By Bloomberg
Iraq is taking OPEC’s strategy to defend its share of the global oil market to a new level. The Organisation of Oil Exporting Countries is maintaining a strategy of undercutting US shale drillers in the current market price rout, and Iraq plans to boost crude exports by some 26 percent to a record 3.75 million barrels a day next month, according to shipping programmes.
The additional Iraqi oil would be equal to 800,000 barrels a day – or more than comes from OPEC member Qatar. The rest of the OPEC is expected to rubber-stamp its policy to maintain output levels at a meeting on June 5.
While shipping schedules are not an exact a promise of future production, they are indicative of what may come. As in previous months, Iraq might well not hit its June target – export capacity is currently capped at 3.1 million barrels a day, Deputy Oil Minister Fayyad al-Nimaa said on May 18.
Nonetheless, any extra Iraqi supplies inevitably mean OPEC will stray even further above its collective output target of 30 million barrels a day, Morgan Stanley says. Defying the threat from Islamic State militants, Iraq has been ramping up exports from both the Shiite south – where companies like BP Plc and Royal Dutch Shell Plc operate – and the Kurdish region in the north, which last year reached a temporary compromise with the federal government on its right to sell crude independently.
