Iraq appears to be offering higher than the usual amount of spot cargoes on the market for October, oil trade sources in Asia and Europe told Bloomberg, leaving traders wondering how OPEC’s second-largest producer intends to stick to its quota under the OPEC+ deal.
According to estimates from one trader, Iraq is likely offering between 160,000 barrels per day (bpd) and 320,000 bpd more than usual for October, Bloomberg noted.
Additional barrels will not breach Iraq’s quota, an official with knowledge of Iraq’s export plans told Bloomberg.
Iraq, the biggest laggard in the OPEC+ production cut deal, was given time—along with the other laggards—until December 2020 to compensate for previous overproduction, instead of until the end of September as the group had decided initially.
At the same time, however, OPEC’s top producer and de facto leader, Saudi Arabia, lashed out at non-compliant pact members, for trying to “outsmart the market.”
“Attempts to outsmart the market will not succeed and are counterproductive when we have the eyes, and the technology, of the world upon us,” Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said last week.
In the first half of this month, Iraq looks to have ramped up its oil exports even though OPEC’s second-largest producer has promised time and again in recent months that it is committed to complying with the OPEC+ production cuts. Between September 1 and 15, Iraq’s crude oil exports stood at 3.26 million bpd, 8 percent higher than the August average, according to Bloomberg estimates of tanker-tracking data.
It is not certain that the rising trend in September will continue throughout the rest of the month as shipments tend to be unevenly spread through any given month.
Reports emerged on Thursday that Iraq expects OPEC+ to allow it to increase its oil exports beginning next year, but later in the day, Iraq’s oil ministry denied the report that had first appeared in local media.
By Michael Kern for Oilprice.com
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