Iraq agrees with oil majors to cut output, but short of OPEC+ target – Reuters

Amid a slew of voluntary output cuts, Reuters came out with the news that Iraq chose to follow the OPEC+ production cuts, albeit with the lesser force.

Key quotes

Iraq is cutting its oil output by around 700,000 barrels per day (bpd), a third less than required under an OPEC+ supply pact, after it failed to persuade international oil majors operating its giant fields to agree to deeper reductions.

Iraq has agreed with oil majors operating its five giant southern oilfields to cut 300,000 bpd, Iraqi oil officials told Reuters on Wednesday. 

It will also lower production from other fields which it operates alone, bringing the total reductions to slightly below 700,000 bpd, they said.

The country’s oil output cut target under the OPEC+ supply reduction pact is 1.06 million bpd for May and June.

OPEC and its allies, a group is known as OPEC+, agreed last month to slash output by 9.7 million bpd for May and June, a record production cut.

Market implications

The news offers additional strength to oil prices. As a result, WTI June Futures on NYMEX follows a weekly ascending trend channel while taking rounds to $25.80, up 2.0% on a day, during the early Asian session on Thursday.