Iraq may seek oil output exemption to fight Daesh

Iraq may seek exemption from a deal between oil exporters to reduce global supply in order to support crude prices and ask to boost its own output, the leader of the nation’s Shia ruling coalition

Image of Ammar Al-Hakim delivering a speech on 21 October 2016 [Hamed Malekpour/Wikipedia]

OPEC is due to meet in May to decide on an extension of supply curbs decided late last year to lift prices.

Speaking in Cairo, Al-Hakim, who is the president of the National Alliance, a coalition of the main Shi’ite political groups including Prime Minister Haider Al-Abadi’s Dawa party, said that Baghdad could ask to be exempted from taking part in the supply curbs as the nation needed its oil income to fight Daesh.

Iraq is OPEC’s second-largest oil producer, after Saudi Arabia, with an output of 4.464 million barrels per day (bpd) in March, a reduction of more than 300,000 bpd on levels before OPEC cuts were implemented at the start of the year.

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Baghdad reluctantly agreed to take part in the current agreement to restrain output, which was agreed at the end of last year. The bulk of the cut was shouldered by Saudi Arabia, while Iran was allowed to increase its output to levels before it was hit by Western sanctions.

Earlier this month, OPEC Secretary General Mohammed Barkindo said that he was assured Iraq would comply with the OPEC agreement to cut oil supplies in order to bolster crude prices.