ERBIL, Kurdistan Region — Iraq will adhere to oil production cuts set by the intergovernmental oil organization OPEC, Iraq’s Minister of Oil said in a statement on Sunday. “Iraq is committed to the production cut agreement, and the total output of Iraq in the coming days will be less than what has been produced in the past months,” Minister Thamer Ghadhban, who will head the Iraqi delegation to the meeting, said according to a Ministry of Oil statement. On Thursday, OPEC, plus non-member major oil producers like Russia, will meet in a bid to consider oil cuts in a bid to shore up oil prices. Iraq, as the second largest producer within OPEC, is part of the deal, and adhered to the similar agreement that was reached last July between OPEC and Russia. Ghadhban, alongside his Iraqi delegation, will also participate in the meeting. Iraq has had higher production than its commitment to the deal in the past months because domestic demand from electricity production stations increased during the summer. The cut in production will start in October as refineries will enter the maintenance stage and domestic demand decreases, according to Ghadhban. Iraq’s ability to adhere to the oil cuts will be stronger is due to “serious discussions” that have reached “advanced stages” with the Kurdistan Regional Government (KRG), to organize and produce the Kurdistan Region’s oil in coordination with the Iraqi federal government “We hope to reach unified policies and plans for there to be a big role for the Iraqi oil marketing company SOMO,” said Ghadhban in the statement, referring to the State Organization for Marketing of Oil (SOMO) - an Iraqi state-run oil company. It is not clear how many barrels of oil the Kurdistan Region produces and exports, but the independent oil sales of Kurdistan have always been a sticking point between both governments. Currently, according to Iraq’s 2019 budget bill, the KRG has to handover 250,000 of oil to the Iraqi government in exchange for the region’s share of the federal budget. That has not happened yet, however. The independent sales of the Kurdistan Region mean that more oil from Iraq has been exported, despite the fact that the country has adhered to the past OPEC agreement in its southern and central fields. In case of an Erbil-Baghdad agreement, it will “help Iraq” preserve its commitment to the OPEC deal, according to Ghadhban. Iraq wants “stability in the market and for no acute fluctuations that would affect the economies of producing countries, especially Iraq, be affected,” he said. Iraq’s Prime Minister Adil Abdul-Mahdi spoke over the weekend with the powerful Saudi crown prince Mohammed Salman, with both sides agreeing on a stable oil market.
