Iraq will reduce its crude oil production by about 400,000 bbl/d in August 2020 to offset its overproduction over the past period under the OPEC+ supply reduction pact. The oil output cut is over and above the agreed cut for August 2020. In 2019, Iraq’s crude oil production averaged 4.7 mb/d.
In April 2020, the OPEC and some of its allies, the OPEC+, agreed to cut their overall crude oil production by 9.7 mb/d over the 1 May 2020 - 30 June 2020 period, in a bid to reduce the global oversupply and to firm up depressed oil prices. The production cuts would be calculated on the basis of the October 2018 production level, except for Saudi Arabia and Russia that have a baseline level of 11 mb/d. Production cuts were then relaxed to 7.7 mb/d from 1 August 2020 (delayed from 1 July 2020) to 31 December 2020 and will be relaxed again to 5.8 mb/d from 1 January 2021 to 30 April 2022. The potential extension of the agreement beyond April 2022 will be reviewed in December 2021.
According to the terms of the June 2020 agreement over the one-month production cut extension, countries that exceeded production quotas in May and June 2020, such as Iraq and Nigeria, must implement extra reductions over the July-September 2020 period; consequently, total cuts could exceed 7.7 mb/d over the August-December 2020 period and amount to 8.1-8.3 mb/d.