Iraq Nears 5 Million Barrel Output Capacity But Calls on OPEC to Maintain Its Production Cuts

Venezuela claims its oil output is recovering. File Image / Pixabay

Iraq over the weekend joined the United Arab Emirates, Qatar, and Oman in calling for the Organization of Petroleum Exporting Countries (OPEC) to stick to its output reduction agreement on the grounds it is bringing stability to the market.

Jabar al-Luaibi, oil minister for the Iraqis, also disclosed on Saturday that his country's output capacity is nearing 5 million barrels per day (bpd), but that it will remain in full compliance with the reduction targets - even though it failed to comply with the rules last year until fighting with the Kurds caused production declines to within limits of the OPEC deal.

Speaking at a conference in Abu Dhabi, al-Luaibi acknowledged that "There are some sources here and there indicating that the market is flourishing now, the prices are healthy, so let's talk about terminating the freeze"; however, he added that "This is the wrong judgment, and we don't agree with such a concept.

"The deal should continue: the market now is stabilizing somehow, but it's not yet stable."

As for Iraq's immediate business goals, the oil minister said his ministry will soon close three contracts with international gas companies by mid-2018 to utilize gas from Basra, Maysan, and Nassiriyah southern provinces - and that by 2021 Iraq will "reach zero gas flaring."

Although al-Luaibi's arguments were persuasive and his logic sound, the past record of his country along with those of the UAE and other OPEC members in failing to abide by the OPEC cuts presumably are a cause for concern in some analytical circles.

Equally concerning for those who viewed Venezuela's plummeting oil production as a potential buffer for overproduction from OPEC members and non-members is the disclosure of Manuel Quevedo, the Bolivian republic's oil minister and head of state oil firm PDVSA, that output is rebounding.

Speaking in a television interview, Quevedo stated that "The year 2018 will be one of recovery, after having touched a historic low: we are now near 1.9 million barrels of oil per day, thanks to the workers."

Venezuela claimed it produced 1.834 million barrels per day in November, and Quevedo implied that December's figure, to be published by OPEC on Thursday, will be higher; however, he did not reveal any details and instead discussed how placing power in workers' hands would revive Venezuela's oil industry.

It remains to be seen whether Iraq is serious about its commitment to OPEC or if 2018 will be a repeat of last year, when it along with Iran, Libya, Nigeria, Russia, and other nations failed to comply with the cutback quotas imposed upon them and Saudi Arabia attempted to compensate by boosting its own cutback levels.