BEIRUT

Regional

OPEC defies oil production cap with move to absorb recoveries in Iraq, Iran, Libya

A general view of the Zueitina oil terminal is seen in Zueitina, west of Benghazi April 7, 2014. (REUTERS/Esam Omran Al-Fetori)

DOHA: The Organization of Petroleum Exporting Countries will accommodate additional output from members Iraq, Iran and Libya, Secretary-General Abdulla al-Badri said Wednesday, without explaining how the group would do so under the group’s production ceiling.

Its output is currently capped at 30 million barrels a day, but the group plans to meet in Vienna on June 11 to review the figure.

OPEC, which supplies 40 percent of the world’s oil, will wait until 2015 to discuss output targets with Iraq, which operates outside the production-quota system for each of the group’s other 11 member countries, Badri told reporters in Doha, Qatar.

OPEC foresees gradual increases from Iraq and Iran, while Libya is capable of boosting output by as much as 1 million barrels within a month, he said.

“There is no problem for OPEC to absorb any production increment from Iraq and Iran in 2014. When Libya output comes back, we will accommodate it because its production is in our numbers.”

OPEC is set to boost output as its second-biggest producer, Iraq, pumps at a 35-year high and Libya’s government makes progress in talks with rebels who control fields and export terminals in the country’s oil-rich east. Sanctions on Iran over its nuclear program have constrained the Islamic Republic’s production and sales of crude.

Global demand will increase by 1.1 million barrels a day in 2014, and the group will produce up to 30 million barrels a day for the rest of the year, Badri said. “Of course, ministers can change [those predictions] when they meet,” he said.

OPEC pumped 30.3 million barrels a day in March, data compiled by Bloomberg show.

The group has yet to determine how to accommodate potential output increases from Iraq, Iran and Libya, Badri said. “We will discuss that when they come to the point to discuss their increase,” he said.

With the world’s fifth-largest oil reserves, Iraq is now rebuilding its energy industry after decades of war and economic sanctions. Helped by investors including Royal Dutch Shell PLC and Exxon Mobil Corp., it leap-frogged Iran in 2012 to rank second in OPEC, after Saudi Arabia. Iraq pumped 3.4 million a day in March, according to Bloomberg data, and targets 9 million a day.

Iran raised production to 2.9 million barrels a day last month, an increase of 65,000 barrels from February, the data show. Libya, which produced 250,000 barrels a day in March, holds Africa’s biggest crude reserves. Libya’s government reached an agreement with eastern rebels on April 6 to reopen two oil ports.

OPEC’s spare production capacity is at an adequate level this year, with producers and consumers satisfied with current oil prices, Badri said.

The price for OPEC’s basket of crudes rose $1, or 1 percent, yesterday to $103.16 a barrel, the group’s secretariat reported Wednesday.

The group’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

 
A version of this article appeared in the print edition of The Daily Star on April 10, 2014, on page 5.

Recommended

Advertisement

Comments

Your feedback is important to us!

We invite all our readers to share with us their views and comments about this article.

Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.

Alert: If you are facing problems with posting comments, please note that you must verify your email with Disqus prior to posting a comment. follow this link to make sure your account meets the requirements. (http://bit.ly/vDisqus)

comments powered by Disqus
Summary

The Organization of Petroleum Exporting Countries will accommodate additional output from members Iraq, Iran and Libya, Secretary-General Abdulla al-Badri said Wednesday, without explaining how the group would do so under the group's production ceiling.

Its output is currently capped at 30 million barrels a day, but the group plans to meet in Vienna on June 11 to review the figure.

OPEC foresees gradual increases from Iraq and Iran, while Libya is capable of boosting output by as much as 1 million barrels within a month, he said.

The group has yet to determine how to accommodate potential output increases from Iraq, Iran and Libya, Badri said.


Advertisement

FOLLOW THIS ARTICLE

Interested in knowing more about this story?

Click here