Iraq and some other oil producers taking part in global output cuts think they should reduce supply by an additional 1 percent to help re-balance the market, according to Iraqi Oil Minister Jabbar al-Luaibi. Some also favor extending cuts until the end of 2018, he said.
Producers are talking about what to do next regarding the cuts, al-Luaibi said at a conference in the emirate of Fujairah in the United Arab Emirates. There is “no firm decision yet” on further cuts or any extension of the current reductions, he said.
OPEC countries and major suppliers including Russia agreed to trim output by 1.8 million barrels to clear a global glut, led partly by U.S. shale production. They extended their accord through the first quarter, and ministers from Saudi Arabia, Venezuela, the United Arab Emirates and Russia have said producers may consider prolonging the cuts further. Benchmark Brent crude has slid about 2 percent this year and is currently trading at less than $56 a barrel.
OPEC’s decreases in output “are going OK,” while non-OPEC compliance with the targets is less than that of the group, though this is to be expected, al-Luaibi said. Oil prices and the global market are improving, and Iraq sees a “positive trend” in crude markets, he said. Oil demand will continue to increase in the coming two to three years, he said.
Iraq, OPEC’s second-biggest producer, is exceeding its targeted reduction of 210,000 barrels a day by cutting 270,000 barrels a day, al-Luaibi said. Iraq is now pumping 4.32 million or 4.35 million barrels a day, he said. Before the cuts started in January, the country was pumping 4.565 million barrels a day, he said.