Iraq’s crude oil production
Iraq is OPEC’s second-largest crude oil producer. According to the EIA, Iraq’s crude oil production increased by 10,000 bpd (barrels per day) to 4,440,000 bpd in February 2018—compared to the previous month. The production also increased by 20,000 bpd or 0.5% year-over-year. The production is near a six-month high.
However, production declined by 220,000 bpd or ~5% from a record high hit in December 2016 due to ongoing production cuts. Brent and US oil prices have risen ~44% since June 21, 2017, partly due to production cuts. The Energy Select Sector SPDR ETF (XLE) and the Vanguard Energy ETF (VDE) increased ~8.3% and 9%, respectively, during the same period. XLE follows the performance of the Energy Select Sector Index. VDE tracks the performance of an index of energy stocks.
Iraq’s oil output capacity and production cuts
Iraq’s crude oil production capacity is ~5,000,000 bpd. However, Iraq is producing less than the production capacity due to the ongoing supply cut deal. Iraq pledged to cut production by 210,000 bpd as part of the supply cut deal.
Iraq targets to increase its crude oil production to 5,000,000 bpd. A rise in crude oil production and exports is bearish for oil prices. However, higher compliance with the production cut deal and the unexpected supply outage could be bullish for oil prices.
Read Iran and Saudi Arabia Are Impacting Crude Oil Prices and EIA Downgraded Natural Gas Prices for 2018 for the latest updates on oil and gas.