No Need for OPEC to Increase Production

The president of the Organization of Petroleum Exporting Countries, OPEC, said Monday the organization is producing enough crude oil, and political situations are to blame for the current high oil prices.

“OPEC has exerted all it can to produce a quantity of oil that is balancing demand, but political situations are governing prices,” Abdul Kareem Luaiby, who is Iraq’s Oil Minister, told reporters in Baghdad.

“[Oil] prices are affected more by political instability than by production matters,” Luaiby said.

OPEC is seeking to achieve a balance in world oil prices, he added.

Oil prices dropped for the third time in four days after Iran agreed to resume talks on its disputed nuclear program, easing fears over a supply disruption. Brent crude prices slipped around $1 in early trading Monday.

Luaiby said he expects Iraq’s oil exports in April to hit 2.3 million barrels a day, or slightly more. Iraq’s March oil exports were at 2.317 million barrels a day, the highest level reached since the U.S.-led invasion in 2003, thanks to the opening of a new sea floating terminal in the Gulf. The second single-point mooring, or SPM, buoy, is expected to be completed within the next few days, Luaiby said. Iraq is planning to install a total of five SPMs in the Gulf, each with an export capacity of 900,000 barrels a day.

Luaiby also said the oil ministry is still studying whether to allow U.S. energy giant Exxon Mobil Corp. to take part in an oil and gas licensing auction scheduled for the end of May due to dispute over a deal it struck with the semi-autonomous Kurdistan region in northern Iraq.

The Kurdistan Regional Government, or KRG, is embroiled in a long and often contentious dispute with Iraq’s central government over the right to issue oil-exploration licenses in the region. Baghdad views those contracts signed by the KRG with international companies as illegal.

Source: Dow Jones & Rigzone


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