Iraq oil sales at record, unaffected by Iran's return to market

Iraq’s plan to increase oil output this year will go ahead

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Iraq’s plan to increase oil output this year will go ahead, with exports running in January at a record level and unaffected by Iran’s return to the market, Iraqi Oil Minister Adel Abdul Mahdi told Reuters in an interview on Thursday.

Iraq, OPEC’s second-largest producer, expects output from the country’s southern region to increase by up to 400,000 barrels per day (bpd) this year, to over 4 million bpd, he said, speaking in Baghdad.

Iraq will be offering competitive prices to market its additional crude output, the minister said, adding that it had made contracts with Chinese refineries covering all of 2016.

“In fact, we in Iraq are not short of contracts,” he said. “Until now, the demand on our oil is more than our offer, even with the return of Iran.”

“Iraqi oil will remain cheap for China,” he added. “Our 2016 term contracts are fully booked.”

The average cost of extraction in southern Iraq is about $10 per barrel, he said.

Lifting oil prices now would require the Organization of the Petroleum Exporting Countries and non-OPEC nations to agree on curbing output, he said.

Iraq would support an emergency meeting of OPEC if the group can reach an agreement on curbing output in coordination with non-OPEC producers, he said.

If such an agreement is impossible, OPEC should refrain from holding any extraordinary meeting in order not to depress prices further, he said.