Iraq exports signal that it missed target to lower oil output

Iraq’s crude oil exports were nearly unchanged in January, meaning the nation may have failed to meet its pledge to cut overall output to the lowest level in six years.

OPEC’s biggest producer after Saudi Arabia exported 3.24 million barrels a day in January, which compares with December’s figure of 3.27 million, according to Bloomberg tanker tracking data. That would have left the Arab nation little room to meet its output target of just 3.6 million barrels.

Iraq can consume as much as 650,000 barrels each day in its refineries and often uses oil to run power plants too. Last month, its total daily production came to 3.88 million barrels.

The Organization of Petroleum Exporting Countries and its partners such as Russia—an alliance known as OPEC+—have slashed production since last May in a bid to prop up oil prices in the face of the coronavirus pandemic.

Saudi Arabia criticized Iraq and other members including Nigeria for pumping above their caps and called on them to make amends. Baghdad said the cut to 3.6 million barrels daily, the lowest level since early 2015, would compensate OPEC+ for when it pumped too much.

Riyadh bolstered prices in early January when it announced a unilateral cut of 1 million barrels a day for February and March.

OPEC+’s Joint Ministerial Monitoring Committee will meet on Wednesday to review production levels and discuss the group’s strategy. It’s unlikely to recommend any policy changes ahead of next month’s full OPEC+ meeting.

Crude sales are vital to support government spending in cash-strapped OPEC members such as Iraq. That need to export and raise revenue is often an obstacle to getting the them to abide by their quotas.

Iraq’s state oil marketer SOMO on Monday said it had exported 2.87 million barrels daily last month from fields under its control, which tallies with Bloomberg data. The figure excludes shipments from the semi-autonomous Kurdish region in the country’s north.