OPEC Pressure to Comply with Quotas, Iraq Plans to Cut Oil Exports This Month

According to an informed official, Iraq, the second largest oil-producing country in OPEC, plans to cut oil exports this month as it faces increasing pressure from OPEC+ to comply with production quotas. The source said that Iraq's goal is to reduce production by 70,000 barrels per day in April, to an average of 3.23 million barrels per day. Last month, OPEC+ announced that they would gradually resume production levels that were halted two years ago. However, in order to offset the increase in production, they insist on countries violating quotas to strengthen production discipline. Iraq and some other OPEC+ members are facing pressure from the leading countries in the organization to further restrict supply as compensation for overproduction in the past year. According to OPEC+ data, Iraq's production last month was about 90,000 barrels per day higher than the target, while estimates from the International Energy Agency (IEA) show that Iraq's production exceeded the quota by over 300,000 barrels per day. OPEC+ measures the implementation of its targets based on oil production rather than exports. While a decrease in Iraqi exports may indicate that it has controlled production accordingly, it does not guarantee a corresponding decrease in production. Iraq has often promised to comply with quotas in the past but has failed to deliver. Data released by OPEC+ on Wednesday showed some nominal progress from Iraq in terms of compensation last month. For a long time, Iraq has been dissatisfied with the production limits imposed by OPEC+ as it needs oil revenue to rebuild its economy and trade relationships after decades of sanctions and conflicts. According to the International Monetary Fund (IMF), the country needs an oil price of $92 per barrel to cover this year's government spending. However, the current price of Brent crude futures is close to $65 per barrel. After experiencing a significant drop in oil markets, Iraq is planning to lower its expected oil price in the federal budget. Iraq's Prime Minister's financial advisor, Mudher Saleh, revealed in a phone call on Tuesday that the oil price expectation for 2025 will be lower than last year's $80 per barrel, but he did not provide more specific details.