Iraq’s South Oil Exports Decline

Iraq’s South Oil  Exports Decline
Iraq’s South Oil  Exports Decline

Iraq’s southern crude oil exports dropped in January from a record high a month before as the country implements output cuts agreed by OPEC and other major producers to curb the global glut.

The nation’s exports decreased 187,000 barrels a day to 3.323 million barrels a day in January from the previous month, according to a person familiar with the matter, who did not want to be identified because the data is not public, Bloomberg reported. Shipments in January from the South Oil Co. were 3.278 million barrels a day and exports from the North Oil Co. 45,000 barrels a day, the person said. Iraq’s exports from the south had risen to a record average of 3.51 million barrels a day in December, Oil Minister Jabbar al-Luaibi said last month.

OPEC and 11 other oil producing countries including Russia agreed late last year to cut a combined 1.8 million barrels a day of output for six months starting from January, with Iraq’s share set at 210,000 bpd. 

Some analysts have expressed doubts on whether Iraq would deliver its share of the cuts, potentially undermining the drive to rebalance the market and drain inventories bloated by two years of unfettered production that helped to crash prices.

During the months of negotiation that led to November’s OPEC agreement, Iraq had insisted repeatedly that it should be exempted from cuts as it battles the so-called Islamic State insurgency and rehabilitates its oil industry after years of war and sanctions. The country also disputed the data to be used in any discussions, insisting that numbers compiled by OPEC underestimated Iraqi production by about 5%. Iraq ultimately agreed to reduce its output.

The Arab nation was close to implementing its share of the agreed production cuts and would be in full compliance by the end of the month, al-Luaibi said on Jan. 23. The N0.2 OPEC producer had already reduced output by 180,000 barrels a day and would cut another 30,000 bpd soon, the minister said in a Bloomberg television interview.

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