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Uncertainty Looms Large Over Latin American Oil

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Iraq Oil Exports Edge Lower So Far in March

Iraq Oil

Exports from southern Iraq in the first 14 days of March have averaged 3.25 million bpd, according to Reuters shipping data. According to official data, the country’s southern terminals have edged even lower so far this month, to 3.20 million barrels per day, although still not as much as expected.

Despite its commitment to the OPEC’s decision to cut production to counter a global glut, Iraq pumped 4.57 MMbopd in February, and plans to boost output later in the year, in what could potentially raise questions over the country's compliance with OPEC production cuts.

Iraq’s Oil Minister Jabar al-Luaibi said that country plans to increase output to 5 MMbopd by the end of 2017.

Iraq agreed in November to cut 210,000 bpd from its crude oil output beginning in January, taking as baseline an average daily of 4.56 million bpd. In January, however, Iraq’s daily average production was 4.47 million bpd – nowhere near the 4.35-million-bpd target set in the agreement.

Though OPEC has managed to achieve a high standard of compliance, it has mostly been due to the oversized cut by Saudi Arabia. Meanwhile, the actions and statements of the Iraq and Iran, second and third largest producers in OPEC, are throwing worrying signs at the oil bulls. Like Iraq, Iran is also keen on increasing its production to 5 million bpd by 2021.

Earlier this month, Minister al-Luaibi said that the country’s compliance rate with the OPEC crude oil production cut agreement had reached 85 percent. Al-Luaibi also told media that Iraq will be able to pump 5 million barrels daily in the second half of the year, suggesting that it won’t support a production cut extension.

Related: Is Kurdish Oil A Gamble Worth Taking?

Iraqi oil exports are also on the rise, although the central government in Baghdad is not the only one responsible for this. In February, total Iraqi oil exports reached 3.85 million bpd, up 1 percent on a monthly basis, but most of the rise came from the Kurdistan autonomous region, with increase of 9 percent for last month.

There were brief stoppage in flows earlier this month when Kurdish forces stormed an oil facility in protest at the Iraqi government's oil policy.

By Damir Kaletovic for Oilprice.com

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