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OPEC’s No.2 Boosted Production, Exports Just Before Cuts Began

Tsvetana Paraskova

Iraq increased in December both its oil production and exports, just ahead of the start of the new round of OPEC cuts, but OPEC’s second-largest producer says that it will be sticking to its pledge to reduce output as agreed.

According to data from Iraq's State Oil Marketing Organization (SOMO), as carried by S&P Global Platts, the total Iraqi oil exports in December—including those from the semi-autonomous region of Kurdistan—rose by 33,000 bpd from November to December, and stood at 4.14 million bpd last month, compared to a total of 3.81 million bpd exports from Iraq and Kurdistan in November. 

Production from Iraq and Kurdistan inched up by 10,000 bpd from November to average 4.465 million bpd in December, data from SOMO showed.

According to Iraq’s oil ministry data from last week, Iraq’s federal oil exports jumped to 3.726 million bpd in December from 3.372 million bpd in November, as exports from the southern ports at Basra hit a record high and exports from the northern Kirkuk fields increased after a slow tentative resumption in November following a year-long hiatus.

But as January began, Iraq vowed last week to stick to the production cuts agreed to by OPEC and its allies.

OPEC’s second-biggest producer will hold its production at 4.513 million barrels per day for the next six months, according to the Iraqi Oil Ministry, as cited by S&P Global Platts. If achieved, Iraq would produce 140,000 fewer barrels per day for the next six months than it did in October 2018—the date from which the cuts were calculated.

The news comes after Kpler and Refinitive Eikon data showed earlier last week that Iraq increased its oil exports to the United States in December by 140,000 barrels per day.

Iraq’s commitment to the latest deal is critical to the cartel’s success, and not just because it is OPEC’s second largest producer. In the first round of production cuts, Iraq was the largest overproducer and least compliant member of the group.

By Tsvetana Paraskova for Oilprice.com

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