ERBIL, Kurdistan Region — Iraq’s oil revenues rose by nearly half in May compared to April, according to oil ministry figures published Friday, marking a notable improvement to the slumping industry. A near $700 million revenue increase for the month was reported by the government, as oil companies cut down on output costs, as well as saw fuel demand increases with the easing of coronavirus lockdown measures. The new numbers look promising for Iraq, a country that has experienced a plummet in oil revenue in recent months, and depends on the income for roughly 90 percent of its annual budget. Oil revenues for the month of May were $2.09 billion, with an average export of 3.21 million barrels per day (bpd). This marks a significant rise on April figures, which saw revenues of $1.42 billion, with an average export of 3.43 million bpd. A barrel of Iraqi oil sold for an average of $21.01, up from $13.80 in April. March and April saw a month on month revenue fall, resulting from a global oil price collapse which was sparked by a standoff between oil producing rivals Saudi Arabia and Russia, as a worldwide decline in demand for fuel under the coronavirus lockdown. For years, the oil giants coordinated their production benchmarks through a deal known as OPEC+. When global demand began to shrink as a result of the outbreak, Saudi Arabia proposed cutting production to stabilize the price. Russian oil companies, struggling to find buyers under US sanctions, refused to cut production. Saudi Arabia responded by flooding the market with cheap oil to strong-arm the Russians. For smaller oil producing nations like Iraq, the standoff had proved disastrous, being already locked in a political crisis and battling an outbreak of coronavirus. Moscow and Riyadh reached a deal on April 12 to cut oil production by 9.7 million bpd – equivalent to 10 percent of the world’s daily supply – for May and June. Global demand remains lower than average, however, as a result of the pandemic and the economic downturn it has sparked. OPEC producers and allies agreed to continue the reduction until April next year. Iraq has also pledged to adhere to the agreement.
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