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Economy News - Baghdad
Iraq decided to voluntarily reduce oil production by 220,000 barrels per day, starting from the beginning of next year, reducing its production by 15% since it entered the beginning of the year.
OPEC Plus decided to make a voluntary cut of two million barrels, including one million barrels by the Kingdom of Saudi Arabia.
The Ministry of Oil said, in a press statement received by Al-Eqtisad News, that “Iraq will make an additional voluntary reduction of 220,000 barrels per day, from January 1, 2024 until the end of March 2024, in coordination with some countries participating in the OPEC Plus agreement.”
She added, "Therefore, Iraq's production will be 4 million barrels per day, until the end of March 2024, and after that, and to support market stability, these additional reduction amounts will be gradually restored, according to market conditions."
She continued, "This voluntary reduction is in addition to a previous voluntary reduction of 211 thousand barrels per day, which Iraq had previously announced in April 2023, and will continue until the end of December 2024."
She concluded by saying: This “additional voluntary reduction comes to strengthen the precautionary efforts made by OPEC Plus countries with the aim of supporting the stability and balance of oil markets.”
Since its entry into the OPEC+ alliance, Iraq's production has decreased by 15%, as its production was 4.65 million barrels per day, and will become 4 million barrels per day.
OPEC Plus agreed to agree to a reduction of approximately 2 million barrels per day, according to sources quoted by Reuters.
The delegates told Reuters that the OPEC+ countries agreed to voluntary production cuts approaching two million barrels per day in early next year, noting that in the first place is Saudi Arabia, which intends to extend its current voluntary reduction.
Saudi Arabia, Russia and other members of OPEC+, which pump more than 40% of the world's oil, held a virtual meeting on Thursday to discuss 2024 production amid concerns that the market is facing a potential surplus.
Its production of about 43 million barrels per day already reflects reductions of about five million barrels per day aimed at supporting prices and achieving stability in the market.
OPEC+ sources told Reuters that the latest agreement will include voluntary cuts approaching two million barrels per day, including Saudi Arabia extending a voluntary reduction of one million barrels per day that it began in July.
One of the sources said that Russia will reduce its production by 500,000 barrels per day, and others will also contribute to the cuts.
The Algerian Energy Minister told Reuters that his country had agreed to reduce its production by 50,000 barrels per day.
Why does OPEC intend to extend the voluntary reduction?
OPEC+ is focusing on reducing production with prices falling from about $98 in late September and growing concerns about weak economic growth in 2024 and expectations of excess supply.
Oil prices now
WTI crude oil is trading at $75.18 per barrel, down 3.45%. While Brent oil is falling by 3.3% to $80.12 per barrel at the present time.
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