Oil Majors in Iraq Committed to Output Cuts

Iraq's oil minister said on Monday that most oil majors working on its territory were participating in oil output reductions agreed as part of the deal between OPEC and non-OPEC producers to help to balance the market.

OPEC and several independent producers agreed last year to cut supply, the first such deal in 15 years, as of Jan. 1, 2017 to remove a glut. The effort has helped oil prices to rise to $55 a barrel, from a 12-year low near $27 a year ago, Reuters reported.

Iraqi oil Minister Jabar al-Luaibi said that to deliver Iraq's share of the reduction, the country had cut output from its "national fields" and those of international oil companies (IOCs) working in Iraq were also participating.

"We are in collaboration with IOCs to cut from their part," he told Reuters on the sidelines of a conference. "We are in agreement with most IOCs, not all of them, that they will be in line with us. This is going well."

Iraq agreed to lower its production by 210,000 barrels per day under the deal and Luaibi said earlier on Monday Iraq was abiding by the accord.

The Iraqi minister also said he was very happy with the progress of the output cutting agreement, and expressed hope that oil prices would increase further. "It is heading toward $60 now. We hope it will get to the level of $60 and $60-$65 will be reachable."

He said it was too early to say if the supply-limiting deal needed to be extended beyond the first half of 2017. "We will see. We think the market will balance."

Iraq is now OPEC's second-largest oil producer having rapidly boosted output in recent years, and is aiming to increase supply further in future once the OPEC deal has ended.