Iraqi oil minister says Saudi output cut helps stabilize market

Iraqi oil minister Ihsan Abdul Jabbar told state TV in an interview that Saudi Arabia’s voluntary output cut of 1 million bpd helps stabilize the market, and he expected steady oil prices that should reach around $57 per barrel in the first quarter.

Oil minister said Iraq is in “heavy talks” with OPEC and allied oil producers to allow Iraq to postpone compensating for earlier overproduction.

“OPEC members and allies were understanding to Iraq’s situation and its financial crisis,” oil minister said in an interview with state TV.

Abdul Jabbar said requesting delaying compensation of overproduction doesn’t not mean Iraq would evade complying with its commitment to OPEC+ cut deal and will abide by cutting its production to preserve market stability.

Non-commitment of Iraqi Kurdistan to its share of the production cut is the main reason of reaching a recent low compliance of 79% of pledged cuts under the OPEC+ deal, said Ihsan Abdul Jabbar.

“We reached an initial agreement with Kurdish region to cut their production by 20 percent or around 80,000 barrels per day but they didn’t commit and kept production at 430,000 barrels,” said oil minister.

OPEC+ cut supply by a record 9.7 million bpd last year and is pumping an extra 500,000 bpd in January under a plan to unwind the curbs gradually. Most producers will hold steady in February and Saudi Arabia is cutting output by 1 million bpd next month and March.

On Tuesday, Brent crude rose 36 cents and settled at $56.42 a barrel.

By Ahmed Rasheed;

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