Iraq has announced its decision to decrease its crude oil exports to 3.3 million barrels per day (bpd) in the upcoming months in order to compensate for surpassing its OPEC+ quota since January. The country’s oil ministry revealed this move on Monday, indicating a reduction of 130,000 bpd from the previous month’s export volume.
As the second-largest producer in OPEC, Iraq notably exceeded its output target in both January and February, set forth during the agreement made by several members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+). The alliance, led by Saudi Arabia, has emphasized the significance of adhering to the agreed production cuts despite the surge in oil prices this year, with Brent crude reaching above $86 a barrel on Monday, marking its highest level since November.
Iraq’s oil ministry affirmed its commitment to the voluntary production cuts established with OPEC+, restricting its output to 4 million bpd. Initially slated for the first quarter, these cuts have now been extended until the end of June.
According to secondary sources providing data on OPEC+ production, Iraq recorded an output of 4.2 million bpd in February. During the same month, Iraq exported an average of 3.43 million bpd, as disclosed by the oil ministry earlier this month. Consequently, the recent pledge by Iraq signifies a reduction of 130,000 bpd from the export rate in February.
In February, Iraq announced its intention to evaluate its production levels and address any excess output beyond its OPEC+ commitments. This decision followed a meeting between Saudi Energy Minister Prince Abdulaziz bin Salman and Iraqi Prime Minister Shia al-Sudani, where the importance of aligning their strategies to uphold market stability was underscored.
The voluntary cuts by OPEC+ members until June represent the latest effort by the alliance to mitigate market challenges, initiated in late 2022 due to concerns over weak economic growth impacting oil demand amidst increasing supply from non-OPEC+ producers.