According to Nick Cunningham, a Vermont-based writer on energy and environmental issues, Iraq could be a major reason if the OPEC fails to extend its output cut deal for another six months beyond June, oilprice.com reports.
For many years after the 2003 U.S. invasion, Iraq was exempt from OPEC’s production quotas in order to help the country rebuild. But in recent years, Iraq has succeed in ramping up its output, overtaking Iran to become OPEC’s second largest oil producer. Today, production stands at 4.4-4.5 million barrels per day (mb/d).
As OPEC’s second largest producer, Iraq is pivotal to the success of the deal signed late last November to prop up prices.
But Iraq has lagged behind other OPEC members in its efforts to reduce output. It agreed to cut production by roughly 210,000 bpd from October levels, requiring it to average an output level of 4.351 mb/d over the course of the six-month compliance period between January and June.
Iraq remains more of a question mark. That uncertainty was all the more stark given the recent comments from Iraq’s oil minister, who said that that country would ramp up production capacity to 5 mb/d this year.