has exported an average of 2.88 million barrels a day in November. Exports from Basra ports to the south reached 2.77 million barrels a day in November, citing the oil minister.



Oil Steady after US Stockpile Build

An oil pump of IPC Petroleum France is seen at sunset outside Soudron, near Reims, France, August 24, 2022. REUTERS/Pascal Rossignol/File Photo
An oil pump of IPC Petroleum France is seen at sunset outside Soudron, near Reims, France, August 24, 2022. REUTERS/Pascal Rossignol/File Photo
TT
20

Oil Steady after US Stockpile Build

An oil pump of IPC Petroleum France is seen at sunset outside Soudron, near Reims, France, August 24, 2022. REUTERS/Pascal Rossignol/File Photo
An oil pump of IPC Petroleum France is seen at sunset outside Soudron, near Reims, France, August 24, 2022. REUTERS/Pascal Rossignol/File Photo

Oil prices steadied on Thursday after falling more than 1% the previous day because of a build in US gasoline and diesel inventories and cuts to Saudi Arabia's July prices for Asia.

Brent crude futures were up 23 cents, or 0.35%, at $65.09 a barrel by 1148 GMT. US West Texas Intermediate crude gained 16 cents, or 0.25%, to $63.01 a barrel.

Oil prices closed around 1% lower on Wednesday after official data showed that US gasoline and distillate stockpiles grew more than expected, reflecting weaker demand in the world's largest economy.

Geopolitics and the Canadian wildfires, which can reduce oil production, provide price support despite a potentially over-supplied market in the second half of the year with expected OPEC+ production hikes, PVM analyst Tamas Varga said.

The price cut by Saudi Arabia followed the OPEC+ move over the weekend to increase output by 411,000 barrels per day (bpd) for July.

The strategy of OPEC's Saudi Arabia is partly to punish over-producers by potentially unwinding 2.2 million bpd between June and the end of October, in a bid to wrestle back market share, Reuters previously reported.

"Oil demand will be shaped by trade negotiations between the US and its trading partners," PVM's Varga said.