Azernews.Az

By Nigar Abbasova

Volatility continues to dominate in the oil market, as views about the possibility of consensus in the upcoming OPEC meeting in Vienna are very controversial.

One of the main concerns of the market is now unwillingness of Iraq, OPEC’s second-biggest producer after Saudi Arabia, to join any deal of the 14-member cartel to cut output.

OPEC plans to reduce production to a range of 32.50 million to 33.0 million barrels per day (bpd), down from 33.39 million bpd in September.

Head of Iraq’s State Oil Marketing Company Falah al-Amri said the country “is not going back in any way, not by OPEC not by anybody else”.

The trigger for the price wobble also came from Iraqi Oil Minister Jabar Ali al-Luaibi, who said Baghdad should be exempt from any production cut as it’s embroiled in a war with Islamic militants.

“We are with OPEC policy and OPEC unity, but this should not be at our expense,” he said.

Iraq wants to rebuild its economy and so is seeking more oil revenue and demonstrates resistance to contributing to the cuts.

Currently, Iraq’s oil production is 4.7 million bpd, with exports standing at 3.8 million bpd.

Venezuelan Oil Minister Eulogio del Pino said the cartel is open for discussions on excluding Iraq from the planned production cuts, mentioning that the country has certain reasons for seeking exception from the preliminary deal.

The willingness of the country to pump at high levels may complicate the deal greatly, given the fact that Iraq is not the only country that wants to be treated as an exception. The Algeria meeting provided certain exceptions for such countries as Iran, Nigeria and Libya, crude output of which has been hit by wars and sanctions.

Moreover, the issue on how reductions will be shared and which countries will bear the brunt of the planned reductions may further add fuel to fire. In addition to that, some analysts are concerned that the refusal of Iraq to join the deal may trigger a domino effect in other producing countries and result in the complete failure of the deal.

OPEC is trying to convince producers to join in the group’s first output cuts in eight years in its bid to prop up crude prices, while the production curbs are expected to be finalized at OPEC's policy meeting scheduled for November 30, in Vienna.

The Cartel is in talks with its members and non-OPEC producers to sustain the interest of the market in the plan. The cartel sent invitation for participation in the technical meeting, which will be held on October 29 in Vienna, to 12 non-cartel states, including Russia, Azerbaijan, Kazakhstan, Oman, Egypt, Bahrain, Colombia, Mexico, Trinidad and Tobago, Bolivia, Norway and Canada.

---

Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

Follow us on Twitter @AzerNewsAz