Baghdad: Iraq sees a need to increase crude exports and says it’s ready to ship more as soon as Opec agrees how members will share a collective supply boost, according to the acting director-general of the state-run Oil Marketing Co.
Exports will be close to 3.595 million barrels a day this month, Alaa Al Yasiri said Wednesday in an interview in Baghdad. That would be a record, he said, up from 3.54 million barrels a day in July.
The Organisation of Petroleum Exporting Countries and allies agreed two months ago to increase oil production, with Saudi Arabia and Russia saying about 1 million barrels a day will be added to the market. But they didn’t detail how the production increase would be split between Opec and non-Opec nations. A committee of Opec and allies is scheduled to meet in Algeria next month to discuss allocations.
“If decisions are made that the market is in need of quantities — and our conviction as marketer is that the market is in need of quantities — then Iraq will have the ability to raise,” Al-Yasiri said. Saudi Arabia and Russia have recently increased crude supplies but it hasn’t affected the market because customers needed the extra barrels, he said.
Analysts have been uncertain about Iraq’s ability to raise production quickly, amid investment constraints and hold-ups that have seen Royal Dutch Shell Plc exit one of the country’s biggest oil projects.
While the International Energy Agency estimates that Iraq sits on about 240,000 barrels a day of unused capacity, much of this is offline because of a political dispute between the central government in Baghdad and Kurds in the north, and restarting it would require some kind of compromise.
An export increase from Iraq could have an impact on relations with its neighbour and fellow Opec member Iran.
The Islamic Republic is seeing customers abandon its crude in the face of renewed US sanctions, and analysts consider Iraqi supplies as a suitable replacement because of its similar characteristics. But Iran has criticised fellow producers seeking to take its market share for undermining unity among Opec nations.
“SOMO doesn’t have a goal to take others’ clients,” Al-Yasiri said. Asked if Iraq will try to fill in for sales lost by Iran because of sanctions, he said: “Iraq rejects this principle. The principle of hunting opportunities. There should be a unifying decision for all the countries under the umbrella of Opec.”