According to Fayyad Al-Nima, Iraq’s Deputy Oil Minister, next month could be when major OPEC and other crude producers meet in Russia in a new push to agree on an output freeze, shoring up oil prices.
He goes on to say in a phone interview, “Iraq sees oil prices rising slowly despite the failure of OPEC and other producers, including Russia, to reach an agreement on an output freeze in Doha on April 17.” Russian Energy Minister, Alexander Novak then added, “There is still no agreement on an oil meeting in May.”
“Iraq will take part in this meeting,” Al-Nima said. “Iraq’s view is to have a freeze in output for a short period to help protect the interests of both producers and consumers equally by easing the surplus from the market and improving prices.”
Talks about capping production failed after Saudi Arabia refused output restraints without commitments from all members of the Organization of Petroleum Exporting Countries, including Iran, which has currently ruled out freezing. Tensions continue to rise between the two countries as they pick opposing sides to the conflicts in Yemen and Syria.
After the Iraqi statement, oil futures experienced expansion. Delivery rose for West Texas Intermediate in May by 3.8 percent to $42.63 a barrel and in June by 4 percent to $45.80 a barrel, both highest since November 25.
“Revived hope about the big freeze has traders covering their shorts,” says Phil Flynn, senior market analyst at Price Futures Group in Chicago.
Iran’s pursuit to augment crude production and exports matches Iraq’s struggle to rebuild their energy industry, attempting to regain customers lost due to conflict and decades of sanctions. The Persian Gulf country contends for market share, reportedly captured by Saudi Arabia and other producers.
Al-Nima says Iraq’s crude production is currently between 4.7 million and 4.8 million barrels a day while exports are currently 3.9 million barrels a day, all including northern Kurdish Region, and are due to remain the same in May.
Article written by HEI contributor Marcela Abarca.