In this list
Oil

Iraq says proposal to deepen OPEC+ cuts to 1.6 mil b/d to be discussed in Vienna

Commodities | Oil | Natural Gas

War in Ukraine

Energy | Oil | Refined Products | Jet Fuel

Jet Fuel

Petrochemicals | Oil | Energy Transition

Trainings courses at Global Carbon Markets Conference

Agriculture | Grains | Energy | LNG | Natural Gas | NGL | Natural Gas (European) | Oil | Crude Oil | Metals | Non-Ferrous | Steel | Petrochemicals | Aromatics | Polymers | Shipping | Containers | Dry Freight | Tankers

Infographic: Sanctions on Russian commodities tracker

Agriculture | Biofuels | Energy | Energy Transition | Emissions | Carbon | Natural Gas | Natural Gas (North American) | Oil | Crude Oil | Refined Products | Energy Oil | Bunker Fuel | Fuel Oil | Shipping | Marine Fuels

Commodity Tracker: 5 charts to watch this week

Iraq says proposal to deepen OPEC+ cuts to 1.6 mil b/d to be discussed in Vienna

Highlights

Any agreement would require unanimous consent

Not all members on board with deeper cuts

Minister says KRG deal to help Iraq's quota compliance

Vienna — Iraq, which has consistently violated its oil production quota under the OPEC+ supply accord, is urging other members to support deepening the group's output cuts.

The current 1.2 million b/d production cut agreement, which runs through March, should be increased to 1.6 million b/d, oil minister Thamir al-Ghadhban told reporters on arrival in Vienna ahead of the OPEC+ meetings Thursday and Friday.

Merely rolling over the cuts "is not enough to stabilize the market," Ghadhban said. "There is a proposal to add a further 400,000 b/d, [but] this is not final. This is subject to agreement between OPEC+."

Any deal would require unanimous approval among the 24-country coalition, a consensus that may be difficult to achieve, analysts say.

The OPEC+ coalition's delegate-level Joint Technical Committee met earlier Tuesday, where only scenarios of an extension at current quota levels were reviewed, a source familiar with the deliberations told S&P Global Platts.

Russia, in particular, has said it sees no need to make any decision at this week's meetings, preferring to wait until closer to the agreement's March expiry to announce any changes, if needed.

Russia is the main non-OPEC participant in the deal, and OPEC has taken great pains to keep it on board to increase the coalition's market clout, despite its lackluster quota compliance.

"Russian producers are already struggling with maintaining their compliance with the current agreement, particularly now that the cold season is approaching," said Sara Vakhshouri, who heads the consultancy SVB Energy. "Further cuts from current agreed level at this meeting are not easy for Russia to commit to."

But Ghadhban said that deeper supply curbs would help address "slow demand [growth] expected for next year," and that any agreed cuts would be shared among all members. A proposed 1.6 million b/d cut was discussed at the OPEC+ coalition's meeting in December 2018, but some members had objected, resulting in the current 1.2 million b/d cut accord.

Ghadhban dismissed any potential objections by Russia, saying that its energy minister, Alexander Novak, has said he hopes for a "constructive" meeting.

"Nobody is an obstacle," Ghadhban said.

As for Iraq's own compliance, the minister said it was improving. Iraq, OPEC's second largest producer, has not pumped below its quota of 4.51 million b/d since April, according to its own figures reported to OPEC. It has come under pressure from other members to bring its output in line with its quota and stop free-riding on the efforts of others.

Ghadhban said current production was hovering around 4.60 million b/d.

"We have delivered most of our cuts," he said.

KRG DEAL

Recent deadly protests in Iraq's southern provinces near key oil fields and facilities have not impacted production levels, he added.

Government sources and officials with oil companies operating in Iraq told Platts that production has rebounded from a brief disruption in November when protesters blocked roads that forced the shut-in of the 30,000 b/d Qayyarah Field.

A recent deal the federal government reached with the semi-autonomous Kurdistan Regional Government, under which the KRG will cap production at 450,000 b/d and transfer 250,000 b/d of that to federal authorities, will help with Iraq's compliance, Ghadhban said.

KRG output has averaged around 450,000 b/d to 500,000 b/d in recent months, according to Platts estimates.

"If the KRG is allowed to produce and export without a cap then it will be very difficult for a federal minister to commit himself to a specific quota," Ghadhban said.

Baghdad and Erbil have been at loggerheads over oil revenues, with the KRG insisting on a larger share of Iraq's federal budget, while the federal government laid claims to about half of the crude that the KRG has been exporting.

The minister insisted that the agreement with KRG will be valid even after the departure of Prime Minister Adil Abdul Mahdi, who tendered his resignation on Friday.

"We are still in charge, and we are now finalizing the budget law for 2020," Ghadhban said. "There have been discussions and, yes, I could say firmly that we have agreed so far. It is still valid and will be part of commitment of the regional and federal governments."

--Staff, newsdesk@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com