Baku, Azerbaijan, Nov. 29
By Leman Zeynalova – Trend:
Reducing the oil production could be more positive for Iraq, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY and SVP MEA-Risk, told Trend Nov. 29.
He was commenting on the recent remarks by Iraqi prime minister on the country’s readiness to cut the oil output.
Earlier, Iraq’s Prime Minister Haider al-Abadi told reporters that the country is willing to cut its crude oil output as part of OPEC's plan to reduce global supply and boost crude prices.
"What we lose in lowering production we will gain in oil revenues," he said. "Our priority is to raise the price of a barrel of crude."
Widdershoven says the statement needs to be assessed as being real, especially after that Iran and Russia directly have indicated to be very optimistic about the potential of reaching a deal in OPEC’s upcoming Vienna meeting Nov. 30.
He believes that Iraq's overall position on this issue should be assessed on two merits: 1) Iraq will need full production based on its ongoing battle with the “Islamic State” (IS, aka ISIS, ISIL or Daesh) and its highly oil-dependent economy and revenue bases; 2) Iraq's bargaining position is very weak, as it has been for decades outside of the main OPEC production discussions due to Saddam Hussein.
“Looking at investment needs and potential revenues, a higher oil price will in the end be more positive for Iraq than to hit out at its other OPEC members, while oil prices will stay low,” added the expert.
In September, OPEC producers agreed during the informal meeting in Algiers to cut down the oil output to 32.5 million barrels per day (bpd) from current production of 33.24 million bpd.
How much each country will produce is to be decided at the next formal meeting of OPEC on Nov.30 in Vienna.