Iraq and Saudi Arabia agree to work together to stabilize oil markets

Iraq and Saudi Arabia agreed on Saturday to work together to stabilize oil markets, Iraq’s Oil Ministry spokesman Asim Jihad said, without giving further details, Reuters reported.

During a meeting in Baghdad, Iraq and Saudi Arabia’s oil ministers also discussed an electricity grid connection between the two countries to meet Iraq’s power needs, he said.

The Saudi oil minister Khalid al-Falih also met Iraqi Prime Minister Adil Abdul-Mahdi.

Iraq currently pumps around 4.6 million barrels per day (bpd) of oil, second only to Saudi Arabia in the Organization of the Petroleum Exporting Countries. The bulk of Iraq’s oil is exported via its southern terminals, which account for more than 95 percent of state revenue.

Earlier this week, Iraq’s Oil Minister Thamer Ghadhban said the country plans to increase its oil output and export capacity in 2019, with a focus on the southern oilfields, and is close to reaching a deal with international companies.

The country is targeting production capacity of 5 million bpd in 2019, with average exports expected to reach around 3.8 million bpd.

On Thursday, the United States granted Iraq a 45-day exemption from sanctions which it reimposed on Iran. The exemption will allow Iraq to continue purchasing natural gas electricity from Iran.

“This relief gives Iraq time to start taking steps towards energy independence,” a video published on the U.S. Embassy in Iraq’s official Facebook page said.