Iraq balks at production cuts, cites war against IS

Iraq balked at cutting its levels of crude oil production following a meeting of Gulf producers and Russia over the weekend, raising fresh doubts among some market participants that the Organisation of Petroleum Exporting Countries would be able to decide on an output cut when it next met.

Speaking on Sunday, Iraqi oil minister Jabber Al-Luaibi said his country was currently pumping over 4.7m barrels a day of oil and not the 4.2m b/d which OPEC had recently estimated.

“We are with OPEC policy and OPEC unity, but this should not be at our expense,” Al-Luaibi said.

Al-Luaibi's remarks turned Iraq into the fourth member, after Iran, Nigeria and Libya, who had asked to be exempted from curbs on its output.

The need to finance the war against Islamic State was the reason aduced by Iraq for asking for an exemption.

However, losses were capped by Iran's deputy oil minister Amir Hossein Zamaninia saying Tehran would encourage other OPEC members to join an output freeze.

Also on Sunday, the Russian Federation refused to commit to a coordinated reduction by all the world's main producers.

Following talks with Gulf Arab representatives, in Riyadh, on Sunday, Russian energy minister Alexander Novak said his country cannot yet say whether it will participate in any reductions and that it was studying various scenarios.

“We see reasons to take steps to balance the market in coming months to bring investments back and reduce volatility.

“We discussed issues related to levels of limiting oil production by Russia and by other countries that may join the agreement, but it’s too early to tell the concrete figures because the process of finalizing positions is going on,” Novak said.

As of 1137 BST front month Brent crude oil futures were lower by 0.04% to $51.76 per barrel on the ICE.