Iraq has boosted its oil exports as part of the gradual rollback of voluntary production cuts agreed under the OPEC+ alliance, the country’s state oil marketer SOMO confirmed on Sunday.
According to SOMO’s director general, Ali Nizar Al-Shatari, the increase in shipments is set to bring in “hundreds of millions of dollars” in additional revenues at current price levels, Iraq’s state news agency reported. While he did not provide an exact figure for the latest rise, he noted that adding 200,000 barrels per day (bpd) of production would significantly strengthen government finances.
Iraq’s exports averaged 3.38 million bpd in August, according to the oil ministry. For September, SOMO expects the figure to climb to between 3.4 million and 3.45 million bpd.
The boost in Iraqi exports comes after eight OPEC+ members agreed earlier this month to increase their collective output by 137,000 bpd starting in October. This is part of a phased easing of production curbs that the group first implemented years ago to stabilize global oil markets following a historic supply glut and demand crash.
Since April, OPEC+ has been unwinding these voluntary reductions, a process designed to balance rising demand with the need to avoid oversupply.
Iraq has long pressed for greater recognition of its production capacity within OPEC+. Earlier this month, Prime Minister Mohammed Shia al-Sudani urged fellow producers to reconsider Iraq’s export quota, saying the current allocation does not adequately reflect its potential output.
However, Baghdad’s position is complicated. Iraq remains the group’s biggest overproducer, consistently pumping above its agreed quota. OPEC+ has pressured Baghdad to bring production into line, and in April, Iraq submitted plans to make additional output cuts to compensate for earlier overproduction.
The increase in Iraqi crude shipments highlights the delicate balance OPEC+ members face as they seek to capitalize on higher revenues while maintaining discipline within the alliance. For Baghdad, rising exports provide crucial income at a time of budgetary pressures, but also risk further scrutiny from its OPEC+ partners if production strays too far from agreed limits.
By Charles Kennedy for Oilprice.com
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