Iraq slashes oil production to meet OPEC+ production quota
ERBIL, Kurdistan Region - Iraq’s oil ministry announced that it will slash oil production by nearly 200,000 barrels per day to meet an OPEC+ alliance production quota.
“On the Republic of Iraq’s commitment to the decisions of the OPEC+ regarding oil production adjustments, and in line with what was agreed upon during the most recent visit of the Secretary General of OPEC to Baghdad, we confirm that Iraq has reduced its oil exports to 3.3 million barrels per day, starting from 27 August 2024,” read a statement from the Iraqi oil ministry.
The ministry also said that it will also reduce domestic consumption.
Iraq’s three-year budget, approved in June 2023, requires that the oil ministry to sell 3.5 million barrels of oil per day.
According to an agreement with OPEC+, Iraq is allowed to produce four million barrels of oil per day, of which 3.3 million barrels are exported and the remaining amount is used domestically. However, in the early months of this year, Iraq produced exceeded the limit, with the surplus reaching over 1.4 million barrels per day.
“These reductions will continue during the coming months to ensure that production remains within required levels. This is in addition to compensating for the additional quantities that were produced during the previous months,” the statement added.
Iraq and OPEC+ countries agreed on Thursday to prolong the cuts of $2.2 million barrels of oil per day until the end of November, before gradually phasing out the cuts on a monthly basis until from December 2024 to November 2025.
In compliance with OPEC+ production cuts, Iraq announced in April 2023 that it was voluntarily slashing oil production by 211,000 barrels per day
The cuts have been in place since ministers from the 13-nation OPEC group and Russian-led exporters met in Vienna in October 2022 and agreed to slash oil production by two million barrels per day.
Western nations, especially the United States, have repeatedly accused OPEC of manipulating the market and driving up oil prices. Washington has called on member states such as Saudi Arabia to reconsider decisions to cut production.
Oil prices rose following Russia’s invasion of Ukraine in February 2022 and the US repeatedly urged members of the oil cartel to increase their production in order to stabilize the market.
Oil is Iraq’s main source of income, relied on to cover government costs and pay civil servant salaries. The country pocketed $97.5 billion from oil sales in 2023, down from 2022’s record-setting $115 billion.
Currently Iraq has 145 billion barrels of proven oil reserves, according to the World Bank.
The ministry also said that it will also reduce domestic consumption.
Iraq’s three-year budget, approved in June 2023, requires that the oil ministry to sell 3.5 million barrels of oil per day.
According to an agreement with OPEC+, Iraq is allowed to produce four million barrels of oil per day, of which 3.3 million barrels are exported and the remaining amount is used domestically. However, in the early months of this year, Iraq produced exceeded the limit, with the surplus reaching over 1.4 million barrels per day.
“These reductions will continue during the coming months to ensure that production remains within required levels. This is in addition to compensating for the additional quantities that were produced during the previous months,” the statement added.
Iraq and OPEC+ countries agreed on Thursday to prolong the cuts of $2.2 million barrels of oil per day until the end of November, before gradually phasing out the cuts on a monthly basis until from December 2024 to November 2025.
In compliance with OPEC+ production cuts, Iraq announced in April 2023 that it was voluntarily slashing oil production by 211,000 barrels per day
The cuts have been in place since ministers from the 13-nation OPEC group and Russian-led exporters met in Vienna in October 2022 and agreed to slash oil production by two million barrels per day.
Western nations, especially the United States, have repeatedly accused OPEC of manipulating the market and driving up oil prices. Washington has called on member states such as Saudi Arabia to reconsider decisions to cut production.
Oil prices rose following Russia’s invasion of Ukraine in February 2022 and the US repeatedly urged members of the oil cartel to increase their production in order to stabilize the market.
Oil is Iraq’s main source of income, relied on to cover government costs and pay civil servant salaries. The country pocketed $97.5 billion from oil sales in 2023, down from 2022’s record-setting $115 billion.
Currently Iraq has 145 billion barrels of proven oil reserves, according to the World Bank.