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Iraq Refuses to Cap Oil Output

Iraq Refuses to Cap Oil OutputIraq Refuses to Cap Oil Output

Iraq's Prime Minister Haider al-Abadi said the country has not yet reached its full oil market share, suggesting his government would not restrain crude output as part of any possible OPEC agreement to lift prices.

"And we are not open to the capping because Iraq is still below what it should produce," Abadi told reporters, responding to a question about whether the second-largest OPEC producer would be open to such a deal, according to Reuters.

Venezuela, whose economy like Iraq's has been hit hard by the oil price collapse, has for months sought to rally producers toward an agreement to limit production. Despite rising this year, oil at around $49 a barrel is less than half its level of mid-2014.

Members of the Organization of Petroleum Exporting Countries are due to meet informally in Algeria next month on the sidelines of the International Energy Forum. Russia is also expected to attend the International Energy Forum.

Abadi's comments come as sources in OPEC and the oil industry told Reuters Iran, OPEC's third-largest producer, was sending positive signals that it may support joint action to prop up the oil market.

Tehran refused to join an attempt in April to freeze output at January levels.

Iraq, which depends on oil sales for 95% of its public spending, appears set to continue boosting production, which currently stands at around 4.6 million barrels per day.

The Baghdad government resumed partial pumping from fields in Kirkuk operated by state-run North Oil Company via a Kurdish pipeline to Turkey, the oil ministry said on Thursday without explanation.

Oil flow had stopped in March because of a dispute between Abadi's government and authorities in the autonomous Kurdish region over control of oil resources.

Abadi said on Tuesday the decision was made to extract gas associated with oil and avoid damage to reservoirs.

"We have to produce oil in order to get gas," he told the news conference in Baghdad.

Abadi also said Iraq may base its public budget for 2017 on an oil price of $35 per barrel.

Financialtribune.com