Oil exports from Iraq’s southern terminals have fallen so far in January, according to loading data and an industry source, a sign that the Organization for Petroleum Exporting Countries’ (OPEC) second-largest producer is following through on the group’s decision to cut output, Reuters reported.
Mid January, Iraq’s Oil Minister, Jabar Ali al-Luaibi, said that his country cut exports by 170,000b/d and will cut a further 40,000b/d during the month. At the time of the statement, Iraq’s OPEC governor, Falah al-Amri, told reporters that Iraq’s oil exports stand at 3.077mb/d, according to Hellenic Shipping News.
Baghdad’s initial request to be exempt from the deal, plus loading programs pointing to continued high Iraqi exports, have added to skepticism that the country would comply with the output cuts. Iraq is supposed to curb production by 210,000b/d. However, Exports from southern Iraq in the first 16 days of January have averaged 3.25 million barrels per day (bpd), according to shipping data tracked by Reuters and by an industry source. That is down from Iraq’s own figure of 3.51 million bpd in all of December, a record high.
The OPEC cut started on Jan. 1. Although it is only a mid-way through January, the drop in exports lends support to comments from Iraqi officials that Baghdad will stick to the accord. Compliance by producers with the deal will be a key influence in 2017 on oil prices, which at $56 a barrel are about half their level of mid-2014. A committee of OPEC and non-OPEC ministers to monitor the issue is late January.