Iraq to curb oil exports to compensate for exceeding OPEC+ quota

OPEC’s second-largest producer Iraq pumped significantly more in January and February than an output target established in January when several members of the Organization of the Petroleum Exporting Countries and allies (OPEC+), including Iraq, agreed to support the oil market.

OPEC+, whose de facto leader is Saudi Arabia, has highlighted the importance of compliance with the pledged cuts even as oil prices have rallied this year. Brent crude on Monday traded above $86 a barrel, the highest since November.

Iraq’s oil ministry said in a statement on Monday it was committed to voluntary cuts agreed with OPEC+, which limit it to producing 4 million bpd.

Initially in place for the first quarter, the voluntary cuts have since been extended to the end of June.

Secondary sources, which provide data on OPEC+ production, reported Iraq’s output at 4.2 million bpd in February.

Of this, Iraq exported an average 3.43 million bpd in February, the oil ministry said earlier this month, meaning Monday’s pledge amounts to a cut of 130,000 bpd from last month’s rate.

Iraq said in February it would review its production and address any excess output above its OPEC+ cuts.

That statement followed a visit to Iraq by Saudi Energy Minister Prince Abdulaziz bin Salman, during which Iraqi Prime Minister Shia al-Sudani told him it was important for the two countries to align their views to maintain stability in the oil market.

The OPEC+ voluntary cuts in place until June are the latest in a series of curbs by the group since late 2022 to support the market in the face of expectations weak economic growth will limit oil demand when supply is rising from producers beyond OPEC+.