Baku, Azerbaijan, Apr. 24
By Leman Zeynalova – Trend:
Iraq is unlikely to be exempt from the extension of OPEC output cut deal in May, Spencer Welch, director of the oil markets and downstream team in the London-based IHS Markit, told Trend Apr. 24.
Earlier, the leader of Iraq’s Shiite ruling coalition Ammar al-Hakim told Reuters that the country may seek to be exempt from the OPEC deal and ask to boost its own output. Hakim noted that Baghdad could ask exemption from taking part in the supply curbs as the nation needs its oil income to fight the “Islamic State” (IS, aka ISIS, ISIL or Daesh) terrorist group.
However, Welch believes Iraq may be saying this to try to strengthen negotiating position at the meeting.
“All cutters have benefited from the deal, because market price increase has more than paid for the reduced production,” added the expert.
Welch also believes that Saudi Arabia will not tolerate a deal, “where some get a free ride”.
In December 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices.
Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce the output by 558,000 barrels per day starting from Jan. 1, 2017 for six months, extendable for another six months.
OPEC agreed to slash the output by 1.2 million barrels per day from Jan. 1 with top exporter Saudi Arabia cutting as much as 486,000 barrels per day.
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