Iraq Didn’t Ask for OPEC+ Oil-Cuts Exemption, Al-Sabah Says
(Bloomberg) -- Iraq hasn’t asked for an exemption from OPEC+ limits on the country’s oil output for fear that an increase in production might cause crude prices to fall, Oil Minister Ihsan Abdul Jabbar said, according to state-run newspaper Al-Sabah.
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. He expects oil to reach $50 per barrel in early 2021 amid a mild recovery in global demand, he said, the newspaper reported on Sunday.
Jabbar didn’t address whether Iraq, OPEC’s second biggest-producer, might ask for a quota exemption in the future.
The eagerness of oil-producing countries to comply with the cuts accord has helped boost prices to current levels, he said. Brent crude rose 7% last week to $48.18 per barrel, though it’s still down 27% this year.
Iraq’s economy is in distress after the pandemic sapped demand for energy and caused prices to collapse. The government’s finances are so dire it can’t pay teachers and civil servants on time, threatening a repeat of the upheaval that last year brought down the leadership and led to the deaths of hundreds of protesters.
The Organization of Petroleum Exporting Countries and allies such as Russia -- known collectively as OPEC+ -- will meet on Monday and Tuesday to assess their output policy. Under the cuts agreement the group reached in April, Baghdad had to curb its daily production by around 1 million barrels, worth roughly $48 million at current prices, to 3.6 million barrels.
Iraq has exported an average of 2.88 million barrels a day in November, the state-run Iraqi News Agency reported Sunday, also citing the oil minister. That’s the same level of exports as in October. Almost all of this month’s shipments -- 2.77 million barrels a day -- have been sent by sea from the southern port of Basra and nearby terminals, the report said.
The country is seeking an upfront payment of about $2 billion in exchange for a long-term supply contract for 48 million barrels of crude. The payment will help offset the drop in oil prices and demand caused by the pandemic, Jabbar said, according to Iraqi News Agency.
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