Iraq is seen struggling to implement the output reduction deal agreed by OPEC and allies, including Russia. The pact to collectively cut oil supply by 9.7 million bpd started on May 1. However, Iraq has yet to inform its regular crude buyers of any export reduction. In contrast, fellow Gulf producers Saudi Arabia, Kuwait, and the UAE have told their customers about the cut.
Iraq has ordered its biggest company, Basra Oil Co. (BOC), to slash production by 1 million bpd from May. However, BOC has yet to agree with its foreign partners, such as BP, Exxon, Eni, and Lukoil. A BOC spokesman said that the company expected a breakthrough in talks soon. Industry sources said that the companies rejected the cut, and the discussions became more complicated amid delays in forming the country’s new government.
Less than full compliance by Iraq and other producers such as Nigeria and Angola can undermine OPEC+ efforts to restore the balance in the global oil market. Trading sources said that Iraq’s export plans for May from its southern oil fields were relatively unchanged from April at around 3.3 million bpd.
Meanwhile, Nigeria and Angola’s current export schedules indicated deeper cuts in their exports but not as much as required under the latest OPEC+ agreement. Trading sources said that excluding the Akpo condensate, Nigeria planned to export 1.56 million bpd this month and 1.65 million bpd next month, above its production cap of 1.41 million bpd. Angola’s export volumes are expected to be around 1.25 million bpd in June, higher than its agreed production quota of 1.18 million bpd.
