Iraq Pledges to Limit Oil Production to 4 Million BPD in Commitment to OPEC, 13 FEB

Iraq Pledges to Limit Oil Production to 4 Million BPD in Commitment to OPEC

In a move that underscores its commitment to the Organization of the Petroleum Exporting Countries (OPEC), Iraq, the cartel's second-largest producer, has pledged to limit its oil production to no more than four million barrels per day (bpd). The decision follows the implementation of a second voluntary cut in December, as announced by Oil Minister Hayyan AbdelGhani.

Iraq's Oil Production: A Balancing Act

As the world grapples with energy dynamics, Iraq finds itself walking a tightrope between adhering to OPEC decisions and meeting its economic needs. The country's current crude oil exports hover between 3.35 million and 3.4 million bpd, a figure that aligns with the new production cap.

The decision to limit production is not without its challenges. Iraq's economy is heavily reliant on oil revenues, which account for over 90% of the country's income. This makes striking a balance between OPEC commitments and economic stability a delicate task.

Resolving Disputes: The Road to Resuming Northern Oil Exports

The path to resuming oil exports from the Kurdistan region in northern Iraq is fraught with challenges. A dispute with international oil companies operating in the area has led to a halt in exports, which previously stood at around 450,000 bpd.

Talks are currently underway to resolve the impasse. The resumption of exports from the Kurdistan region hinges on the resolution of production-sharing contracts and negotiations with companies in the region. The shift from production-sharing contracts to a profit-sharing model is seen as a crucial step towards ending the deadlock.

A Test of Commitment: Iraq and OPEC

Iraq's commitment to OPEC decisions is being put to the test. The country's pledge to limit production to four million bpd is a significant step towards adhering to the OPEC+ agreement. This agreement, which involves several OPEC+ producers, aims to stabilize the global oil market.

The decision to implement a second voluntary cut in production is a clear indication of Iraq's dedication to the agreement. However, the true test lies in the country's ability to balance its commitment to OPEC with its economic needs.

In a world where energy dynamics are constantly shifting, Iraq's oil production decisions will have far-reaching implications. As the country navigates these complex waters, its commitment to OPEC and its ability to resolve disputes will be key factors in determining its future in the global oil market.

As of February 12, 2024, Iraq continues to stand by its commitment to OPEC decisions, with Oil Minister Hayyan AbdelGhani reaffirming the country's pledge to limit production to not more than four million barrels per day.

Key Points:

Iraq has committed to OPEC decisions and will limit its oil production to no more than 4 million bpd.

Current crude oil exports range between 3.35 million and 3.4 million bpd.

Talks are underway to resolve a dispute with international oil companies in Iraqi Kurdistan and resume northern oil exports.

Resumption of exports from the Kurdistan region is dependent on the resolution of production-sharing contracts.

Iraq's commitment to OPEC decisions is crucial for the stability of the global oil market.