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Iraq cuts oil exports in August, pumps below OPEC+ target

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Iraq’s crude oil exports have fallen so far in August, according to shipping data and industry sources, suggesting OPEC’s second-largest producer is delivering more of its pledge to cut supply under an OPEC-led deal.

Southern Iraqi exports up to Aug. 25 have dropped to 2.63 million barrels per day (bpd), according to the average of figures from Petro-Logistics, which tracks tanker shipments, and Refinitiv Eikon data.

That is down 40,000 bpd from July’s official figure for southern exports of 2.67 million bpd.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, unwound part of a record supply cut from Aug. 1 as demand starts to recover from the coronavirus crisis.

Iraq is still cutting output after not fully meeting its pledge in earlier months.
“Iraq is on track to record its strongest monthly compliance level this year,” Petro-Logistics Chief Executive Daniel Gerber told Reuters.

He put southern exports at 2.6 million bpd so far in August, 100,000 bpd lower than his assessment of shipments in July.

“However, the country still needs to apply significant additional cuts to compensate for its oversupply in previous months.”

Iraq said on Aug. 7 it would cut production by another 400,000 bpd in both August and September to compensate for its overproduction in the earlier three months.

Baghdad was at times OPEC’s least compliant member in previous OPEC+ deals.

The south is the main outlet for Iraq’s crude. Northern Iraqi oil exports have fallen slightly in August to about 400,000 bpd, according to tanker data and an industry source,

Overall, Iraq’s exports are down by 80,000 bpd as of Aug. 25, based on an average of all the estimates seen so far.

In July, Iraq delivered about 73% of its cut, a Reuters survey found. Using the higher OPEC+ quota Iraq has in August because of the tapering of the deal, its adherence has risen to 106%, based on Reuters
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