OPEC member Iraq oil output may affect future oil prices

OPEC is concerned that its grip on the global supply of oil is being threatened by the rising output of Iraq’s oil fields which could affect future oil prices.

Iraqi oil exports in February were at their highest for two decades, at an average of 2.08 million barrels per day, and the country plans to lift that to 2.15 million for the rest of the year.

According to the IEA, oil output from the country’s ageing infrastructure rose by 115,000 barrels per day to 2.54 million, the biggest single contributor last month to world oil supply growth.

Moreover, Iraq is starting to worry OPEC, whose members meet on Wednesday in Vienna to review production quotas. The relatively peaceful conduct of the Iraqi election and the signing of a clutch of contracts with foreign multinational companies, including BP, Shell and ExxonMobil, raises the prospect of a surge in Iraqi oil output over the next few years.

“There is only one issue, but it’s a tsunami: Iraq,” Leo Drollas, of the Centre for Global Energy Studies, said. With enough investment, Iraq has the potential to double or even triple its oil production. “If Iraq enjoys a period of stability, it could have a major destabilising effect on OPEC and the oil price.”

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OPEC member Iraq oil output may affect future oil prices