OPEC allows Iraq to increase production to 4.5 million barrels per day
Iraq’s representative to OPEC said the organization had agreed to the country increasing production to 4.5 million barrels of oil per day (bpd) from June, the agency reported on Saturday. state press (INA).
There will be further production increases of 50,000 bpd in each of July, August and September, the INA added, citing statements from Muhammad Saadoun.
Iraq pumped 4.43 million barrels per day (bpd) of oil in April, 16,000 bpd above its OPEC+ quota for that month, according to data from state-owned marketing firm SOMO seen by Reuters on May 11.
Iraq’s March production was impacted by field outages in the south, pushing its output 222,000 bpd below the production cap for that month.
Like several other OPEC members, Iraq is struggling to pump more oil at a time when global supply is already tight and prices are soaring.
Nearly half of the global oil supply shortfall projected by OPEC and its allies – a group known as OPEC+ – is due to Nigeria and Angola, due to several factors including the Exit of Western oil majors from African projects.
OPEC+ produced 1.45 million barrels per day (bpd) below its production targets in March, as Russian production began to decline following Western sanctions, a report showed. producer alliance report seen by Reuters.
Russia produced about 300,000 bpd below its March target of 10.018 million bpd, based on secondary sources, the report said.
OPEC+ compliance with production cuts rose to 157% in March from 132% in February, data shows, the highest since the group introduced record production cuts of around 10 million bpd in May 2020 to counter the impact of the pandemic on demand.
OPEC+ agreed last month to another modest monthly increase in oil production of 432,000 bpd for May, resisting pressure from major consumers to pump more.
As the group unravels production cuts, several producers, notably from West African countries struggling with underinvestment and an exodus from international energy companies, are failing to keep up.
At its meeting last month, OPEC+ also dropped the Paris-based IEA as one of its secondary sources, replacing it with consultants Wood Mackenzie and Rystad Energy.
Oil prices rose about 4% on Friday as U.S. gasoline prices hit a record high, China appeared poised to ease pandemic restrictions and investors feared supplies would falter. would tighten if the European Union banned Russian oil.
Brent crude futures rose $4.10, or 3.8%, to settle at $111.55 a barrel. U.S. West Texas Intermediate (WTI) crude rose $4.36, or 4.1%, to settle at $110.49.
U.S. gasoline futures hit a record high after stocks fell last week for a sixth straight week.
That pushed the gasoline crack spread — a measure of refining profit margins — to its highest level since hitting a record high in April 2020 when WTI ended in negative territory.
Oil prices have been volatile, supported by worries that a possible EU ban on Russian oil could tighten supplies, but under pressure from fears that a resurgence of the COVID-19 pandemic could reduce the global demand.
This week, Moscow imposed sanctions on several European energy companies.
In China, authorities have pledged to support the economy and city officials have said Shanghai will begin easing coronavirus-related traffic restrictions and opening stores this month.