Iran and Iraq’s Role in OPEC’s Meeting
Iraq’s crude oil production and OPEC’s meeting
Iraq and Iran are OPEC’s second and third-largest oil producers after Saudi Arabia. OPEC’s meeting is scheduled on May 25, 2017. Iraq said that it would support the production cut deal for nine more months. For more on Iraq and OPEC’s meeting, read Part 1 of the series.
The U.S. Energy Information Administration estimates that Iraq’s crude oil production fell by 5,000 bpd (barrels per day) to 4.4 MMbpd (million barrels per day) in April 2017—compared to March 2017. Production fell 0.1% month-over-month and 1.1% YoY (year-over-year). Production fell due to the production cut deal. Production is at the lowest level since July 2017.
The fall in production from Iraq could support crude oil (IYE) (XES) (USO) prices. Higher oil prices benefit Middle East oil producers like Saudi Aramco and Iraq National Oil Company. Higher prices also impact US oil and gas producers like Carrizo Oil & Gas (CRZO), ConocoPhillips (COP), and Cobalt International Energy (CIE).
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Iran’s crude oil production
The EIA estimates that Iran’s crude oil production was flat at 3.81 MMbpd in April 2017—compared to March 2017. Production rose 8.8% YoY. Iran’s crude oil production is at the highest level in seven years. Iran was able to increase its production after the US lifted sanctions on the country in January 2016. A rise in production from Iran pressured oil prices in 2016 and early 2017. Iran might be convinced to support the production cut deal on May 25, 2017, at OPEC’s meeting. Iran might support the production cut deal after achieving its production target in 2017.
For more on crude oil prices, read Crude Oil Futures Could Skyrocket after OPEC’s Meeting.
Read Will Crude Oil Prices Test 3 Digits Again? for more on crude oil price forecasts.
For related analysis, visit Market Realist’s Energy and Power page.