Saudi Arabia, the world’s biggest crude exporter, is losing market share to Iraq and Iran as a result of OPEC’s agreement to curb supplies to bolster prices, Rigzone reported, citing Abu Dhabi Investment Authority’s Head of Research, Christof Ruehl.
“If you’re talking about winners, you can count Iran and Iraq,” Ruehl disclosed late April in a conference in Dubai.
As informed on Financial Review, Saudi Arabia, the biggest producer at the Organization of Petroleum Exporting Countries (OPEC), agreed to cut output by 486,000b/d amid the agreement to contain the downturn in oil prices. Meanwhile, Iraq said it would cut 210,000b/d, and Iran was permitted to actually increase output by 90,000b/d to remediate the effects of the sanctions previously imposed on Tehran.
According to Dubai-based consultancy Qamar Energy’s Founder, Robin Mills, Saudi Arabia knew it would lose market shares because Iran’s production was on the rebound. “The Saudis agreed to production cuts at a time when Iranian production was at a high,” he explained.
The kingdom cut production from about 10.5mb/d in December 2016 to as low as 9.87mb/d in January 2017 and 10mb/d in March 2017. Iran’s output rose to 3.8mb/d in January 2017, which is its highest production since April 2010.
Iraq pumped 4.43mb/d in March, down 200,000 barrels for the year.