Iraq has reduced its oil production by 160,000 barrels a day and will comply with cuts it agreed to make under an OPEC output deal, Oil Minister Jabbar Al-Luaibi said, even as ship loading data suggested that exports are set to increase next month.
OPEC’s second-biggest producer is poised to ship 3.64 million barrels a day of crude oil in February from its ports in southern Basra province, according to a loading program obtained by Bloomberg, more than its December average of 3.51 million barrels a day, which itself was a record high. Iraq pledged to reduce its production by 210,000 barrels a day from October levels, under a Nov. 30 agreement by the Organization of Petroleum Exporting Countries.
“If we finally see some declining export activity, then it’s an indication that they’re implementing the deal,” Giovanni Staunovo, a Zurich-based analyst at UBS Switzerland AG, said by phone. “Let’s see if it shows up.”
Iraq is cutting production from fields operated directly by the federal government, Al-Luaibi said Tuesday by text message, rather than from fields run by international oil companies or from the Kurdish region in the country’s north. Iraq expects to fulfill its pledged cut by the end of January, he said, without specifying areas or fields where it would make the additional decrease of 50,000 barrels a day. The nation pumped 4.61 million barrels daily in December, data compiled by Bloomberg show.
The country’s government-operated fields produce around 440,000 barrels a day, or less than 10 percent of Iraq’s total output, Oil Ministry data from September show. Most of the remainder comes from fields operated by international companies, whose contracts entitle them to compensation if the government orders them to curtail production.
The semi-autonomous Kurdistan Regional Government controls about 550,000 barrels a day, or 12 percent of Iraq’s total production, and has not given any indication that it plans to contribute to the cuts. Phone calls to officials at the KRG’s Ministry of Natural Resources in Erbil were not answered.