Oil minister Ihsan Abdul-Jabar held a phone call with Saudi energy minister Abdul-Aziz Bin Salman, in which both sides confirmed the full commitment of their countries to the OPEC+ agreement.
“Iraq’s level of commitment to the OPEC+ agreement has reached 100 percent since the start of August,” reads a joint statement released on Friday.
“Iraq will reduce an additional 400,000 barrels per day (bpd) during August and September to compensate for the overproduction during May, June, and July,” the statement reads.
Iraq is committed to reduce 850,000 bpd to meet the OPEC+ agreement. However, during the month of August and September the reduction will stop at 1.25 million bpd due to the additional 400,000 bpd which is to compensate for the overproduction, according to the statement.
For years, oil giants have coordinated their production benchmarks through a deal known as OPEC, or the Organization for Petroleum Exporting Countries. OPEC+ also includes non-member countries that export crude oil.
Iraq’s level of commitment to the OPEC+ agreement during July was assessed to be at 90 percent, according to a joint statement by Baghdad and Riyadh last month.
The country’s adherence to the agreement only reached 46 percent during the month of June, and even less during the month of May, Abdul-Jabar said during a televised interview with al-Sharqiya TV last month.
Daily average exports dropped from 2.82 million barrels in June to 2.76 million barrels in July, and are expected to be further reduced in August, according to oil ministry data.
Despite the cuts, Iraq’s oil revenues for the month of July were $3.487 billion - up almost $626 million from June, when revenue was $2.861 billion.
The new numbers look promising for Iraq, which depends on oil income for roughly 90 percent of its annual budget.
When global demand for oil began to shrink as a result of the coronavirus outbreak, Saudi Arabia proposed cutting production to stabilize prices.
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.
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.
OPEC producers and allies agreed to continue the reduction until April next year. Iraq has also pledged to adhere to the agreement.
