OPEC may increase oil production cuts to 1.6 million bpd, Iraq says
OPEC and allied oil producers will consider deepening their existing oil output cuts by about 400,000 barrels per day (bpd) to 1.6 million bpd, Iraq's oil minister said on Sunday.
Thamer Ghadhban told reporters in Baghdad that the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, will consider increasing the cuts in their supply pact at meetings in Vienna this week, Reuters reported.
OPEC+ oil exporters have coordinated output for three years to balance the market and support prices. Their current deal, which agreed to cut supply by 1.2 million bpd from January, expires at the end of March.
Ghadhban added that Iraq, as of Sunday, has exceeded 100 percent commitment with the supply deal and that an agreement capping production from the semi-autonomous Kurdistan region will also aid compliance.
The minister added that Iraq's crude output has not been affected by anti-corruption protests that broke out in early October across Baghdad and the oil-rich regions of the south.
Crude prices have remained about $60 a barrel for most of this year, despite supply disruptions, including the crippling attacks on Saudi Arabia’s energy infrastructure in September. Banks have warned that oil may slump to less than $50 a barrel without deeper production cutbacks, Bloomberg reported.
Iraq, OPEC's second-biggest oil producer behind Saudi Arabia, exported crude at an average rate of 3.5 million bpd in November, the oil ministry said on Sunday. Its total oil output averaged 4.62 million bpd in November, a Reuters survey showed.
Russian Energy Minister Alexander Novak on Friday said he would prefer OPEC and its allies to wait until nearer April before making a decision on whether to extend the oil output deal, the TASS news agency reported.
Still, Novak's position is likely to be opposed by most of OPEC's members as they seek to clinch a new deal at the 5-6 December meetings in Vienna.
The Wall Street Journal reported on Sunday that Saudi Arabia may push for an extension of the production cuts through mid-2020 in an effort to prop up Saudi Aramco’s initial public offering share price, citing Persian Gulf officials.
Aramco is set to announce the pricing of its shares on 5 December ahead of its roughly $25bn listing, WSJ said.
Iraq’s agreement with the Kurdistan Regional Government (KRG) caps production from the northern Iraqi region at 450,000 bpd, Ghadhban said. About 250,000 bpd of the KRG's output will be handed over to the central Iraqi government and 200,000 bpd will be used by the region to pay back debt to foreign companies, he added.