Iraq’s crude oil production
Iraq is OPEC’s second-largest crude oil producer. A Reuters survey estimates that Iraq’s crude oil production increased by 20,000 bpd (barrels per day) to 4,400,000 bpd in March 2018—compared to the previous month.
However, Iraq’s production declined ~6.5% from a record high hit in December 2016 due to ongoing supply cuts. Brent and WTI oil prices have risen ~53% and ~49% since June 21, 2017, partly due to ongoing supply cuts.
The Energy Select Sector SPDR ETF (XLE) and the Vanguard Energy ETF (VDE) increased ~8.6% and 9.1%, respectively, during the same period. XLE aims to follow the performance of the Energy Select Sector Index. VDE aims to track 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 production cut deal. Iraq pledged to cut production by 210,000 bpd as part of the production cut deal. Iraq had 77% compliance with the production cut deal in March 2018.
Iraq plans to increase its production capacity to 6,500,000 bpd by 2022.
Iraq crude oil exports
Iraq’s oil minister said that the country exported 3,453,000 bpd of crude oil from its southern ports in March 2018. Exports averaged 3,426,000 bpd in February 2018. A rise in exports from Iraq is bearish for crude oil prices.
A rise in crude oil production and exports is bearish for oil prices. However, higher compliance with the supply cut deal and any unexpected supply outage could be bullish for oil prices.
Next, we’ll discuss US crude oil exports.