Iraq Could Derail Proposed OPEC Production Cut in November...

Despite Saudi Arabia's best efforts to try and coordinate an OPEC production cut in November, Iraq's oil minister, Jabar Ali al-Luaibi, is now urging oil and natural gas producers operating in Iraq to continue increasing output for the remainder of 2016 and in 2017. Luaibi recently made his remarks at a meeting of Iraqi oil industry executives in the southern oil city of Basra to review the ministry’s oilfields’ development plans. Notably, Iraq has been identified as a potential stumbling block to OPEC's provisional output cut deal due to discrepancies between its production figures and those published by the oil cartel. Shortly after OPEC agreed to reduce output in Algiers to between 32.5 - 33 million barrels per day, Iraq publicly stated that it does not trust OPEC's oil production numbers. These numbers are clearly important as they will help determine how much each individual OPEC member will have to cut production by. To try and resolve the issue, Saudi Arabia and other OPEC members have planned a number of meetings to hammer out the terms of a production cut ahead of its next official gathering on November 30th. Clearly, these recent comments from Iraq's oil minister underscores the extreme difficulty of trying to get OPEC members to reach consensus on any type of production cut. If Saudi Arabia is successful in convincing OPEC countries to cut production in November, the cartel will likely then approach other non-OPEC countries to also curtail production, a move that will further benefit the global oil markets.