Iraq, OPEC’s second largest oil producer, is preparing to cut production

According to today’s oil price report on September 9, since OPEC began restricting oil production, Iraq, the second largest OPEC producer after Saudi Arabia, has exceeded the production cap almost every month for the past two and a half years. But now Iraq says it is ready to cut production.

Thamer Ghadhban, Iraq’s oil minister, said Iraq was now ready to reduce crude oil production next month. In a statement, the official said: “We are committed to reaching a cut-off agreement.” Ghadhban’s statement runs counter to the evidence that Iraq has failed to meet its production reduction obligations since the signing of the first agreement.

For Iraq, the OPEC+agreement coincides with an improvement in the country’s security situation and a steady increase in oil production.

Although Baghdad claims that it needs higher oil production to generate more oil revenue (90% of government revenue) to rebuild a country devastated by decades of war, the second largest oil producer in OPEC has put a different spoke in the cartel wheel of OPEC, which he hopes to find elsewhere. Some member states have abided by the agreement to cut oil production.

Iraq’s failure to fully comply with the agreement is also one of the reasons for tensions within OPEC, and Tehran believes that its competitors within OPEC have stolen its market share.

The latest monthly survey released by S&P Global Plats last week showed that Iraq’s oil production hit a record high in August, with an estimated 4.88 million barrels per day of oil injected into the country.

The Pratz survey showed that Iraq’s daily production in August increased by 100,000 barrels compared with July, exceeding Iraq’s daily production quota of 4.51 million barrels last month, reaching 370,000 barrels.

The Reuters survey also found that Iraq increased production in August. Both Reuters and Pratz surveys estimated that OPEC increased oil production for the first time in August, despite OPEC’s constant calls for “full compliance” and “market stability”. Iraq and Nigeria were among the biggest contributors to OPEC’s August output increase, according to the survey.

OPEC’s official production data for August will be released on September 11, but previous July’s monthly report on the oil market showed that Iraq’s output grew the most, increasing 32,000 barrels a day in July to 4.753 million barrels a day, while Saudi Arabia’s output in July was 134,000 Rand a day by Ano, below OPEC’s quota. More than half a million barrels of oil.

According to Bloomberg’s ship tracking data, OPEC also increased oil exports in August, and Iraqi oil ministry data showed that Iraq’s crude oil exports increased from 3.566 million barrels a day in July to 3.633 million barrels a day last month.

Dave, global head of commodity pricing at S&P Global Platts? Dave Ernsberger told CNBC last week: “The recent increase in Iraqi oil production has turned the problem that had been a headache for OPEC into a complete migraine.”

These increases in Iraq have again attracted the attention of Saudi Arabia, a major OPEC member. Since the OPEC + Alliance began to reduce production in January 2017, OPEC has repeatedly warned members of the violation of the agreement about the violation of the cut.

Not long ago, Iraqi Oil Minister Tamergah Ban said Sunday that Iraq would begin to cut oil production in October and would stick to OPEC’s production reduction plan. He said that in the past few months, Iraqi oil production has exceeded its quota due to increased domestic demand in the summer, refineries will enter a maintenance period in October, and domestic demand will decline.