Saudi Arabia's Price Increase Could Indicate Oil Price Floor
The oil exports of Iraq's semi-autonomous region of Kurdistan are not subject to the extension of OPEC's production cuts, Iraq's Oil Minister Jabbar al-Luaibi told Kurdish media network Rudaw during the OPEC meeting in Vienna on Thursday.
According to OPEC delegates, the cartel agreed today to extend the current output cuts for nine months until March 2018.
"The reduction doesn't include the Kurdistan Region," Luaibi told Rudaw. "But we will be trying to include the Kurdistan Region in the reduction of its oil. I have plans to visit the Kurdistan Region and discuss this with them after my return to Iraq."
The region of Kurdistan in northern Iraq is estimated to have 45 billion barrels of oil reserves. Exports from the fields in northern Iraq held by the Kurdistan Regional Government (KRG) stand at around 600,000 bpd. Most of the exports from landlocked Kurdistan are being carried out via the Kirkuk-Ceyhan pipeline to the Turkish Mediterranean coast.
Earlier today, Iraq's Al-Luaibi said that the best option to bring the oil market back to balance was extending the production cuts by nine months.
OPEC's no. 2 Iraq was thought to be one of the biggest stumbling blocks to a nine-month output cut extension, but on Monday OPEC's no.1 Saudi Arabia and Iraq said that they had agreed that the cuts need to be extended by another nine months.
Related: Is Canada's Oil Production Ready For A Resurgence?
Iraq was the last holdout to OPEC reaching the initial deal in November, when it first argued for exemption, due to funds need to fight ISIS, then disputing the so-called secondary sources that OPEC uses to calculate the single producers' output levels and proposed cuts.
Then, even though it signed up to the initial six-month production cut deal, Iraq has been the biggest overproducer, and has so far failed to cut as pledged every month between January and April, according to OPEC data.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More