IRAQ DATA: Oil ministry says exports steady in Sept amid doubts about compensation cuts

Dubai — Iraq's federal oil exports remained nearly steady in September compared with August, the oil ministry said Oct.1, signaling OPEC's second largest producer may have failed again to implement compensation cuts to make up for overproduction between May and July.

Federal oil exports averaged 2.613 million b/d, up from 2.597 million b/d in August, ministry figures showed. The ministry did not publish production figures.

Iraq central and southern exports reached 2.5 million b/d in September, the same level in August, while exports of Kirkuk oil via the Turkish port of Ceyhan stood at 104,000 b/d, compared with 97,000 b/d in August. Oil trucked to Jordan in September reached 8,500 b/d in September, compared with nil exports in August.

Iraq raked in $3.167 billion in September, selling its oil at an average price of $40.407/b, compared with $3.49 billion in August at $43.384/b.

Iraq had pledged to cut an extra 400,000 b/d in each of August and September to make up for overproduction in May through July in a plan endorsed by Saudi Arabia and its Gulf allies. Its August and September quota is 3.804 million b/d, excluding voluntary extra cuts to compensate for overproduction.

That would put Iraq's effective quota at 3.404 million b/d.

August output

Iraq lowered its crude oil output in August to 3.578 million b/d, official figures showed Sept. 10, but remained above the 3.404 million b/d it had pledged to hold production to under the OPEC+ supply accord.

The production figure, provided by state oil marketer SOMO to S&P Global Platts, includes 3.122 million b/d of federally controlled output and 456,000 b/d from the semi-autonomous Kurdish region.

The breakdown shows that Iraq's quota breach stems largely from the Kurdistan Regional Government's unwillingness to bring its production down in line with the deal.

Baghdad and Erbil had agreed to share the OPEC + production cuts proportionally, but the SOMO figures show the KRG achieved just 79% compliance with its quota, while the federal government hit 102%.

SOMO said total August crude exports were 3.023 million b/d, of which 2.597 million b/d were from the federal government and 426,000 b/d were from the KRG.

Saudi pressure

Saudi energy minister Prince Abdulaziz has made quota compliance a top priority as co-chairman of a key OPEC+ monitoring committee with Russian energy minister Alexander Novak. The Joint Ministerial Monitoring Committee, which is convening monthly, is set to meet online Oct. 19.

OPEC and its allies, including Russia, rolled over their 9.6 million b/d in collective production cuts through July to help bolster the market as it emerges from the depths of COVID-19. As of Aug. 1, their total cuts will be 7.7 million b/d as the coalition begins to ease output curbs.